Interim / Quarterly Report • Aug 21, 2014
Interim / Quarterly Report
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Interim Report January–June 2014
The leading European entertainment network
On 8 May 2014, Mediengruppe RTL Deutschland launched its newest channel: Geo Television. The channel was established in co-operation with Gruner + Jahr's Geo magazine and offers excellent documentaries with a focus on nature, technology, exploration, adventure and world history.
In its first month of broadcast, Geo Television premiered more than 40 programmes such as In The Shadow Of The Moon (left) and Frozen Planet (below)
During its first month on the air, Geo Television already broadcast German TV premieres of more than 40 programmes. The special-interest digital channel has been available in HD quality from launch. It complements Mediengruppe RTL Deutschland's existing pay-TV offerings RTL Crime, RTL Living and Passion, which were launched in 2006.
Geo Television's first distribution partner is Deutsche Telekom. Since May 2014, the channel has been included in the 'Documentary' category of Deutsche Telekom's Entertain service.
At the end of July 2014, RTL Group announced that it had signed a binding agreement with the shareholders of SpotXchange to acquire a 65 per cent majority stake in the Denverbased company, which specialises in monetising video advertising.
The company empowers publishers and their sales teams to operate in an ever more complex digital ecosystem by providing innovative and industry-leading programmatic technologies that provide unprecedented transparency, insights and control over the buying behaviour for today's leading brands. More than a billion auctions for video ad impressions are transacted through the SpotXchange platform daily, with ads delivered to 335 million people in over 100 countries each month.
With online video at the heart of its strategy, RTL Group aims to become a leading player in all segments of online video and online video advertising. As part of this strategy, the acquisition of SpotXchange was a logical step towards moving into the area of digital monetisation.
Condensed consolidated interim financial information
Luxembourg, 21 August 2014 − RTL Group, the leading European entertainment network, announces its interim results to 30 June 2014.
| Half year to June 2014 €m |
Half year to June 2013 1 €m |
Per cent change |
|
|---|---|---|---|
| Revenue | 2,687 | 2,755 | (2.5) |
| Underlying revenue2 | 2,660 | 2,731 | (2.6) |
| Reported EBITA3 | 519 | 552 | (6.0) |
| Reported EBITA margin (%) | 19.3 | 20.0 | |
| Reported EBITA | 519 | 552 | |
| Impairment of goodwill and amortisation and impairment of fair value adjustments on acquisitions of subsidiaries |
(100) | (5) | |
| Impairment of investments accounted for using the equity method | – | 72 | |
| Re-measurement of earn-out arrangements | 1 | – | |
| Gain from sale of subsidiaries, other investments and re-measurement to fair value of pre-existing interest in acquiree |
2 | 1 | |
| EBIT | 422 | 620 | |
| Net financial expense | (15) | 5 | |
| Income tax expense | (160) | (158) | |
| Profit for the period | 247 | 467 | |
| Attributable to: | |||
| – Non-controlling interests | 45 | 49 | |
| – RTL Group shareholders | 202 | 418 | (51.7) |
| Reported EPS (in €) | 1.32 | 2.72 |
1 All financial figures for H1/2013 are restated for IFRS 11 2 Adjusted for scope changes and at constant exchange rates
3 EBITA represents earnings before interest and taxes excluding impairment of goodwill and of disposal group, and amortisation and impairment of fair value adjustments on acquisitions of subsidiaries, impairment of investments accounted for using the equity method, re-measurement of earn-out arrangements, and gain or loss from sale of subsidiaries, other investments and re-measurement to fair value of pre-existing interest in acquiree
Reported EBITA was €519 million compared to €552 million in H1/2013. The decrease is mainly due to lower profit contributions from Fremantle-Media and RTL Group's broadcasting operations in France, which offset growth from Germany and the Netherlands. Despite the Football World Cup, RTL Group's families of TV channels in Germany, France and the Netherlands reported significantly higher EBITA in Q2/2014
Reported EBITA margin at the high level of 19.3 per cent (H1/2013: 20.0 per cent)
4 Excluding e-commerce, home shopping and distribution revenue for digital TV
Joint statement from Anke Schäferkordt and Guillaume de Posch, Co-Chief Executive Officers of RTL Group:
"Our results for the first half of 2014 show a mixed picture: once more, we've achieved a solid operating performance, with record results from our biggest profit centre in Germany and significantly higher EBITA from RTL Nederland. We've also made consistent progress in implementing our 'broadcast – content – digital' strategy.
However, some factors weigh on our half-year results. The economic environment in France remains difficult for our local TV and radio operations, while FremantleMedia faces continued pressure on volumes and prices. In addition, the new advertising tax in Hungary will strongly reduce the profitability of RTL Hungary. These effects also mean that we have to adapt our outlook for the full year 2014. We now assume a slight decrease in full-year revenue. For the full-year EBITA, we expect a more significant decrease compared to the revenue decline.
Furthermore, today's impairment charge demonstrates the significant damage caused by the new advertising tax in Hungary. As we already said in July: the precipitous introduction of the confiscatory advertising tax is an alarming signal for all international investors in Hungary. Our audience and financial success has always included two key elements: a local, decentralised management structure and being politically independent. RTL is and will remain deeply rooted in Hungary.
As a business, we remain focused on three strategic goals. First and foremost, we will continue producing, acquiring and airing the best TV content. Finding the new hits – big and small – is a joint priority for both our broadcasters and for FremantleMedia. More than ever, our TV channels have stepped up their own development initiatives in their local markets. Strengthening the creative pipeline – and ultimately improving the profit margin – of FremantleMedia requires targeted investments in new talent, genres and geographical areas, as recently demonstrated with the acquisition of US-based 495 Productions. This will take some time, but we are clearly committed to further scale up our global content arm.
Second: online video is at the heart of our digital strategy, as it will be a key driver of future growth. For the full year 2014, we expect to more than double our online video views to around 40 billion.
Third, monetising our rapidly growing digital reach requires resources and new skills such as aggregation and production of short-form online video and, very importantly, skills in advertising technology. With its leading, state-of-the-art platform for programmatic selling of online video advertising, SpotXchange is a cornerstone investment for RTL Group's digital growth strategy."
■ At the end of March 2014, FremantleMedia acquired a 75 per cent majority stake in the US-based reality production company, 495 Productions, and has the opportunity to acquire the remaining shareholding in the future. This allows FremantleMedia to expand its share of the valuable US cable market and complements and diversifies FremantleMedia's existing portfolio of content and clients in the biggest TV market worldwide
Advertising markets continued to show signs of recovery in the first half of 2014. With the exception of France, which was estimated to be down 2.4 per cent, all European net TV advertising markets in RTL Group's territories were up year-on-year.
A summary of RTL Group's key TV markets is shown below including net advertising market growth rates and the share of the main target audience groups.
| H1 / 2014 net TV advertising market growth rate (per cent) |
H1 / 2014 audience share in main target group (per cent) |
H1 / 2013 audience share in main target group (per cent) |
|
|---|---|---|---|
| Germany | +2.0 to +3.05 | 29.2 6 | 31.26 |
| France | (2.4) 7 |
21.9 8 | 22.48 |
| Netherlands | +8.25 | 31.9 9 | 32.49 |
| Belgium | +2.75 | 35.2 10 | 36.910 |
| Spain | +5.711 | 31.3 12 | 30.512 |
| Hungary | +3.35 | 36.3 13 | 37.213 |
| Croatia | +5.25 | 25.4 14 | 28.914 |
Group revenue decreased by 2.5 per cent to €2,687 million (H1/2013: €2,755 million). Taking the scope changes into account, and at constant exchange rates, underlying revenue decreased 2.6 per cent to €2,660 million (H1/2013: €2,731 million).
Reported EBITA decreased by 6.0 per cent to €519 million (H1/2013: €552 million). The reported EBITA margin was 19.3 per cent (H1/2013: 20.0 per cent). The Group's first-half EBITDA15 was €614 million (H1/2013: €633 million), resulting in an EBITDA margin of 22.9 per cent (H1/2013: 23.0 per cent).
Group operating expenses decreased by 1.3 per cent to €2,209 million, compared to €2,237 million in the first half of 2013.
The impairment and amortisation loss totalling €12 million solely relates to the amortisation and impairment of fair value adjustments on acquisitions of subsidiaries. €9 million of this amount relates to an impairment of intangible assets recognised in a purchase price allocation following the acquisition of the Hungarian cable channels.
An impairment loss on goodwill totaling €88 million has been recorded in the 2014 interim statements. This charge is primarily against the goodwill carried by the Group in RTL Hungary, which has now been fully impaired, and is a direct result of the new advertising tax which came into force on the 15 August 2014. The charge related to RTL Hungary amounts to €77 million. A further smaller impairment charge, amounting to €9 million, has been recognised against the goodwill of Radical Media, a US branded entertainment business wholly owned by FremantleMedia. Further analysis of the impairments and related sensitivity can be found in note 7 in this interim report.
The share of results of investments accounted for using the equity method amounted to €24 million. In 2013, the reported result of €91 million included the reversal of an impairment totalling €72 million, against the associate company Atresmedia. Due to the impact of IFRS 11, joint ventures previously consolidated proportionately, are now consolidated at equity. Accordingly, the 2013 comparatives have been re-stated for this effect.
The net financial expense of €15 million (H1/2013: income of €5 million) primarily reflects a net interest expense of €14 million (H1/2013: expense of €6 million).
The income tax expense increased slightly to €160 million (H1/2013: €158 million).
The profit for the period attributable to RTL Group shareholders was €202 million (H1/2013: €418 million).
for using the equity method, re-measurement of earn-out arrangements, and gain or loss from sale of subsidiaries, other investments and re-measurement to fair value of pre-existing interest in acquiree
The consolidated net debt position at 30 June 2014 amounted to €475 million (31 December 2013: net cash of €6 million; 30 June 2013: net debt of €237 million).
On 7 January 2014, Groupe M6 acquired 51 per cent of Best of TV SAS. Best of TV has developed a leading position in France in distributing infomercial and teleshopping products through major French retail chains. This acquisition enables Groupe M6 to strengthen the position of its subsidiary, Home Shopping Service, in the home shopping and infomercial business.
End of March 2014, FremantleMedia acquired a 75 per cent majority stake in the US-based reality production company, 495 Productions, and has the opportunity to acquire the remaining shareholding in the future. This allows FremantleMedia to expand its share of the valuable US cable market and complements and diversifies FremantleMedia's existing portfolio of content and clients in the biggest TV market worldwide.
On 31 March 2014, Groupe M6 sold its fully owned subsidiary Mistergooddeal to the Darty Group.
Half-year to June 2014 (H1/2014)
| Mediengruppe RTL Deutschland 927 927 – Groupe M6 (3.5) 670 694 (6.5) FremantleMedia 623 666 RTL Nederland 224 210 +6.7 RTL Belgium (2.9) 102 105 RTL Radio (France) (7.0) 80 86 Other segments (4.3) 154 161 (93) (94) Eliminations n.a. Total revenue (2.5) 2,687 2,755 H1 / 2014 H1 / 2013 Per cent EBITA €m €m change Mediengruppe RTL Deutschland 313 306 +2.3 Groupe M6 (11.0) 113 127 FremantleMedia (38.3) 29 47 RTL Nederland 44 38 +15.8 RTL Belgium 26 25 +4.0 RTL Radio (France) (46.2) 7 13 (13) (4) Other segments n.a. Reported EBITA (6.0) 519 552 H1 / 2014 H1 / 2013 Percentage point EBITA margins Per cent Per cent change Mediengruppe RTL Deutschland 33.8 33.0 +0.8 Groupe M6 (1.4) 16.9 18.3 FremantleMedia (2.4) 4.7 7.1 RTL Nederland 19.6 18.1 +1.5 RTL Belgium 25.5 23.8 +1.7 RTL Radio (France) (6.3) 8.8 15.1 (8.4) (2.5) (5.9) Other Segments RTL Group (0.7) 19.3 20.0 |
Revenue | H1 / 2014 € m |
H1 / 2013 €m |
Per cent change |
Per cent of total H1 / 2014 |
|---|---|---|---|---|---|
| 34.5 | |||||
| 24.9 | |||||
| 23.2 | |||||
| 8.3 | |||||
| 3.8 | |||||
| 3.0 | |||||
| 5.7 | |||||
| (3.4) | |||||
| 100.0 | |||||
| Per cent of total H1 / 2014 |
|||||
| 60.3 | |||||
| 21.8 | |||||
| 5.6 | |||||
| 8.5 | |||||
| 5.0 | |||||
| 1.3 | |||||
| (2.5) | |||||
| 100.0 | |||||
Second quarter of 2014 (Q2/2014)
| Revenue | Q2 / 2014 €m |
Q2 / 2013 €m |
Per cent change |
Per cent of total Q2 / 2014 |
|---|---|---|---|---|
| Mediengruppe RTL Deutschland | 478 | 474 | +0.8 | 34.8 |
| Groupe M6 | 324 | 347 | (6.6) | 23.6 |
| FremantleMedia | 310 | 365 | (15.1) | 22.6 |
| RTL Nederland | 126 | 120 | +5.0 | 9.2 |
| RTL Belgium | 51 | 53 | (3.8) | 3.7 |
| RTL Radio (France) | 43 | 47 | (8.5) | 3.1 |
| Other segments | 86 | 80 | +7.5 | 6.3 |
| Eliminations | (44) | (48) | (8.3) | (3.3) |
| Total revenue | 1,374 | 1,438 | (4.5) | 100.0 |
| EBITA | Q2 / 2014 €m |
Q2 / 2013 €m |
Per cent change |
Per cent of total Q2 / 2014 |
| Mediengruppe RTL Deutschland | 179 | 172 | +4.1 | 55.1 |
| Groupe M6 | 70 | 67 | +4.5 | 21.5 |
| FremantleMedia | 20 | 37 | (45.9) | 6.2 |
| RTL Nederland | 38 | 34 | +11.8 | 11.7 |
| RTL Belgium | 13 | 13 | – | 4.0 |
| RTL Radio (France) | 7 | 11 | (36.4) | 2.2 |
| Other segments | (2) | 11 | n.a. | (0.7) |
| Reported EBITA | 325 | 345 | (5.8) | 100.0 |
| EBITA margins | Q2 / 2014 Per cent |
Q2 / 2013 Per cent |
Percentage point change |
|
| Mediengruppe RTL Deutschland | 37.4 | 36.3 | +1.1 | |
| Groupe M6 | 21.6 | 19.3 | +2.3 | |
| FremantleMedia | 6.5 | 10.1 | (3.6) | |
| RTL Nederland | 30.2 | 28.3 | +1.9 | |
| RTL Belgium | 25.5 | 24.5 | +1.0 | |
| RTL Radio (France) | 16.3 | 23.4 | (7.1) | |
| Other Segments | (2.3) | 13.8 | (16.1) | |
| RTL Group | 23.7 | 24.0 | (0.3) |
In the reporting period, the German net TV advertising market was estimated to be up between 2.0 and 3.0 per cent year-on-year. Mediengruppe RTL Deutschland's revenue was stable at €927 million (H1/2013: €927 million). EBITA increased slightly by 2.3 per cent to €313 million (H1/2013: €306 million) – the unit's best ever first-half operating profit, mainly driven by a growing digital distribution business, higher profit contributions from investments accounted for using the equity method and slightly lower programming costs.
| H1 / 2014 € m |
H1 / 2013 €m |
Per cent change |
|
|---|---|---|---|
| Revenue | 927 | 927 | – |
| EBITA | 313 | 306 | +2.3 |
The combined average audience share of Mediengruppe RTL Deutschland in the target group of viewers aged 14 to 59 was down to 29.2 per cent in the first six months of 2014 (H1/2013: 31.2 per cent), mainly due to the fact that major sporting events like the Olympic Games and the Football World Cup were broadcast on the public channels. This also led to lower audience shares for the two biggest channels: RTL Television and Vox. However, the German RTL family of channels remained ahead of its main commercial competitor ProSiebenSat1 by 4.0 percentage points.
With an audience share of 13.1 per cent in the target group of viewers aged 14 to 59 during the first six months of 2014 (H1/2013: 14.5 per cent), RTL Television remained the viewers' number one choice – 3.7 percentage points ahead of the second highest-rated channel, Sat1 and ZDF. In terms of total audience, RTL Television registered an audience share of 10.6 per cent and came in third, behind ZDF (13.8 per cent) and ARD (13.0 per cent).
RTL Television scored high ratings across all genres. At the beginning of the year, the eighth season of Ich bin ein Star – Holt mich hier raus! (I'm A Celebrity... Get Me Out Of Here!) attracted an average audience share of 39.5 per cent among viewers aged 14 to 59 – 2.5 percentage points more than in the previous season. An average of 8.2 million viewers tuned in to the boxing match Wladimir Klitschko vs Alex Leapai in April, which attracted 36.9 per cent of the viewers in the target group. On average 18.8 per cent of viewers aged 14 to 59 tuned in to RTL Television's talent show Deutschland sucht den Superstar (Idols). The seventh season of Let's Dance was an audience favourite in April and May with an average audience share of 18.7 per cent in the target group. Complementing RTL Television's information programmes, the investigative Team Wallraff caused a lot of stir in Germany and was watched by an average 16.9 per cent of the viewers aged 14 to 59.
In the first half of 2014, Vox's audience share in the target group of 14 to 59 year-old viewers was 6.6 per cent (H1/2013: 7.6 per cent). One of the most popular shows in the first six months of 2014 was Sing meinen Song – Das Tauschkonzert with Xavier Naidoo which attracted an average 9.1 per cent of the viewers aged 14 to 59. Also popular were the documentaries about the participating musicians airing directly after the show. On Easter, the ten-part series The Bible scored an average audience share of 7.4 per cent in the target group. One of the audience favourites continues to be Shopping Queen with Guido Maria Kretschmar, which scored an average audience share of 8.7 per cent in the target demographic.
During the first six months of 2014, RTL Nitro almost doubled its audience share year-on-year and was watched by an average 1.5 per cent of the viewers aged 14 to 59 (H1/2013: 0.8 per cent). RTL Nitro did not suffer from the broadcast of the Football World Cup in June 2014 and is currently ranking 11th among all German channels in the target group – ahead of main competitor DMax and close to entering the Top Ten.
During the first half of 2014, RTL II attracted 5.4 per cent of the viewers aged 14 to 59 (H1/2013: 5.7 per cent). Again, the access prime time formats Berlin – Tag & Nacht and Köln 50667 were among the most popular shows on RTL II. Games Of Thrones scored an average audience share of 6.6 per cent among viewers aged 14 to 59. In prime time, Die Geissens – Eine schrecklich glamouröse Familie! and Die Reimanns – Ein außergewöhnliches Leben were popular.
The newly launched Disney Channel has been on air in Germany since January 2014, taking some audience shares from the existing players. However, Super RTL managed to remain the most popular children's channel in Germany with an audience share of 20.3 per cent in its target group of 3 to 13-year-olds during the 06:00 to 20:15 time slot (H1/2013: 23.7 per cent), well ahead of its two competitors, Kika (19.2 per cent), Nick (10.4 per cent) and the Disney Channel (7.6 per cent). In day time, Dragons – Die Wächter von Berk was watched by an average 27.6 per cent of the target group. The pre-school format Peter Hase achieved an average audience share of 30.4 per cent.
N-TV attracted a stable average audience share of 1.0 per cent among viewers aged 14 to 59 during the reporting period. In prime time, N-TV attracted viewers with the ten-part documentary series Mega Brands which was watched by an average 1.6 per cent of the target group. N-TV's news reports are especially popular in the mornings, scoring an average audience share of 1.4 per cent.
RTL Interactive is responsible for diversification activities within Mediengruppe RTL Deutschland, including digital content and services.
During the first half of 2014, the catch-up TV services RTL Now, Vox Now, RTL Nitro Now, RTL II Now, Super RTL Now and N-TV Now together with Clipfish registered 330 million views of long-form content – complete episodes of series or shows (H1/2013: 414 million). While big shows still draw large numbers of video views, overall lower online video views reflect decreasing TV audience shares.
Combining these on-demand platforms with the clip portal Clipfish.de, Clipfish Music HbbTV and Mediengruppe RTL Deutschland's channel and thematic websites, the number of video views of professionally produced content was 606 million (H1/2013: 676 million).
Including all mobile portals and applications of Mediengruppe RTL Deutschland's portfolio, mobile page impressions were up 5 per cent to 2.95 billion, while mobile video views were up 33 per cent to 138 million. As a part of these figures, apps from the news channel N-TV – together with Mobil.N-TV.de – generated up to 394 million page impressions per month (H1/2013: 248 million), and a total of 1.96 billion page impressions in the first half of 2014 (H1/2013: 1.3 billion).
Since the beginning this year, RTL Interactive has been using the TV screen to promote second screen offers during broadcast, by replacing the channel logo with the "RTL Inside" logo. Additionally, Mediengruppe RTL Deutschland is actively enhancing its non-linear offers: the complete "Now" family of catch-up services is now available via Kabel Deutschland's "Select Video", allowing dynamic screening of advertising within the closed network of Kabel Deutschland. In the first half of 2014, Mediengruppe RTL Deutschland launched two new channels for Smart TVs: music channel Dooloop and the fitness channel Fitness & Yoga.
The talent show Deutschland sucht den Superstar (Idols) registered 76 million video views (2013: 63 million). With 27.4 million video views, Ich bin ein Star – Holt mich hier raus! scored a new record (2013: 21.9 million). Additionally, RTL Interactive registered 2.6 million interactions by users in social networks around the show (2013: 1.45 million). In total, Mediengruppe RTL Deutschland's shows and channels attracted 24 million fans on Facebook and 1.7 million followers on Twitter.
With some 3.2 million fans on its Facebook page, which is produced by RTL II's online editorial team, Berlin – Tag & Nacht remains Germany's most popular TV format on the social network. More than 50,000 fans interact on the page on a daily basis. The Berlin – Tag & Nacht app was downloaded 1.7 million times, while the Köln 50667 app was downloaded 1.1 million times.
In the first half of 2014, Groupe M6's reported revenue was down by 3.5 per cent to €670 million (H1/2013: €694 million), mainly due to lower revenues from TV advertising and the sale of Mistergooddeal.
The French net TV advertising market was estimated to be down by 2.4 per cent in the reporting period. Accordingly, the Group's EBITA decreased by 11.0 per cent to €113 million (H1/2013: €127 million).
| H1 / 2014 €m |
H1 / 2013 €m |
Per cent change |
|
|---|---|---|---|
| Revenue | 670 | 694 | (3.5) |
| EBITA | 113 | 127 | (11.0) |
During the first six months of 2014, two major sport events (The Winter Olympic Games and the Football World Cup) had a strong impact on the average audience shares in France. In addition, the six new DTT channels launched in December 2012 continued to grow, reaching an average total audience share of 3.7 per cent, further driving fragmentation.
Groupe M6 reached a combined total audience share of 14.2 per cent during the period (H1/2013: 15.1 per cent). On the main commercial target group of housewives aged under 50, the combined audience share was 21.9 per cent (H1/2013: 22.4 per cent).
M6 remained the second most popular channel in France among housewives under 50, reporting an audience share of 15.5 per cent (H1/2013: 15.8 per cent). In terms of total audience share (9.9 per cent), M6 was the third most popular channel. The channel's flagship programmes such as Scènes de Ménages, L'Amour est dans le pré, Les Reines du Shopping, Le 19.45, Cauchemar en Cuisine continued to be popular.
The ninth season of L'Amour est dans le pré scored an average of 5.4 million viewers and an average audience share of 34.6 per cent among housewives under 50, making it the leading programme in terms of both target group and total audience. In access prime time, the news programme Le 19.45 was the leading news show among housewives under 50, with an average audience share of 22.7 per cent in the target group. With as many as 4 million viewers tuning in, Scènes de Ménages remained the most watched programme in the target group in its time slot. La Meilleure Boulangerie de France and Les Reines du Shopping increased the viewer base in access prime time, gaining 220,000 viewers yearon-year. The third season of the short comedy En Famille, broadcast in summer reached its best performance since its launch with an average audience share of 23.6 per cent in the key commercial target group.
Groupe M6's main digital channel W9 was the second most watched digital terrestrial television (DTT) channel among housewives under 50 with an average audience share of 3.7 per cent (H1/2013: 4.2 per cent). With the reality format Les Ch'tis vs. Les Marseillais: qui seront les meilleurs, W9 was the
| O WO óter Branch de la téva | |||
|---|---|---|---|
| Grondins of Boutique Music Music Blusic Rivers | |||
| TIFE Serie club WD BE Ventadis |
leading channel among under 25 year-olds in France. Underlining its positioning as a 'mini-generalist' channel, W9 scored high ratings in various genres, including movies, magazines, factual entertainment formats, reality TV shows and live broadcasts of Uefa Europa League football matches.
6ter established itself as the leader among the new DTT channels launched in December 2012, registering an audience share of 1.3 per cent in the target group of housewives under 50 during the first six months of 2014 (H1/2013: 0.8 per cent).
In the pay-TV environment, Groupe M6's channels confirmed their leading positions in their key target groups. Among the 92 thematic channels in the Médiamétrie Médiamat Thématik classification – which measures TV audiences among French households equipped with cable, satellite or IPTV – Paris Première was the most watched channel, while Téva was again the top choice of housewives aged under 50 (audience share: 0.9 per cent).
During the first half of 2014, M6 Web reached an average audience of 12.9 million unique users per month across its network. During the reporting period, Groupe M6's total video views grew significantly to 489 million (H1/2013: 313 million), mainly driven by the comedy network Golden Moustache.
In November 2013, M6 Web launched the new digital platform 6play for the channels M6, W9 and 6ter, offering simple access to Groupe M6' more than 800 hours of content each month as well as live streaming of the channels M6, W9 and 6ter.
6play – available on both computer and television via virtually all cable, IPTV and satellite packages in France – registered a monthly average of almost 70 million online video views in the first half of 2014 (thereof 10 million live views). In March 2014, M6 launched four thematic digitals channels on 6play: Sixième Style, Crazy Kitchen, Comic and Stories.
By the end of June 2014, Groupe M6 apps for iPhone, iPad and Windows Phones had registered almost 17.3 million downloads (30 June 2013: 10 million).
The M6 Mobile by Orange service had 2.8 million subscribers by the end of June 2014 in a very competitive market, stable year-on-year.
The football club Girondins de Bordeaux – which is owned by Groupe M6 – ended the French League 1 championship in seventh place. Its performance in this competition during the first half of the year and its policy of controlling costs enabled the club to post a positive half-year operating profit.
Revenue of FremantleMedia – RTL Group's production and brand exploitation arm – decreased by 6.5 per cent to €623 million (H1/2013: €666 million), mainly because of unfavourable exchange rate effects and lower production volume and distribution revenue (tape sales). FremantleMedia reported a strongly lower EBITA of €29 million (H1/2013: €47 million), mainly due to lower production and distribution volume, oneoff costs at the company's headquarter and negative foreign exchange rate effects.
| H1 / 2014 €m |
H1 / 2013 €m |
Per cent change |
|
|---|---|---|---|
| Revenue | 623 | 666 | (6.5) |
| EBITA | 29 | 47 | (38.3) |
In March 2014, FremantleMedia acquired a majority stake in 495 Productions, a leading US-based reality production company renowned for its cutting edge, female-skewed programming. The acquisition extends and complements FremantleMedia's programming.
FremantleMedia's Scandinavian production company Miso Film expanded its footprint by opening a new office in Sweden to produce both feature films and TV series for the Scandinavian and international market.
In the first half of 2014, six entertainment formats have travelled to a combined 15 new territories. The X Factor has travelled to three new territories – Georgia, Slovakia and Vietnam – taking its total to 45. Family Feud has travelled to three new territories – Croatia, Hungary and Myanmar – taking its total to 61 and The Noise has travelled to three new territories – Argentina, Kazakhstan and Singapore – taking its total to four. Other formats that travelled in the first half of 2014 are Idols, Project Runway and Take Me Out. Sitcom Birds of a Feather also travelled to a new territory, Lithuania.
In April, Guinness World Records announced Got Talent as 'The World's Most Successful Reality TV Format' ever, having been commissioned in an impressive 58 territories worldwide. Since then the format has continued to travel and is now in 62 markets.
In the US, airing its 13th series in 2014, American Idol is the leading series on Fox so far this year, winning an average total audience of 11.9 million viewers. The audience share among adults aged 18 to 49 was 9.9 per cent. In January 2014, Fox announced that the US version of The X Factor will not be renewed for a fourth season. Launched on 27 May 2014, the ninth series of America's Got Talent premiered to an audience of 14.2 million viewers, slightly up on the Season 8 launch of 13.9 million. Across its first five episodes, America's Got Talent has won an average audience share of 11.1 per cent among 18 to 49 year-olds. A 10th season commission was announced in July 2014. The Price Is Right continues to rank as the leading daytime entertainment show in the USA, winning an average audience of 5.4 million viewers and a 12.2 per cent
share in the first-half of 2014 and Family Feud hit a new record high becoming the joint leading game show in first-run syndication for the 2013/14 season to date.
In the UK, Britain's Got Talent, airing in its eighth season from April to June, was once again the most popular entertainment series in the UK in 2014. The show was watched by an average 10.3 million viewers, translating into an average audience share of 52.6 per cent among viewers aged 16 to 34. Returning to UK screens after a 16-year hiatus, Birds Of A Feather premiered to 9.5 million viewers on 2 January 2014 ranking as ITV's highest rated sitcom launch in over ten years. Winning a total audience share of 28.6 per cent, Birds Of A Feather is the highest rated sitcom in the UK for 2014.
Successfully aired on RTL Television since 1992 Gute Zeiten, Schlechte Zeiten (Good Times, Bad Times) continued to be Germany's most popular serial drama in the first half of 2014, winning an average audience of 3.1 million viewers. In the key demographic of viewers aged 14 to 59, the show scored an average audience share of 16.4 per cent. Airing its 11th season from January to May, Deutschland sucht den Superstar (Idols) won an average audience of 4.1 million viewers. The average audience share among viewers aged 14 to 59 was 18.8 per cent. UFA Fiction's historical theatrical release Der Medicus (The Physician) has attracted 3.9 million movie-goers in Germany since its launch in December 2013. 1.9 million more have seen it in Spain, Austria and Switzerland.
In Australia, Neighbours is the leading drama series across all digital free-to-air channels for 2014, winning an average total audience share of 6.8 per cent. Launching its second season on 20 May 2014, the six episodes of Wentworth exceeded pay-TV channel Soho's average audience share by more than 1,000 per cent. The show was re-commissioned for a third season even before the second series aired. Adaptations are in production in Germany and the Netherlands.
Airing its seventh series in 2014 The X Factor once again ranked as the most popular entertainment show in Denmark, and has been for the past seven years. The show scored an average total audience share of 60.3 per cent.
Aired from March to May 2014, the first series of Wentworth in The Netherlands won an audience share of 15.7 per cent among shoppers aged 20 to 49. Wentworth is the highest rated drama on the Dutch broadcaster SBS 6 for 2014. Before the season finale was aired, SBS 6 announced the commission of a second season.
In France the ninth series of L'Amour est dans le pré (The Farmer Wants A Wife) launched on 26 May 2014, winning an average audience share of 33.3 per cent so far for the key target demographic of housewives under 50. It is the best performing show on M6 for the year to date and has ranked as the highest rated entertainment show on M6 for the past seven years.
FremantleMedia International (FMI) enhanced its cooperation with creative talent this year with the renewal of two deals with pioneering TV personality and chef Jamie Oliver, and with comedy producer Ash Atalla's Roughcut Television. The business has also established cooperations with talented production companies like CNN Original, Playtone, established by Tom Hanks and Gary Goetzman, as well as Oprah Winfrey's OWN.
FremantleMedia Kids & Family Entertainment properties are continuing to build international presence. Strange Hill High is now available in 128 territories adding a further 43 markets - including Australia, New Zealand, Ireland and Turkey – in the first half of 2014. Tree Fu Tom is now in 123 markets, adding ten new territories. The most recent kids' title to launch – Ella the Elephant – is already in 93 territories adding 11 new territories in the first half of 2014.
In February, FremantleMedia and Vice Media, the global youth media company, announced a venture to create a multi-channel food platform for the millennial audience. Munchies launched in April at Mip TV where five titles were unveiled including, Munchies: Chef's Night Out, Being Frank, Fresh Off the Boat, Girl Eats Food, and F*ck, That's Delicious. The German site launched in June, a UK site is scheduled to launch in the third quarter of 2014.
In April, UFA and Divimove, Europe's leading multichannel network in which FremantleMedia owns a stake, launched joint initiative "Shootrs", combining the storytelling capabilities of Germany's leading production company and the Youtube expertise of Divimove. Shootrs will create new original content, launch new formats and scout for and develop new talent.
In June, FremantleMedia North America (FMNA) launched their original digital production studio, Tiny Riot, to produce original digital content for its own channels like The Pet Collective, and for FMNA's TV properties including Family Feud and Celebrity Name Game, and for partners like Vice Media and Style Haul. Online talk show The Crew premiered in January and has attracted 4.5 million views, quickly becoming Style Haul's most successful original series. This is the first content to come out of the production and development deal with FremantleMedia North America and the leading fashion multi-channel network Style Haul.
FremantleMedia's Youtube presence continued to reach new heights throughout the first half of 2014:
Mobile and social gaming company Ludia reached a peak of 3.3 million daily active users across mobile and social platforms in the first half of the year. During this period, Ludia's games were downloaded 29 million times across mobile devices and Facebook. Dragons: Rise of Berk achieved 12 million downloads alone in its first three months.
The Dutch TV advertising market was estimated to be up 8.2 per cent in the first half of 2014. Total revenue at RTL Nederland increased by 6.7 per cent to €224 million (H1/2013: €210 million), mainly due to higher TV advertising revenue and higher digital distribution revenue. Accordingly, EBITA of RTL Nederland was up 15.8 per cent to €44 million (H1/2013: €38 million).
| H1 / 2014 €m |
H1 / 2013 €m |
Per cent change |
|
|---|---|---|---|
| Revenue | 224 | 210 | +6.7 |
| EBITA | 44 | 38 | +15.8 |
In the first six months of 2014, the combined primetime audience share of the RTL Nederland family of channels in the target group of viewers aged 20 to 49 was 31.9 per cent16 slightly down from 32.4 per cent in the first half of 2013 – mainly due to the broadcast of the Football World Cup on the public broadcasters. However, RTL Nederland continues to be market leader – ahead of the public broadcasters (28.3 per cent) who strongly gained audience shares, and the SBS Group with 19.7 per cent. Additionally, new channels like Fox and HBO are emerging in the Netherlands, further fragmenting the market.
Flagship channel RTL 4 recorded an average audience share of 19.2 per cent in its target group of shoppers aged 20 to 49 (H1/2013: 20.0 per cent), well ahead of its competitors. On Fridays, RTL 4 retained its strong position with talent shows such as The Voice Kids (average audience share in the key target group: 32.3 per cent), Everybody Dance Now (24.7 per cent) and Alles Mag Op Vrijdag (27.5 per cent). On Saturdays, the new season of All You Need Is Love attracted an average 28.9 per cent of shoppers aged 20 to 49. Sundays, RTL 4 scored with drama series such as Divorce (33.0 per cent) and Moordvrouw (27.0 per cent). The channel's access prime time – with RTL Boulevard, Goede Tijden, Slechte Tijden and RTL Nieuws – delivered strong ratings once again.
RTL 5 scored an audience share of 5.9 per cent in its target group of viewers aged 20 to 34 (H1/2013: 6.1 per cent). Dutch productions continued to be the most popular shows on RTL 5, including reality shows Levenslang Met Dwang (22.6 per cent) and Adam Zoekt Eva (18.7 per cent). Other successful broadcasts include Project P., From Russia With Love, the sequel of Roy Donders Meer Dan Stylist Van Het Zuiden and Expeditie Poolcirkel.
The men's channel RTL 7 achieved an average audience share of 6.8 per cent among men aged 20 to 49 (H1/2013: 7.6 per cent). Especially popular were sports broadcasts on RTL 7. In January, the Darts World Cup 2014 was watched by 32.5 per cent of the male viewers aged 20 to 49, while 28.7 per cent tuned in to the finale of the Uefa Europa League between Sevilla and Benfica Lisbon.
16 Including digital pay-TV channels RTL Lounge and RTL Crime which have been included in the Dutch SKO audience measurement since March 2014
Catering to women, RTL 8 reported an audience share of 3.5 per cent among female viewers aged 20 to 49 in the first half of 2014 (H1/2013: 3.3 per cent). Especially crime series like CSI franchise and Bones have improved the performance on Saturday and Sunday nights.
The reach of digital pay channel RTL Lounge was 3.5 million viewers aged 6 and over. RTL Crime reached 2.5 million viewers aged 6 and above. The children's channel RTL Telekids 24/7' reach amounted to 2.3 million viewers aged 6 and above. Among children aged 3 to 8, the reach was 360,000 viewers, making it the 6th most popular digital channel in this target group.
Since 31 May 2013, STIR measurements stopped the reporting of online figures. The new audience rankings are delivered by Dutch Digital Media Measurement (DDMM) based on a different panel. DDMM started reporting in September 2013 – thus a comparison of Unique Visitors to the first six months of 2013 is not possible.
RTL Nederland's network of websites – including the general portal RTL.nl, the on-demand platform RTLXL.nl, the weather portal Buienradar.nl, and a variety of websites dedicated to popular formats – attracted an average 113.9 million visits per month.
In the first half of 2014, RTL Nederland generated a total of 346 million video views – an increase of 10 per cent year-on-year. This growth was mainly fueled by a new agreement with Youtube, which led to 91 million views on Youtube (H1/2014: 26 million). The most popular formats were the soaps Goede Tijden, Slechte Tijden and The Bold And The Beautiful, the talent show The Voice Kids, RTL Nieuws and Adam Zoekt Eva.
RTL Ventures is RTL Nederland's central division for new business activities in new consumer markets. In June 2014, RTL Ventures and Vodafone decided to end the commercial relationship with regards to Sizz.
The new subscription-based video on demand services NLziet and Videoland both launched in beta in June 2014. The beta versions will be continuously optimized and will go out of beta later this year.
NLziet offers Holland's most popular TV programmes in a unique collaboration between the commercial broadcasters RTL Nederland and SBS with the Dutch public broadcasters. Viewers can watch up to 365 days after broadcast on TV and some programmes even up to seven days before broadcast on TV for €7.95 per month.
Videoland offers films and series independently of TV programming, whenever and wherever customers want. With the 'all you can watch' service Videoland Unlimited viewers have access to the largest selection of films and series in the Netherlands for €10 per month. Customers can not only watch on any device, but also watch Videoland Unlimited as an extra within the monthly packages of TV providers since November 2013.
The net TV advertising market in French-speaking Belgium was estimated to be up 2.7 per cent. However, total revenue of the profit centre decreased by 2.9 per cent to €102 million (H1/2013: €105 million) mainly due to lower TV revenues. EBITA of RTL Belgium increased to €26 million (H1/2013: €25 million), reflecting lower costs in TV activities.
| H1 / 2014 €m |
H1 / 2013 €m |
Per cent change |
|
|---|---|---|---|
| Revenue | 102 | 105 | (2.9) |
| EBITA | 26 | 25 | +4.0 |
The combined prime time audience share of RTL Belgium's family of TV channels in the target group (shoppers aged 18 to 54) decreased to 35.2 per cent (H1/2013: 36.9 per cent) – mainly due to the fact that the Football World Cup was broadcast by the competition. However, RTL Belgium's lead over the public channels remained high at 14.0 percentage points. The RTL family aired 53 of the 100 most watched programmes in the reporting period. Not taking into account the Football World Cup, RTL Belgium aired 72 of the top 100 programmes.
The market-leading channel in French-speaking Belgium, RTL-TVI, achieved an average prime-time audience share of 25.4 per cent in the target group (H1/2013: 26.6 per cent), 10.0 percentage points ahead of the second highest-rated channel, the French commercial broadcaster TF1.
Plug RTL reported a prime-time audience share of 4.9 per cent among young viewers aged 15 to 34 (H1/2013: 5.0 per cent), while Club RTL ended the first half of 2014 with a prime-time audience share of 7.1 per cent in its main target group of male viewers aged 18 to 54 (H1/2013: 7.7 per cent).
According to the most recent CIM audience survey, covering January to March 2014, the Belgian radio family had a combined audience share of 26.5 per cent (January to March 2013: 29.3 per cent). Bel RTL was the number one general-interest radio station in the French Community (audience share: 13.5 per cent) and Radio Contact was the leading music radio station (audience share: 13.0 per cent).
In the first half of 2014, the number of video views across RTL Belgium's websites increased strongly to 58 million (H1/2013: 44 million), driven by news content and major TV shows. Since February 2013, several agreements have been made with all Frenchspeaking news websites on which RTL Belgium's video content enriches articles, representing an average of 840,000 video views per month. Some 25 per cent of the total visits are generated by mobile devices.
In a net radio advertising market estimated to be down 2.4 per cent, the RTL radio family in France reported revenue of €80 million (H1/2013: €86 million). Accordingly, EBITA of the French radio profit centre was down to €7 million (H1/2013: €13 million).
| H1 / 2014 €m |
H1 / 2013 €m |
Per cent change |
|
|---|---|---|---|
| Revenue | 80 | 86 | (7.0) |
| EBITA | 7 | 13 | (46.2) |
The latest audience survey by Médiamétrie for the period April to June 2014 showed a slight decrease in cumulated radio audience which was down by 442,000 listeners year on year at 80.6 per cent (April to June 2013: 81.8 per cent). This decline was mainly focused on 25 to 49 year-old listeners who represent 92 per cent of the total radio audience decrease. This decrease affected all general-interest stations and musical stations with high attractiveness in this demographic segment such as RTL 2.
The combined audience share of RTL Group's French radio family was down year-on-year to 17.8 per cent (April to June 2013: 18.5 per cent). The audience share of the flagship station RTL was 11.1 per cent (April to June 2013: 12.0 per cent). In this tough environment for general-interest stations, RTL Radio remained the leading French radio station, gathering 5.7 million listeners a day and, in terms of audience share, remaining 2.9 percentage points ahead of the next commercial competitor.
Fun Radio gained 221,000 listeners in cumulated audience year-on-year, reaching 3.7 million listeners a day. Its audience share increased by 0.5 percentage points to 4.0 per cent (April to June 2013: 3.5 per cent).
Strongly affected by the decrease of 25 to 49 yearold listeners, RTL 2 lost 293,000 listeners in cumulated audience year-on-year, reaching 2.3 million listeners a day (H1/2013: 2.6 million). Its audience share decreased to 2.7 per cent (April to June 2013: 3.0 per cent).
According to the latest available Médiamétrie results, covering the first four months of the year 2014, RTL.fr has confirmed its position as the leading radio website in France, achieving an average of 3.5 million unique visitors per month – this represents an increase of 38 compared to the same period in 2013.
The RTL.fr website was completely renewed and improved mid-June 2014.
This segment comprises the fully consolidated businesses RTL Hungary, RTL Hrvatska (Croatia), and RTL Group's Luxembourgish activities, along with UFA Sports, the Corporate Centre, the German radio business and the Spanish investment accounted for using the equity method, Atresmedia.
RTL Hungary: After the Hungarian net TV advertising market had decreased for five years, the market grew by an estimated 3.3 per cent in the first half of 2014. Total consolidated revenue of the profit centre was up moderately to €46 million (H1/2013: €45 million).
Due to the impact of the new advertising tax, RTL Group has been forced to impair its total goodwill on RTL Hungary. In addition, RTL Group also had to impair a number of assets, under IFRS rules. These specific impairments are recorded against the EBITA of RTL Hungary and amounted to €2 million. Despite these impairments, RTL Hungary reported a flat EBITA of €5 million. For more information please see note 7 to the consolidated interim financial information.
The combined prime-time audience share of the RTL family of channels in the key demographic of 18 to 49-year-old viewers was 36.3 per cent (H1/2013: 37.2 per cent). The prime-time audience share of RTL Klub decreased to 19.6 per cent (H1/2013: 23.2 per cent). However, the profit centre's flagship channel remained the clear market leader, 4.8 percentage points ahead of its main commercial competitor TV2 (H1/2013: 6.1 percentage points). The daily series Éjjel-nappal Budapest (Budapest Day & Night) registered an average audience share of 24.5 per cent among viewers aged 18 to 49, while the daily soap Barátok közt (Between Friends) attracted an average audience share of 23.9 per cent audience in the same target group.
RTL Hungary's cable channels achieved a combined prime-time audience share of 16.7 per cent among young viewers (H1/2013: 14.0 per cent). The general entertainment channel Cool was the country's leading cable channel, scoring a prime-time audience share of 6.0 per cent (H1/2013: 5.5 per cent), followed by Film Plusz with 5.5 per cent (H1/2013: 5.3 per cent). RTL II, which was launched at the end of 2012, attracted 3.3 per cent of the viewers aged 18 to 49 in prime time (H1/2013: 1.5 per cent).
The catch-up TV service RTL Most is the leading local brand for professionally produced online video content. It registered 35 million video views in the reporting period (H1/2013: 28 million video views).
RTL Hrvatska in Croatia: In a TV advertising market that was up by an estimated 5.2 per cent in the reporting period, revenues were stable at €17 million (H1/2013: €17 million), with EBITA also stable at a break-even position.
RTL Hrvatska's family of channels achieved a combined prime-time audience share of 25.4 per cent (H1/2013: 28.9 per cent) among viewers aged 18 to 49 – this decrease was mainly due to on-going fragmentation of the market and the impact of the Football World Cup. Flagship channel RTL Televizija achieved a prime time audience share of 18.2 per cent (H1/2013: 21.9 per cent), while RTL 2's audience share was 6.0 per cent (H1/2013: 7.0 per cent). The newly launched children's channel RTL Kockica achieved an average audience share of 19.3 per cent among children aged 4 to 14 in the time between 7:00 and 20:00.
The main news show RTL Danas remains a key part of RTL Televizija's programming, with an average audience share of 27.5 per cent among viewers aged 18 to 49. The local drama series Tajne (Secrets), produced by FremantleMedia, scored an average audience share of 22.1 per cent in the target audience. Tri, dva, jedan kuhaj! (Three, Two, One – Cook), a new culinary format developed in-house, was well accepted by the audience – broadcast in prime time Mondays to Thursdays, it achieved an average audience share of 22.5 per cent. In a very competitive slot with the news shows on other national channels, Pet na pet, a local version of Family Feud produced by FremantleMedia, achieved an average audience share of 22.7 per cent in the target group.
In total, RTL Hrvatska's websites registered 5.1 million online video views during the reporting period (H1/2013: 6.3 million), including more than 2 million video views from its catch-up TV platform, RTL Sada. The service provides the opportunity for timeshifted viewing of all locally produced shows of RTL Televizija, RTL 2 and RTL Kockica as well as some web-only content.
In January 2014, the RTL Sada second screen app was released. It offers to Apple's mobile devices and tablets users the possibility to interact with their programme live through quizzes, voting and comment features, as well as to watch the RTL Sada video catalogue.
Atresmedia in Spain: The Spanish TV advertising market showed signs of recovery in the first half of 2014, increasing by an estimated 5.7 per cent. Despite the decision of the Spanish Supreme Court to close down a total of nine Spanish DTT channels, of which three were operated by Atresmedia, the Atresmedia family of channels grew its combined audience share to 31.3 per cent in the key commercial target group of viewers aged 16 to 54 years (H1/2013: 30.5 per cent). The main channel, Antena 3, increased its audience share in the commercial target group to 13.9 per cent (H1/2013: 12.9 per cent).
On a 100 per cent basis, consolidated revenue of Atresmedia was up 6.6 per cent to €451 million (H1/2013: €423 million), while operating profit (EBIT-DA) increased strongly to €60 million (H1/2013: €40 million) and net profit rose by 29.9 per cent to €38 million (H1/2013: €29 million). The profit share of RTL Group was €7 million (H1/2013: €6 million).
RTL Radio Deutschland's revenue was down 4.0 per cent to €24 million in the first six months of 2014 (H1/2013: €25 million). EBITA decreased to €4 million (H1/2013: €6 million), due to lower contribution by Antenne Niedersachsen, Funkhaus Halle and BCS Sachsen.
UFA Sports' revenue decreased strongly to €7 million (H1/2013: €23 million), mainly due to the positive impact of the sale of the Handball World Cup rights in January 2013 and boxing in February 2013. EBITA was down from a break-even position to minus €4 million.
RTL Group derives the majority of its revenue from the various advertising markets in which the Group operates. This is an area highly exposed to the general economic conditions and consumer confidence. Advertising markets continued to show signs of recovery in the first half of 2014. With the exception of France, which was estimated to be down 2.4 per cent, all European net TV advertising markets in RTL Group's territories were up year-on-year.
The state of the advertising markets is just one of the key operational drivers of the Group. Other drivers include audience share, advertising market share and the overall level of programme cost. Should any of these key drivers change substantially compared to the Group's position as at 30 June 2014 then the Group would be impacted − either positively or negatively − in the second half of the year.
The Group's content arm is subject to pricing pressure from its clients and is facing reduced production and distribution volumes for some of its programme genres. Should the business not develop creatively, through the development of new formats, or should it miss a new programming trend, then its results would be affected negatively. Conversely, should the creative renewal proceed rapidly, the business will be positively impacted by this development.
The implications of the new Hungarian advertising tax have yet to be fully understood by the Group. This may lead to a deterioration of the operational results of this business unit and further impairment charges.
The Group continues to monitor its cost base closely but cannot rule out increased programme investments, should the competitive landscape require it, which would have a negative short-term impact on earnings. The launch of new channels by the Group's operating units will also involve programme and other investments which will, in the short-term, have a negative impact on earnings.
The 2013 Annual Report sets out the most significant risk factors and litigations relating to RTL Group's operations at the time of that report. RTL Group does not consider that these principal risks and uncertainties have changed in a material way.
Additional risks and uncertainties not currently known to the Group, or that the Group does not currently deem material, may also have an adverse effect on its business.
The major related party transactions can be found in note 14 to the condensed consolidated interim financial information.
See note 16 to the consolidated interim financial information.
Given the fact that the economic environment in France remains difficult for RTL Group's local TV and radio operations, that FremantleMedia faces continued pressure on volumes and prices and that the new advertising tax in Hungary will strongly reduce the profitability of RTL Hungary, RTL Group adapts its outlook for the full year 2014. The company now assumes a slight decrease in full-year revenue. For the full-year EBITA, RTL Group expects a more significant decrease compared to the revenue decline.
| For the periods to 30 June | ||||
|---|---|---|---|---|
| Three months Six months ending 30 June ending 30 June |
||||
| 2014 €m |
2013 restated €m |
2014 €m |
2013 restated €m |
|
| Revenue | 1,374 | 1,438 | 2,687 | 2,755 |
| Other operating income | 12 | 9 | 18 | 15 |
| Consumption of current programme rights | (419) | (437) | (852) | (859) |
| Depreciation, amortisation and impairment | (41) | (45) | (96) | (87) |
| Other operating expenses | (618) | (634) | (1,261) | (1,291) |
| Amortisation and impairment of fair value adjustments on acquisitions of subsidiaries | (98) | (3) | (100) | (5) |
| Gain/(loss) from sale of subsidiaries, other investments and re-measurement to fair value of pre-existing interest in acquiree |
3 | – | 2 | 1 |
| Profit from operating activities | 213 | 328 | 398 | 529 |
| Share of results of investments accounted for using the equity method | 18 | 73 | 24 | 91 |
| Earnings before interest and taxes ("EBIT") | 231 | 401 | 422 | 620 |
| Interest income | 2 | 3 | 4 | 5 |
| Interest expense | (7) | (6) | (18) | (11) |
| Financial results other than interest | 1 | 10 | (1) | 11 |
| Profit before taxes | 227 | 408 | 407 | 625 |
| Income tax expense | (90) | (97) | (160) | (158) |
| Profit for the period | 137 | 311 | 247 | 467 |
| Attributable to: | ||||
| RTL Group shareholders | 110 | 285 | 202 | 418 |
| Non-controlling interests | 27 | 26 | 45 | 49 |
| Profit for the period | 137 | 311 | 247 | 467 |
| EBITA* | 325 | 345 | 519 | 552 |
| Impairment of goodwill of subsidiaries | (88) | – | (88) | – |
| Reversal of impairment of investments accounted for using the equity method | – | 59 | – | 72 |
| Amortisation and impairment of fair value adjustments on acquisitions of subsidiaries | (10) | (3) | (12) | (5) |
| Re-measurement of earn-out arrangements | 1 | – | 1 | – |
| Gain/(loss) from sale of subsidiaries, other investments and re-measurement to fair value of pre-existing interest in acquiree |
3 | – | 2 | 1 |
| Earnings before interest and taxes ("EBIT") | 231 | 401 | 422 | 620 |
| Earnings per share (in €) | ||||
| – Basic | 0.72 | 1.86 | 1.32 | 2.72 |
| – Diluted | 0.72 | 1.86 | 1.32 | 2.72 |
* EBITA represents earnings before interest and taxes excluding impairment of goodwill and of disposal group, and amortisation and impairment of fair value adjustments on acquisitions of subsidiaries, impairment of investments accounted for using the equity method, re-measurement of earn-out arrangements and gain or loss from sale of subsidiaries, other investments and re-measurement to fair value of pre-existing interest in acquiree
| For the periods to 30 June | |||||
|---|---|---|---|---|---|
| Three months ending 30 June |
Six months ending 30 June |
||||
| Note | 2014 €m |
2013 €m |
2014 €m |
2013 €m |
|
| Profit for the period | 137 | 311 | 247 | 467 | |
| Other comprehensive income: | |||||
| Items that will not be reclassified to profit or loss: | |||||
| Re-measurement of post-employment benefit obligations | 10. | (7) | (6) | (26) | 3 |
| Income tax | 1 | 1 | 5 | (1) | |
| (6) | (5) | (21) | 2 | ||
| Items that may be reclassified subsequently to profit or loss: | |||||
| Foreign currency translation differences | 9 | 1 | (3) | (10) | |
| Effective portion of changes in fair value of cash flow hedges | 5 | (16) | 6 | 6 | |
| Income tax | (1) | 5 | (1) | (1) | |
| 4 | (11) | 5 | 5 | ||
| Change in fair value of cash flow hedges transferred to profit or loss | 1 | (3) | – | (7) | |
| Income tax | – | 1 | – | 2 | |
| 1 | (2) | – | (5) | ||
| Fair value gains /(losses) on available-for-sale financial assets | (4) | 12 | (5) | 11 | |
| Income tax | – | (2) | – | (2) | |
| (4) | 10 | (5) | 9 | ||
| 10 | (2) | (3) | (1) | ||
| Other comprehensive income/(loss) for the period, net of income tax | 4 | (7) | (24) | 1 | |
| Total comprehensive income for the period | 141 | 304 | 223 | 468 | |
| Attributable to: | |||||
| RTL Group shareholders | 115 | 278 | 179 | 419 | |
| Non-controlling interests | 26 | 26 | 44 | 49 | |
| Total comprehensive income for the period | 141 | 304 | 223 | 468 | |
| 30 June 2014 |
31 December 2013 restated |
As at 1 January 2013 restated |
||
|---|---|---|---|---|
| Notes | €m | €m | €m | |
| Non-current assets | ||||
| Programme and other rights | 110 | 109 | 119 | |
| Goodwill | 2,650 | 2,707 | 2,678 | |
| Other intangible assets | 183 | 198 | 202 | |
| Property, plant and equipment | 329 | 331 | 346 | |
| Investments accounted for using the equity method | 8. | 356 | 359 | 273 |
| Loans and other financial assets | 100 | 142 | 240 | |
| Deferred tax assets | 375 | 389 | 375 | |
| 4,103 | 4,235 | 4,233 | ||
| Current assets | ||||
| Programme rights | 1,057 | 955 | 902 | |
| Other inventories | 19 | 15 | 30 | |
| Income tax receivable | 36 | 42 | 86 | |
| Accounts receivable and other financial assets | 14. | 1,791 | 1,721 | 1,995 |
| Cash and cash equivalents | 334 | 542 | 621 | |
| 3,237 | 3,275 | 3,634 | ||
| Assets classified as held for sale | 9. | – | 27 | 3 |
| Current liabilities | ||||
| Loans and bank overdrafts | 309 | 36 | 16 | |
| Income tax payable | 40 | 90 | 77 | |
| Accounts payable | 14. | 2,624 | 2,513 | 2,132 |
| Provisions | 188 | 194 | 220 | |
| 3,161 | 2,833 | 2,445 | ||
| Liabilities directly associated with non-current assets classified as held for sale | 9. | – | 24 | – |
| Net current assets | 76 | 445 | 1,192 | |
| Non-current liabilities | ||||
| Loans | 14. | 525 | 529 | 12 |
| Accounts payable | 383 | 331 | 319 | |
| Provisions | 173 | 169 | 174 | |
| Deferred tax liabilities | 55 | 58 | 62 | |
| 1,136 | 1,087 | 567 | ||
| Net assets | 3,043 | 3,593 | 4,858 | |
| Equity attributable to RTL Group shareholders | 2,640 | 3,159 | 4,366 | |
| Equity attributable to non-controlling interests | 403 | 434 | 492 | |
| Equity | 3,043 | 3,593 | 4,858 |
For the periods to 30 June
| Notes | Share capital €m |
Treasury shares €m |
Currency translation reserve €m |
Hedging reserve €m |
Revaluation reserve €m |
Reserves and retained earnings €m |
Equity attributable to RTL Group shareholders €m |
Equity attributable to non controlling interests €m |
Total equity €m |
|
|---|---|---|---|---|---|---|---|---|---|---|
| Balance at 1 January 2013 | 192 | (44) | (142) | 21 | 96 | 4,243 | 4,366 | 492 | 4,858 | |
| Total comprehensive income: | ||||||||||
| Profit for the period | – | – | – | – | – | 418 | 418 | 49 | 467 | |
| Foreign currency translation differences | – | – | (9) | – | – | – | (9) | (1) | (10) | |
| Effective portion of changes in fair value of cash flow hedges, net of tax |
– | – | – | 5 | – | – | 5 | – | 5 | |
| Change in fair value of cash flow hedges transferred to profit and loss, net of tax |
– | – | – | (5) | – | – | (5) | – | (5) | |
| Fair value gains /(losses) on available-for-sale financial assets, net of tax |
– | – | – | – | 8 | – | 8 | 1 | 9 | |
| Re-measurement of post-employment benefit obligations, net of tax |
– | – | – | – | – | 2 | 2 | – | 2 | |
| – | – | (9) | – | 8 | 420 | 419 | 49 | 468 | ||
| Capital transactions with owners: | ||||||||||
| Dividends | – | – | – | – | – | (1,613) | (1,613) | (137) | (1,750) | |
| Equity-settled transactions net of tax | – | – | – | – | – | 1 | 1 | 1 | 2 | |
| Transactions on non-controlling interests without a change in control |
– | – | – | – | – | (5) | (5) | 1 | (4) | |
| Transactions on non-controlling interests with a change in control |
– | – | – | – | – | – | – | 4 | 4 | |
| – | – | – | – | – | (1,617) | (1,617) | (131) | (1,748) | ||
| Balance at 30 June 2013 | 192 | (44) | (151) | 21 | 104 | 3,046 | 3,168 | 410 | 3,578 | |
| Balance at 1 January 2014 | 192 | (44) | (168) | (8) | 85 | 3,102 | 3,159 | 434 | 3,593 | |
| Total comprehensive income: | ||||||||||
| Profit for the period | – | – | – | – | – | 202 | 202 | 45 | 247 | |
| Foreign currency translation differences | – | – | (3) | – | – | – | (3) | – | (3) | |
| Effective portion of changes in fair value of cash flow hedges, net of tax |
– | – | – | 5 | – | – | 5 | – | 5 | |
| Fair value gains /(losses) on available-for-sale financial assets, net of tax |
– | – | – | – | (5) | – | (5) | – | (5) | |
| Re-measurement of post-employment benefit obligations, net of tax |
10. | – | – | – | – | – | (20) | (20) | (1) | (21) |
| – | – | (3) | 5 | (5) | 182 | 179 | 44 | 223 | ||
| Capital transactions with owners: | ||||||||||
| Dividends | – | – | – | – | – | (691) | (691) | (72) | (763) | |
| Equity-settled transactions net of tax | – | – | – | – | – | 1 | 1 | 2 | 3 | |
| Acquisition of treasury shares | 13. | – | (3) | – | – | – | – | (3) | – | (3) |
| Transactions on non-controlling interests without a change in control |
– | – | – | – | – | – | – | 2 | 2 | |
| Transactions on non-controlling interests with a change in control |
6. 1. | – | – | – | – | – | (15) | (15) | (4) | (19) |
| Derivatives on equity instruments | – | – | – | – | – | (2) | (2) | (3) | (5) | |
| Transactions on treasury shares of associates | – | – | – | – | – | 12 | 12 | – | 12 | |
| – | (3) | – | – | – | (695) | (698) | (75) | (773) | ||
| Balance at 30 June 2014 | 192 | (47) | (171) | (3) | 80 | 2,589 | 2,640 | 403 | 3,043 |
| For the periods to 30 June | ||||
|---|---|---|---|---|
| Three months | ||||
| ending 30 June 2014 |
2013 | ending 30 June 2014 2013 |
||
| €m | restated €m |
€m | restated €m |
|
| Cash flows from operating activities | ||||
| Profit before taxes | 227 | 408 | 407 | 625 |
| Adjustments for: | ||||
| – Depreciation and amortisation | 40 | 44 | 97 | 86 |
| – Value adjustments, impairment and provisions | 125 | 25 | 136 | 40 |
| – Equity-settled share-based payments expenses | 2 | 1 | 3 | 2 |
| – Gain on disposal of assets | (2) | (1) | (3) | (6) |
| – Financial results including net interest expense and share of results of investments accounted for using the equity method |
(5) | (64) | 18 | (50) |
| Use of provisions | (34) | (24) | (50) | (41) |
| Working capital changes | (65) | (26) | (65) | 69 |
| Income taxes paid | (92) | (105) | (142) | (130) |
| Net cash from operating activities | 196 | 258 | 401 | 595 |
| Cash flows from investing activities | ||||
| Acquisitions of: | ||||
| – Programme and other rights | (23) | (27) | (51) | (31) |
| – Subsidiaries, net of cash acquired | (4) | (25) | (23) | (64) |
| – Other intangible and tangible assets | (19) | (16) | (37) | (33) |
| – Other investments and financial assets | (17) | (13) | (22) | (15) |
| Current deposit with shareholder | – | – | (75) | – |
| (63) | (81) | (208) | (143) | |
| Proceeds from the sale of intangible and tangible assets | 1 | 3 | 10 | 15 |
| Disposal of other subsidiaries, net of cash disposed of | – | (1) | – | (1) |
| Proceeds from the sale of investments accounted for using the equity method, other investments and financial assets |
– | 4 | 4 | 6 |
| Current deposit with shareholder | 75 | – | 75 | 426 |
| Interest received | 1 | 9 | 3 | 21 |
| 77 | 15 | 92 | 467 | |
| Net cash from/(used in) investing activities | 14 | (66) | (116) | 324 |
| Cash flows from financing activities Interest paid |
(4) | (1) | (25) | (1) |
| Transactions with non-controlling interests | 1 | 1 | 1 | 1 |
| Acquisition of treasury shares | (3) | – | (3) | – |
| Term loan facility due to shareholder | 272 | (300) | 272 | 500 |
| Proceeds from loans | 4 | – | 8 | 9 |
| Repayment of loans | (1) | – | (4) | (3) |
| Dividends paid | (750) | (134) | (750) | (1,746) |
| Net cash used in financing activities | (481) | (434) | (501) | (1,240) |
| Net decrease in cash and cash equivalents | (271) | (242) | (216) | (321) |
| Cash and cash equivalents and bank overdrafts at beginning of period | 594 | 534 | 540 | 616 |
| Effect of exchange rate fluctuation on cash held | 4 | 1 | 3 | (2) |
| Cash and cash equivalents and bank overdrafts at end of period | 327 | 293 | 327 | 293 |
RTL Group SA (the "Company"), the parent company, is domiciled and incorporated in Luxembourg. This condensed consolidated interim financial information is presented in accordance with the requirements of IAS 34 Interim Financial Reporting as adopted by the European Union and should be read in conjunction with the consolidated annual financial statements for the year ended 31 December 2013.
RTL Group ("the Group") forecasts and projections, taking account of reasonably possible changes in trading performance, show that the Group will be able to operate within the level of its current facilities. The Management have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. Therefore RTL Group continues to adopt the going concern basis in preparing its condensed consolidated interim financial information.
This condensed consolidated interim financial information was approved by the Board of Directors on 20 August 2014.
The accounting policies have been consistently applied by the Group entities and are consistent with those used in previous year, except as follows:
The following standards, amendments to standards and new interpretations are mandatory for the first time for the financial period beginning 1 January 2014:
1 The application of these standards, interpretations and amendments had no significant impact for the Group.
The following new standards and amendments have been published but are not effective for the Group's accounting period beginning on 1 January 2014. The Group has yet to assess the impact of the new standards and amendments:
2 These standards and interpretations have not been yet endorsed by the European Union.
The preparation of condensed consolidated interim financial information requires Management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expenses. Actual results may differ from these estimates.
In preparing these condensed consolidated interim financial information, the significant judgements made by the Management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those applied to the consolidated financial statements as at and for the year ended 31 December 2013.
An amount of €5 million related to the new RTL Group long-term incentive plan ("LTIP") 2014- 2016 has been estimated and accrued for the six months ended 30 June 2014 (€8 million for the same period in 2013); the final terms of the plan will be submitted to the Nomination and Compensation Committee on 20 August 2014.
Even though it has less than 50 per cent of the voting rights, management consider that the Group has de facto control of Groupe M6. The Group is the majority shareholder of Groupe M6 while the balance of other holdings remains highly dispersed and the other shareholders have not organised their interest in such a way that they intend to vote differently from the Group.
The Group's activities expose it to a variety of financial risks: market risk (including currency risk, fair value interest rate risk, cash flow interest rate risk and price risk), credit risk and liquidity risk. Compared to 31 December 2013, the Group has drawn down an additional amount of €272 million from its majority shareholder (see note 14.).
The condensed interim financial statements do not include all financial risk management information and disclosures required in the annual financial statements; they should be read in conjunction with the Group's annual financial statements as at 31 December 2013. There have been no changes in the risk management policies and organisation since year end.
The fair value of each class of financial assets and liabilities approximate their carrying amount. The fair value of the 10-year-term facility − calculated as the present value of the payments associated with the debt and based on the applicable yield curve and RTL Group credit spread − amounts to €523 million. This is a Level 2 fair value measurement.
The following table presents the Group's financial assets and liabilities measured at fair value.
The different levels have been defined as follows:
| Total | Level 1 | Level 2 | Level 3 |
|---|---|---|---|
| €m | €m | €m | €m |
| Assets | ||||
|---|---|---|---|---|
| Available-for-sale investments | 61 | 10 | – | 51 |
| Derivatives used for hedging | 20 | – | 20 | – |
| At 30 June 2014 | 81 | 10 | 20 | 51 |
| Liabilities | ||||
| Derivatives used for hedging | 27 | – | 27 | – |
| At 30 June 2014 | 27 | – | 27 | – |
There were no transfers between Levels 1, 2 and 3 during the period.
| Derivatives used for hedging At 30 June 2013 |
16 16 |
– – |
16 16 |
– – |
|---|---|---|---|---|
| Liabilities | ||||
| At 30 June 2013 | 315 | 20 | 150 | 145 |
| Derivatives used for hedging | 38 | – | 38 | – |
| Available-for-sale investments | 136 | 20 | 52 | 64 |
| Financial assets at fair value through profit or loss |
141 | – | 60 | 81 |
| Assets | ||||
| Total €m |
Level 1 €m |
Level 2 €m |
Level 3 €m |
There were no transfers between Levels 1, 2 and 3 during the period.
The fair value of financial instruments traded in active markets are based on quoted market prices at the balance sheet date. A market is regarded as active if quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service, or regulatory agency, and those prices represent actual and regularly occurring market transactions on an arm's length basis. These instruments are included in Level 1. The quoted market price used for financial assets by the Group is the current bid price.
The fair value of financial instruments that are not traded in an active market are determined by using valuation techniques. These valuation techniques maximise the use of observable market data where it is available and rely as little as possible on entityspecific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in Level 2.
If one or more of the significant inputs is not based on observable market data, the instrument is included in Level 3.
Specific valuation techniques used to value financial instruments include:
There was no change in Level 3 instruments for the period ended 30 June 2014.
| Mediengruppe RTL Deutschland |
Groupe M6 |
|||||
|---|---|---|---|---|---|---|
| Three months ending 30 June | 2013 restated €m |
2014 €m |
2013 restated €m |
|||
| Revenue from external customers | 478 | 473 | 323 | 346 | ||
| Inter-segment revenue Total revenue |
– 478 |
1 474 |
1 324 |
1 347 |
||
| Profit/(loss) from operating activities | 168 | 166 | 70 | 65 | ||
| Share of results of investments accounted for using the equity method | 10 | 6 | – | – | ||
| EBIT | 178 | 172 | 70 | 65 | ||
| EBITA | 179 | 172 | 70 | 67 | ||
| Impairment of goodwill of subsidiaries | – | – | – | – | ||
| Reversal of impairment of investments accounted for using the equity method | – | – | – | – | ||
| Amortisation and impairment of fair value adjustments on acquisitions of subsidiaries | – | – | (1) | (2) | ||
| Re-measurement of earn-out arrangements | (1) | – | – | – | ||
| Gain/(loss) from sale of subsidiaries, other investments and re-measurement to fair value of pre-existing interest in acquiree |
– | – | 1 | – | ||
| EBIT | 178 | 172 | 70 | 65 | ||
| Interest income | ||||||
| Interest expense | ||||||
| Financial results other than interest | ||||||
| Income tax expense | ||||||
| Profit for the period |
| Six months ending 30 June | 2014 €m |
2013 restated €m |
2014 €m |
2013 restated €m |
|
|---|---|---|---|---|---|
| Revenue from external customers | 926 | 926 | 665 | 689 | |
| Inter-segment revenue | 1 | 1 | 5 | 5 | |
| Total revenue | 927 | 927 | 670 | 694 | |
| Profit/(loss) from operating activities | 298 | 295 | 112 | 123 | |
| Share of results of investments accounted for using the equity method | 14 | 11 | – | – | |
| EBIT | 312 | 306 | 112 | 123 | |
| EBITA | 313 | 306 | 113 | 127 | |
| Impairment of goodwill of subsidiaries | – | – | – | – | |
| Reversal of impairment of investments accounted for using the equity method | – | – | – | – | |
| Amortisation and impairment of fair value adjustments on acquisitions of subsidiaries | – | – | (2) | (4) | |
| Re-measurement of earn-out arrangements | (1) | – | – | – | |
| Gain/(loss) from sale of subsidiaries, other investments and re-measurement to fair value of pre-existing interest in acquiree |
– | – | 1 | – | |
| EBIT | 312 | 306 | 112 | 123 | |
| Interest income | |||||
| Interest expense | |||||
| Financial results other than interest | |||||
| Income tax expense | |||||
| Profit for the period |
| FremantleMedia | RTL RTL RTL Other Radio (France) Nederland Belgium Segments |
Eliminations | Total Group |
||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 |
| restated | restated | restated | restated | restated | restated | restated | |||||||
| €m | €m | €m | €m | €m | €m | €m | €m | €m | €m | €m | €m | €m | €m |
| 277 | 330 | 126 | 120 | 50 | 53 | 43 | 46 | 77 | 70 | – | – | 1,374 | 1,438 |
| 33 | 35 | – | – | 1 | – | – | 1 | 9 | 10 | (44) | (48) | – | – |
| 310 | 365 | 126 | 120 | 51 | 53 | 43 | 47 | 86 | 80 | (44) | (48) | 1,374 | 1,438 |
| 11 | 36 | 38 | 34 | 14 | 13 | 7 | 11 | (95) | 3 | – | – | 213 | 328 |
| 1 | 1 | – | – | – | – | – | – | 7 | 66 | – | – | 18 | 73 |
| 12 | 37 | 38 | 34 | 14 | 13 | 7 | 11 | (88) | 69 | – | – | 231 | 401 |
| 20 | 37 | 38 | 34 | 13 | 13 | 7 | 11 | (2) | 11 | – | – | 325 | 345 |
| (9) | – | – | – | – | – | – | – | (79) | – | – | – | (88) | – |
| – | – | – | – | – | – | – | – | – | 59 | – | – | – | 59 |
| – | – | – | – | – | – | – | – | (9) | (1) | – | – | (10) | (3) |
| 1 | – | – | – | – | – | – | – | 1 | – | – | – | 1 | – |
| – | – | – | – | 1 | – | – | – | 1 | – | – | – | 3 | – |
| 12 | 37 | 38 | 34 | 14 | 13 | 7 | 11 | (88) | 69 | – | – | 231 | 401 |
| 2 | 3 | ||||||||||||
| (7) | (6) | ||||||||||||
| 1 | 10 | ||||||||||||
| (90) | (97) | ||||||||||||
| 137 | 311 | ||||||||||||
| 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 |
| €m | restated €m |
€m | restated €m |
€m | restated €m |
€m | restated €m |
€m | restated €m |
€m | restated €m |
€m | restated €m |
| 556 | 599 | 224 | 210 | 101 | 105 | 79 | 84 | 136 | 142 | – | – | 2,687 | 2,755 |
| 67 | 67 | – | – | 1 | – | 1 | 2 | 18 | 19 | (93) | (94) | – | – |
| 623 | 666 | 224 | 210 | 102 | 105 | 80 | 86 | 154 | 161 | (93) | (94) | 2,687 | 2,755 |
| 19 | 45 | 43 | 38 | 27 | 25 | 7 | 13 | (108) | (10) | – | – | 398 | 529 |
| 2 | 2 | 1 | – | – | – | – | – | 7 | 78 | – | – | 24 | 91 |
| 21 | 47 | 44 | 38 | 27 | 25 | 7 | 13 | (101) | 68 | – | – | 422 | 620 |
| 29 | 47 | 44 | 38 | 26 | 25 | 7 | 13 | (13) | (4) | – | – | 519 | 552 |
| (9) | – | – | – | – | – | – | – | (79) | – | – | – | (88) | – |
| – | – | – | – | – | – | – | – | – | 72 | – | – | – | 72 |
| – | – | – | – | – | – | – | – | (10) | (1) | – | – | (12) | (5) |
| 1 | – | – | – | – | – | – | – | 1 | – | – | – | 1 | – |
| – | – | – | – | 1 | – | – | – | – | 1 | – | – | 2 | 1 |
| 21 | 47 | 44 | 38 | 27 | 25 | 7 | 13 | (101) | 68 | – | – | 422 | 620 |
| 4 | 5 | ||||||||||||
| (18) | (11) | ||||||||||||
| (1) | 11 | ||||||||||||
| (160) | (158) |
| Mediengruppe RTL Deutschland |
Groupe M6 |
||||
|---|---|---|---|---|---|
| June 2014 €m |
December 2013 restated €m |
June 2014 €m |
December 2013 restated €m |
||
| Segment assets | |||||
| (assets classified as held for sale and investments accounted for using the equity method excluded) | 1,461 | 1,494 | 1,519 | 1,416 | |
| Investments accounted for using the equity method | 59 | 76 | 2 | 2 | |
| Assets classified as held for sale | – | – | – | 22 | |
| Segment assets | 1,520 | 1,570 | 1,521 | 1,440 | |
| Segment liabilities (liabilities directly associated with non-current assets classified as held for sale excluded) | 854 | 872 | 651 | 633 | |
| Liabilities directly associated with non-current assets classified as held for sale | – | – | – | 24 | |
| Segment liabilities | 854 | 872 | 651 | 657 | |
| Invested capital | 666 | 698 | 870 | 783 | |
| Segment assets | |||||
| Deferred tax assets | |||||
| Income tax receivable | |||||
| Other assets1 | |||||
| Cash and cash equivalents | |||||
| Total assets | |||||
| Segment liabilities | |||||
| Deferred tax liabilities | |||||
| Income tax payable | |||||
| Other liabilities | |||||
| Total liabilities | |||||
| 1 Including cash and cash equivalents |
classified as held for sale
| FremantleMedia | RTL Nederland |
RTL | RTL Radio (France) |
Other Segments |
Eliminations | Group | Total | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| June 2014 |
December 2013 restated |
June 2014 |
December 2013 restated |
Belgium June 2014 |
December 2013 restated |
June 2014 |
December 2013 restated |
June 2014 |
December 2013 restated |
June 2014 |
December 2013 restated |
June 2014 |
December 2013 restated |
| €m | €m | €m | €m | €m | €m | €m | €m | €m | €m | €m | €m | €m | €m |
| 1,746 | 1,755 | 376 | 390 | 166 | 167 | 163 | 167 | 306 | 416 | (129) | (123) | 5,608 | 5,682 |
| 6 | – | 5 | 4 | – | – | – | – | 284 | 277 | – | – | 356 | 359 |
| – | – | – | – | – | – | – | – | – | – | – | – | – | 22 |
| 1,752 | 1,755 | 381 | 394 | 166 | 167 | 163 | 167 | 590 | 693 | (129) | (123) | 5,964 | 6,063 |
| 498 | 496 | 132 | 144 | 110 | 115 | 60 | 68 | 258 | 304 | (129) | (123) | 2,434 | 2,509 |
| – | – | – | – | – | – | – | – | – | – | – | – | – | 24 |
| 498 | 496 | 132 | 144 | 110 | 115 | 60 | 68 | 258 | 304 | (129) | (123) | 2,434 | 2,533 |
| 1,254 | 1,259 | 249 | 250 | 56 | 52 | 103 | 99 | 332 | 389 | – | – | 3,530 | 3,530 |
| 5,964 | 6,063 | ||||||||||||
| 375 | 389 | ||||||||||||
| 36 | 42 | ||||||||||||
| 631 | 501 | ||||||||||||
| 334 | 542 | ||||||||||||
| 7,340 | 7,537 | ||||||||||||
| 2,434 | 2,533 | ||||||||||||
| 55 | 58 | ||||||||||||
| 40 | 90 | ||||||||||||
| 1,768 | 1,263 | ||||||||||||
| 4,297 | 3,944 |
Details of the main acquisitions in the period are set out below. Had the business combinations been at the beginning of the year, the revenue and the profit attributable to RTL Group would not have materially changed.
On 7 January 2014, Groupe M6 acquired 51 per cent of Best of TV SAS and Best of TV Benelux SPRL. Best of TV has developed a leading position in France in distributing infomercial and teleshopping products through major French retail chains. This acquisition enables Groupe M6 to strengthen the position of its subsidiary, Home Shopping Service, in the home shopping and infomercial business. Best of TV is allocated to Groupe M6 cash generating unit. The transaction qualified as a business combination since RTL Group gained the control of Best of TV. The purchase consideration amounted to €9 million, net of cash acquired, and resulted in the recognition of a provisional goodwill of €8 million. Goodwill in connection with the transaction will not be tax deductible. The remaining 49 per cent interest is subject to put and call options based on the fair value of the entity at the exercise date between 2017 and 2025. The amount of the option is capped at €19 million. The put option has been recognised through equity as a liability for the present value of the redemption amount of €16 million.
| Cash and cash equivalents | 3 |
|---|---|
| Other inventories | 3 |
| Accounts receivable and other financial assets | 7 |
| Accounts payable | (3) |
| Loans | (2) |
| Non-controlling interests | (4) |
| Net assets acquired | 4 |
| Goodwill | 8 |
| Total purchase consideration | 12 |
| Deferred consideration | (6) |
| Cash and cash equivalents in operations acquired | (3) |
| Cash outflow on acquisition | 3 |
On 26 March 2014, RTL Group acquired 75 per cent of 495 Productions Holdings LLC and its 100 per cent affiliates ('495 Productions'). 495 Productions is a US-based production entity specialising in unscripted, female-skewed docu-series for cable networks. This acquisition enables FremantleMedia to expand and diversify its core TV production business internationally. 495 Productions is allocated to the FremantleMedia cash generating unit. The transaction qualified as a business combination since RTL Group gained the control of 495 Productions. The purchase consideration amounted to €18 million, net of cash acquired. This resulted in the recognition of a provisional goodwill of €20 million. Goodwill in connection with the transaction will be tax deductible. The remaining 25 per cent interest is subject to put and call options based on a performance-related component. The put option has been recognised through equity as a liability for the present value of the redemption amount of €7 million.
| (2) |
|---|
| 20 |
| 20 |
| – |
| (13) |
| 1 |
| 10 |
| 2 |
2014 €m
2014 € m
On 20 June 2013, RTL Group acquired 57.5 per cent of BroadbandTV Corp. (51 per cent on a fully diluted per share basis). BroadbandTV is the third largest multi-channel network on YouTube. The transaction accelerated RTL Group's expansion strategy in the online video market, especially in the new generation of video channels, networks and aggregators distributed via internet and requiring the ability to aggregate, manage and monetise audiences across a large number of channels. The transaction qualified as a business combination since RTL Group gained the control of BroadbandTV.
The purchase consideration, partly contributed to BroadbandTV, amounted to €23 million, net of cash acquired and resulted in the recognition of a goodwill of €22 million. At 31 December 2013, the contingent consideration based on a variable performance component that included earn-out mechanisms up to a maximum and undiscounted amount of €11 million, had been recognised for €2 million and re-measured at 30 June 2014 to €0.3 million. The related impact is reported in "Other operating income". This was a Level 3 fair value measurement at initial recognition. The goodwill arising from the acquisition was not tax deductible. The transaction related costs amounting to €1.5 million, mainly consisting of legal fees and due diligence costs, were reported in "Other operating expenses".
■ On 18 April 2013, RTL Group acquired 20 per cent of FutureWhiz Media BV through a contribution to the share capital and share premium and an airtime contribution. The company manages a subscription based educational online platform in the Netherlands, Squla. The acquisition was in line with the strategy of the Group to expand online. Jointly controlled, the company was proportionately consolidated and is accounted for using the equity method in accordance with IFRS 11. The purchase consideration amounted to €1.5 million, net of cash acquired. The purchase accounting did not lead to the recognition of additional identifiable assets and liabilities. The transaction resulted in the recognition of a goodwill of €2 million;
| Carrying amount at date of gain of control €m |
2013 Incre mental value €m |
Fair value at date of gain of control €m |
|
|---|---|---|---|
| Cash and cash equivalents | 7 | – | 7 |
| Other intangible assets | 1 | 2 | 3 |
| Accounts receivable and other financial assets |
5 | – | 5 |
| Accounts payable | (2) | – | (2) |
| Deferred tax liabilities | – | (1) | (1) |
| Non-controlling interests | (4) | – | (4) |
| Net assets acquired | 7 | 1 | 8 |
| Goodwill | 22 | ||
| Total purchase consideration | 30 | ||
| Contingent consideration | (2) | ||
| Cash and cash equivalents in operations acquired |
(7) | ||
| Cash outflow on acquisition | 21 |
Detail of the net assets acquired and goodwill are as follows:
| 2014 €m |
|
|---|---|
| Purchase consideration: | |
| – Cash paid | 28 |
| – Payments on prior years' acquisitions | (2) |
| – Deferred consideration | 6 |
| Total purchase consideration | 32 |
| Less: | |
| Fair value of net assets acquired | (4) |
| Goodwill | 28 |
The net assets and liabilities arising from the acquisitions are as follows:
| 2014 |
|---|
| Fair |
| value |
| €m |
| Cash outflow on acquisitions | 23 |
|---|---|
| Cash and cash equivalents in operations acquired | (5) |
| Payments on prior years' acquisitions | 2 |
| Deferred consideration | (6) |
| Less: | |
| Total purchase consideration | 32 |
| Goodwill | 28 |
| Net assets acquired | 4 |
| Non-controlling interests | (4) |
| Loans | (2) |
| Accounts payable | (16) |
| Accounts receivable and other financial assets | 8 |
| Other inventories | 3 |
| Current programme rights | 10 |
| Cash and cash equivalents | 5 |
RTL Group management have conducted impairment tests on some cash generating units ("CGU") and investments accounted for using the equity method where indications of a possible change in recoverable amount arose over the six months ending 30 June 2014 and on those that had the smallest headroom at 31 December 2013.
The background, the assumptions and results of the impairment testing conducted at 30 June 2014 are described here after for the most significant cash generating units:
| June 2014 Perpetual growth rate % a year |
Discount rate % |
December 2013 Perpetual growth rate % a year |
Discount rate % |
|
|---|---|---|---|---|
| Cash-generating units |
||||
| FremantleMedia | 3.0 | 7.7 | 3.0 | 7.7 |
| Radical Media | 2.0 | 8.1 | 2.0 | 8.0 |
| Other segments – Hungarian language cable channels |
||||
| and M-RTL | 2.0 | 13.4 | 2.0 | 12.9 |
Following continuing pressure on the production and distribution business, due to reduced volumes and pricing, management have updated the business plan to take into account the latest available information, primarily on the US. Based on this revised 10 year plan, the headroom that existed at the level of FremantleMedia has been reduced to nil (31 December 2013: €190 million). The value in use on the basis of a discounted cash flow model was retained for determining the recoverable amount. The following changes in assumptions would individually cause the recoverable amount to fall below the carrying value:
The commercial division of the CGU has to face tightening advertiser budgets and intense competition. RTL Group's management have consequently reviewed the assumptions underlying the DCF model.
The recoverable amount of Radical Media has been determined on the basis of the value in use at 30 June 2014. RTL Group's management consequently recorded a goodwill impairment loss of €9 million against the carrying value of Radical Media. The recoverable amount is hence €28 million at 30 June 2014.
On 2 June 2014, a new advertising tax was submitted to the Hungarian Parliament and was subsequently adopted via an accelerated procedure on 11 June 2014. On 4 July 2014, the Hungarian Parliament adopted several amendments to the tax. The new revised tax came into force on 15 August 2014 with the first payments, in two equal instalments, under this new regime to be made on 20 August and 20 November 2014 respectively.
The tax is steeply progressive with rates between nil – 40 per cent, and is calculated, in general, on the net revenues derived from advertising plus the margins which the sales houses affiliated to the taxpayers charge to their customers. The tax base will be calculated by aggregating the tax bases of affiliated undertakings. As a result, entities belonging to a group of companies are taxed at higher tax rates than independent legal entities.
RTL Group's management are determined to pursue all options to protect the Hungarian assets against the effects of this new regulation. Nevertheless, in accordance with IFRS guidance, the Group has assumed that the impact of this new advertising tax on RTL Group's Hungarian business continues throughout the planning period. RTL Group has also assumed that the Hungarian business is a going concern.
The recoverable amount of the Hungarian language cable channels and M-RTL has been determined at a non-significant amount at 30 June 2014 on the basis of the value in use. RTL Group's management consequently recorded:
After impairment, the carrying amount is €65 million. The remaining non-current assets, mainly composed of property plant & equipment and software licenses and amounting to approximately €10 million, have not been impaired as their fair value less costs of disposal was considered as being above or at least equal to their carrying value. The other current assets (€86 million), mainly composed of inventories and financial assets, have been valued in accordance with the relevant applicable standard and accordingly no additional impairment was required.
RTL Group management will conduct further analysis on practical implications of the new advertising tax in Hungary. This might conduct to further operating losses.
In January 2014, the Spanish company Infraestructuras y Gestion 2002, SL ("Ingest") filed a legal action before the Supreme Court against the renewal of the concession agreements for Atresmedia, Mediaset Espana and Prisa signed on 3 April 2010. If successful, this action would lead to the closure of eight terrestrial digital television channels, two of them belonging to Atresmedia. All the requirements for operating these channels were met according to Atresmedia management.
On 6 February 2014, Vice Media, Inc. and RTL Group entered in a joint-venture agreement through the creation of Vice Food LLC, held at 70 and 30 per cent, respectively. The venture was set up to operate, commission, develop and produce digital content for, a new online digital vertical known as 'Munchies, Food by Vice', across multiple platforms. Vice Media and FremantleMedia are also individually providing content to the venture.
The ownership of RTL Group in Atresmedia decreased from 20.5 per cent at 31 December 2013 to 19.2 per cent at 30 June 2014 following the partial novation, on 19 February 2014, of the Integration Agreement executed on 14 December 2011 with the shareholders of La Sexta and the reduction of the number of treasury shares. In the view of the representatives of RTL Group to the Board of Directors and other governing bodies of Atresmedia, management consider that this does not change the significant influence of RTL Group in Atresmedia. This transaction resulted in a dilution of RTL Group's interest generating a capital loss of €5 million reported in "Gain/loss from sale of subsidiaries, other investments and re-measurement to fair value of preexisting interest in acquiree".
On 21 February 2014, RTL Group disposed of its ownership in Asia Sports Ventures Pte. Ltd. and recognised a capital gain of €3 million presented in "Gain/loss from sale of subsidiaries, other investments and re-measurement to fair value of pre-existing interest in acquiree".
On 15 April 2014, Contact Vlaanderen NV was liquidated generating a capital gain of €1 million presented in "Gain/loss from sale of subsidiaries, other investments and re-measurement to fair value of pre-existing interest in acquiree".
The management of TF6 announced on 25 April 2014 the channel will cease its operations at the end of 2014 following a significant drop in revenue.
On 12 June 2014, RTL Group disposed of all the shares held in BIG RTL Broadcast Private Limited ("BIG RTL") to the other shareholder, the Reliance Group. The capital loss related to the exit by RTL Group of the joint venture, concluded on 27 May 2011 and previously held at 50 per cent, amounts to €1 million. The capital loss is presented in "Gain/loss from sale of subsidiaries, other investments and re-measurement to fair value of pre-existing interest in acquiree". The disposal resulted in an outflow, net of transaction costs, of €1 million.
At 31 March 2014, Groupe M6 disposed of 100 per cent of its interests held in Mistergooddeal SA. The sale proceeds and the capital gain amounted to €2 million and €1 million, respectively.
At 30 June 2014, AVE I Vermögensverwaltungsgesellschaft mbH & Co. KG and its parent company, AVE VI Vermögensverwaltungsgesellschaft mbH & Co. KG, previously accounted for using the equity method and classified as assets held for sale at 31 December 2013, merged into RTL Radio Deutschland GmbH. The capital gain amounted to €3 million.
Assets and liabilities disposed of
2014 €m
2014
| Net gain on disposals | 4 |
|---|---|
| Net assets disposed of | 2 |
| Fair value of consideration received | 2 |
Cash inflow on disposals
| €m | |
|---|---|
| Assets classified as held for sale | (20) |
| Liabilities directly associated with non-current assets classified as held for sale |
22 |
| Net assets disposed of | 2 |
| Total disposal proceeds | 2 |
| Less: | |
| Deferred payments on disposal proceeds | (2) |
| Cash inflow on disposals | – |
FremantleMedia Group Limited entered, in March 2014, into an insurance arrangement related to its defined benefit plan. As a result, a re-measurement loss amounting to €17 million has been recognised in other comprehensive income at 30 June 2014.
The Group's core broadcast business is subject to strong seasonal fluctuations and hence the results for the first six months of 2014 do not necessarily permit predictions as to its' future performance. Advertising revenue is impacted by underlying economic conditions and the cyclical demand for advertising – which during the important fourth quarter help offset the traditionally weaker summer months. The Group's content arm, FremantleMedia, usually generates a higher proportion of EBITA in the second half of the year due, in part, to the seasonality of programme sales but also to the revenue generated by the distribution, licensing and merchandising business. This seasonality is not expected to be any different for 2014.
The calculation of basic earnings per share is based on the profit attributable to RTL Group shareholders of €202 million (2013: €418 million) and a weighted average number of ordinary shares outstanding during the period of 153,613,376 (June 2013: 153,618,853) calculated as follows:
| June 2014 | June 2013 | |
|---|---|---|
| Profit for the period attributable to RTL Group shareholders (in € million) | 202 | 418 |
| Weighted average number of ordinary shares: | ||
| Issued ordinary shares at 1 January | 154,787,554 154,787,554 | |
| Effect of treasury shares held | (1,168,701) | (1,168,701) |
| Effect of liquidity program (note 13.) | (5,477) | – |
| Weighted average number of ordinary shares | 153,613,376 153,618,853 | |
| Basic earnings per share (in €) | 1.32 | 2.72 |
| Diluted earnings per share (in €) | 1.32 | 2.72 |
The Company's General Meeting held on 16 April 2014 has authorised the Board of Directors to acquire a total number of shares of the Company not exceeding 150,000 in addition to the own shares already held (i.e. 1,168,701 own shares) as of the date of the General Meeting. This authorisation is valid for five years and the purchase price per share is fixed at a minimum of 90 per cent and a maximum of 110 per cent of the average closing price of the RTL Group share over the last five trading days preceding the acquisition.
Following the shareholders' resolution and in order to foster the liquidity and regular trading of its shares that are listed on the stock market in Brussels and Luxembourg and the stability of the price of its shares, the Company has entered on 28 April 2014 into a liquidity agreement (the "Liquidity Agreement") with Kepler Capital Markets SA (the "Liquidity Provider"). During the period ended 30 June 2014, under the Liquidity Agreement, the Liquidity Provider has:
At 30 June 2014, a total of 42,091 RTL Group shares are held by the Company and €7.1 million are in deposit with the Liquidity Provider under the terms of the Liquidity Agreement.
With the view to invest its cash surplus, RTL Group SA entered in 2006 with Bertelsmann SE & Co. KGaA (previously Bertelsmann AG) into a Deposit Agreement, the main terms of which are:
The interests in Gruner + Jahr AG Co. KG and shares of Bertelsmann UK Ltd have also been granted as pledge by Bertelsmann SE & Co. KGaA to CLT-UFA SA, a subsidiary of RTL Group, in connection with the accounts receivable related to PLP and Compensation Agreements as defined below.
At 30 June 2014, the amount deposited amounts to € nil million (December 2013: € nil million). The interest income for the period amounts to €0.1 million (June 2013: €0.2 million).
On 22 December 2011, RTL Group Deutschland GmbH, a Group company, and Bertelsmann SE & Co. KGaA entered into an agreement related to the deposit of surplus cash by RTL Group Deutschland GmbH with the shareholder. To secure the deposit, Bertelsmann pledged to RTL Group Deutschland GmbH its aggregate current partnership interest in Gruner + Jahr AG & Co. KG as well as all additional partnership interests in Gruner + Jahr it may create or acquire.
At 30 June 2014, the three-month deposit of RTL Group Deutschland GmbH with Bertelsmann is € nil million (December 2013: € nil million). The interest income for the period amounts to € nil million (June 2013: € nil million).
RTL Group SA additionally entered into a Treasury Agreement in North America with Bertelsmann Inc. Interest rates are based on US Libor plus 10 basis points. At 30 June 2014, the balance of the cash pooling payable amounts to € nil million (December 2013: € nil million). The interest income/expense for the period is not significant (June 2013: below €1 million).
On 7 March 2013, RTL Group Deutschland GmbH, a Group company, and Bertelsmann SE & Co. KGaA entered into a shareholder loan agreement pursuant to which Bertelsmann makes available a term loan facility in the amount of €500 million and a revolving and swingline facility in the amount of up to €1 billion. The main terms of these facilities are:
The interest expense for the period amounts to €7.2 million (June 2013: €4.7 million). The commitment fee charge for the period amounts to €0.7 million (June 2013: below €0.5 million).
On 26 June 2008, the Board of Directors of RTL Group agreed to proceed with the tax pooling of its indirect subsidiary RTL Group Deutschland GmbH ("RGD") into Bertelsmann Capital Holding GmbH ("BCH"), a direct subsidiary of Bertelsmann AG.
To that effect, RGD entered into a Profit and Loss Pooling Agreement ("PLP Agreement") with BCH for a six-year period starting 1 January 2008. Simultaneously, Bertelsmann AG entered into a Compensation Agreement with CLT-UFA, a direct subsidiary of RTL Group, providing for the payment to CLT-UFA of an amount compensating the above transfer and an additional commission ("Commission") amounting to 50 per cent of the tax saving based upon the taxable profit of RGD.
As at 30 June 2014, the balance payable to BCH amounts to €671 million (December 2013: €481 million) and the balance receivable from Bertelsmann SE & Co. KGaA amounts to €542 million (December 2013: €390 million).
For the period ended 30 June 2014, the German income tax in relation to the tax pooling with Bertelsmann SE & Co. KGaA amounts to €60 million (June 2013: €61 million). The Commission amounts to €21 million (June 2013: €31 million).
The trade tax loss carry forward at the level of Bertelsmann SE & Co. KGaA was completely consumed in 2013 resulting in a lower commission. At 30 June 2014, the commission related to the trade tax has been calculated on the basis of the trade tax carry loss expected for 2014 at the level of Bertelsmann SE & Co. KGaA.
All Danish entities under common control by an ultimate parent are subject to Danish tax consolidation, which is mandatory under Danish tax law. Blu A/S, a 100 per cent held subsidiary of RTL Group, was elected as the management company of the Bertelsmann Denmark Group.
The UK Group relief of FremantleMedia Group to Bertelsmann Group resulted in a tax income of € nil million (June 2013: €2 million).
As a result of the adoption of IFRS 11, the effects of the change in accounting policies on the condensed consolidated interim income statement, the condensed consolidated statement of financial position and condensed consolidated interim cash flow statement are presented below. There was no impact in the condensed consolidated interim statement of comprehensive income and in the condensed consolidated interim statement of changes in equity. The changes mainly relate to RTL Disney Fernsehen GmbH & Co.KG.
| As originally published €m |
Restatement IFRS11 €m |
Restated €m |
|
|---|---|---|---|
| Revenue | 2,779 | (24) | 2,755 |
| Other operating income | 15 | – | 15 |
| Consumption of current programme rights | (866) | 7 | (859) |
| Depreciation, amortisation and impairment | (89) | 2 | (87) |
| Other operating expenses | (1,303) | 12 | (1,291) |
| Amortisation and impairment of fair value adjustments on acquisitions of subsidiaries | (5) | – | (5) |
| Gain from sale of subsidiaries, other investments and re-measurement to fair value of pre-existing interest in acquiree | 1 | – | 1 |
| Profit from operating activities | 532 | (3) | 529 |
| Share of results of investments accounted for using the equity method | 88 | 3 | 91 |
| Earnings before interest and taxes ("EBIT") | 620 | – | 620 |
| Interest income | 5 | – | 5 |
| Interest expense | (11) | – | (11) |
| Financial results other than interest | 11 | – | 11 |
| Profit before taxes | 625 | – | 625 |
| Income tax expense | (158) | – | (158) |
| Profit for the period | 467 | – | 467 |
| Attributable to: | |||
| RTL Group shareholders | 418 | – | 418 |
| Non-controlling interests | 49 | – | 49 |
| Profit for the period | 467 | – | 467 |
| EBITA* | 552 | – | 552 |
| Reversal of impairment of investments accounted for using the equity method | 72 | – | 72 |
| Amortisation and impairment of fair value adjustments on acquisitions of subsidiaries | (5) | – | (5) |
| Re-measurement of earn-out arrangements | |||
| Gain from sale of subsidiaries, other investments and re-measurement to fair value of pre-existing interest in acquiree | 1 | – | 1 |
| Earnings before interest and taxes ("EBIT") | 620 | – | 620 |
| Earnings per share (in €) | |||
| – Basic | 2.72 | – | 2.72 |
| – Diluted | 2.72 | – | 2.72 |
For the six months ended 30 June 2013
* EBITA represents earnings before interest and taxes excluding impairment of goodwill and of disposal group, and amortisation and impairment of fair value adjustments on acquisitions of subsidiaries, impairment of investments accounted for using the equity method, re-measurement of earn-out arrangements and gain or loss from sale of subsidiaries, other investments and re-measurement to fair value of pre-existing interest in acquiree
As at 31 December 2013
| As originally published €m |
Restatement IFRS11 €m |
Restated €m |
|
|---|---|---|---|
| Non-current assets | |||
| Programme and other rights | 114 | (5) | 109 |
| Goodwill | 2,709 | (2) | 2,707 |
| Other intangible assets | 198 | – | 198 |
| Property, plant and equipment | 332 | (1) | 331 |
| Investments accounted for using the equity method | 336 | 23 | 359 |
| Loans and other financial assets | 141 | 1 | 142 |
| Deferred tax assets | 392 | (3) | 389 |
| 4,222 | 13 | 4,235 | |
| Current assets | |||
| Programme rights | 961 | (6) | 955 |
| Other inventories | 15 | – | 15 |
| Income tax receivable | 42 | – | 42 |
| Accounts receivable and other financial assets | 1,726 | (5) | 1,721 |
| Cash and cash equivalents | 574 | (32) | 542 |
| 3,318 | (43) | 3,275 | |
| Assets classified as held for sale | 27 | – | 27 |
| Current liabilities | |||
| Loans and bank overdrafts | 37 | (1) | 36 |
| Income tax payable | 92 | (2) | 90 |
| Accounts payable | 2,538 | (25) | 2,513 |
| Provisions | 195 | (1) | 194 |
| 2,862 | (29) | 2,833 | |
| Liabilities directly associated with non-current assets classified as held for sale | 24 | – | 24 |
| Net current assets | 459 | (14) | 445 |
| Non-current liabilities | |||
| Loans | 530 | (1) | 529 |
| Accounts payable | 331 | – | 331 |
| Provisions | 169 | – | 169 |
| Deferred tax liabilities | 58 | – | 58 |
| 1,088 | (1) | 1,087 | |
| Net assets | 3,593 | – | 3,593 |
| Equity attributable to RTL Group shareholders | 3,159 | – | 3,159 |
| Equity attributable to non-controlling interests | 434 | – | 434 |
| Equity | 3,593 | – | 3,593 |
For the six months ended 30 June 2013
| As originally published € m |
Restatement IFRS11 € m |
Restated € m |
|
|---|---|---|---|
| Cash flows from operating activities | |||
| Profit before taxes | 625 | – | 625 |
| Adjustments for: | |||
| – Depreciation and amortisation | 88 | (2) | 86 |
| – Value adjustments, impairment and provisions | 40 | – | 40 |
| – Equity-settled share-based payments expenses | 2 | – | 2 |
| – Gain on disposal of assets | (6) | – | (6) |
| – Financial results including net interest expense and share of results of investments accounted for using the equity method |
(62) | 12 | (50) |
| Use of provisions | (41) | – | (41) |
| Working capital changes | 67 | 2 | 69 |
| Income taxes paid | (132) | 2 | (130) |
| Net cash from operating activities | 581 | 14 | 595 |
| Cash flows from investing activities | |||
| Acquisitions of: | |||
| – Programme and other rights | (34) | 3 | (31) |
| – Subsidiaries, net of cash acquired | (66) | 2 | (64) |
| – Other intangible and tangible assets | (33) | – | (33) |
| – Other investments and financial assets | (10) | (5) | (15) |
| (143) | – | (143) | |
| Proceeds from the sale of intangible and tangible assets | 14 | 1 | 15 |
| Disposal of other subsidiaries, net of cash disposed of | (1) | – | (1) |
| Proceeds from the sale of investments accounted for using the equity method, other investments and financial assets | 6 | – | 6 |
| Current deposit with shareholder | 426 | – | 426 |
| Interest received | 21 | – | 21 |
| 466 | 1 | 467 | |
| Net cash from investing activities | 323 | 1 | 324 |
| Cash flows from financing activities | |||
| Interest paid | (1) | – | (1) |
| Transactions on non-controlling interests | 1 | – | 1 |
| Term loan facility due to shareholder | 500 | – | 500 |
| Proceeds from loans | 9 | – | 9 |
| Repayment of loans | (3) | – | (3) |
| Dividends paid | (1,746) | – | (1,746) |
| Net cash used in financing activities | (1,240) | – | (1,240) |
| Net increase/(decrease) in cash and cash equivalents | (336) | 15 | (321) |
| Cash and cash equivalents and bank overdrafts at beginning of period | 645 | (29) | 616 |
| Effect of exchange rate fluctuation on cash held | (2) | – | (2) |
| Cash and cash equivalents and bank overdrafts at end of period | 307 | (14) | 293 |
On the 29 July 2014, Groupe M6's application to convert Paris Premiere into a free to air DTT channel was rejected by the CSA, the French media authority. Groupe M6 disagrees with this decision which threatens Paris Première's future. Pending the reply of broadcasting platforms, whose opinion it will seek, Groupe M6 reserves the right to use all means of redress at its disposal to review the situation created by this ruling.
On the 31 July 2014, RTL Group announced the acquisition of a 65 per cent stake in SpotXchange, a leading programmatic video advertising platform. RTL Group's initial investment amounts to USD 144 million (€108 million); the parties have agreed on an earn-out component that might increase the initial consideration subject to the future performance of SpotXchange. Under the terms of the deal, RTL Group also has the opportunity to acquire the remaining shareholding in the future. The deal is expected to close by the end of August 2014. SpotXchange will be fully consolidated at the effective date of control.
We, Guillaume de Posch and Anke Schäferkordt, Chief Executive Officers and Elmar Heggen, Chief Financial Officer, confirm, to the best of our knowledge, that the condensed consolidated interim financial information which has been prepared in accordance with IAS 34 as adopted by the European Union, give a true and fair view of the assets, liabilities, financial position and profit or loss of RTL Group and the undertakings included in the consolidation taken as a whole, and that the Directors' report includes a fair review of the development and performance of the business and the position of RTL Group and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face.
Luxembourg, 20 August 2014
Anke Schäferkordt and Guillaume de Posch Chief Executive Officers
Elmar Heggen Chief Financial Officer
PricewaterhouseCoopers, Société coopérative, 400, route d'Esch B.P. 1443 L–1014 Luxembourg T: +352 494848 1 F:+352 494848 2900 www.pwc.lu
Cabinet de révision agréé Expert-comptable (autorisation gouvernementale n°10028256) R.C.S. Luxembourg B 65 477 R.C.S. Luxembourg B 65 477 – TVA LU25482518
We have reviewed the accompanying condensed consolidated interim statement of financial position of RTL Group S.A. and its subsidiaries (the "Group") as of 30 June 2014 and the related condensed consolidated interim income statement, statement of comprehensive income, statement of changes in equity and cash flow statement for the six-month period then ended, and a summary of significant accounting policies and other explanatory notes (the "condensed consolidated interim financial information"). The Board of Directors is responsible for the preparation and presentation of this condensed consolidated interim financial information in accordance with IAS 34, "Interim financial reporting" as adopted by the European Union. Our responsibility is to express a conclusion on this condensed consolidated interim financial information based on our review.
We conducted our review in accordance with the International Standard on Review Engagements 2410, "Review of interim financial information performed by the independent auditor of the entity", as adopted for Luxembourg by the "Institut des Réviseurs d'Entreprises". A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Based on our review, nothing has come to our attention that causes us to believe that the accompanying condensed consolidated interim financial information is not prepared, in all material respects, in accordance with IAS 34, "Interim financial reporting" as adopted by the European Union.
Luxembourg, 20 August 2014
PricewaterhouseCoopers, Société coopérative Represented by
Pascal Rakovsky
Marc Minet
| Financial calendar | |
|---|---|
| 13 November 2014 | Results January to September 2014 |
| Credits | |
| Cover | Vox, Nick van Ormondt, Jean Brice Lemal/Aurelien Faidy/Marie Etchegoyen/M6, I-Stockphoto (2) |
| Page 2 | RTL Group, SpotXchange |
| Page 6 | Dominik Gigler |
| Publisher | |
| RTL Group 45, Bd Pierre Frieden L–1543 Luxembourg Luxembourg |
|
| Further information | |
| For Journalists | Corporate Communications Phone: +352 2486 5200 |
| For analysts and investors | Investor Relations Phone: +352 2486 5074 |
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