Earnings Release • Jul 28, 2015
Earnings Release
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Paris, July 28, 2015 2015 half-year results - NRJ Group
In the first half-year 2015, NRJ Group generated revenue1of €185.1 million, up 2.0% on the first half-year of 2014.
This can be attributed to a dynamic sales policy for its Media activities and a positive result from its Radio and Television editorial strategy (the cumulative NRJ 12 and CHERIE 25 audience share grew by 0.1 points over one year 2 and 0.7 points, i.e. up almost 37%, since the new editorial strategy was deployed2 ).
The current operating profit1was €14.3 million, down slightly (-4.7%), and as expected reflects increased costs in editorial and commercial activities.
The consolidated net profit attributable to the Group was up 25.3% to €10.9 million and the net cash surplus3 was €156.8 million, up 31.8% on the December 31, 2014 figure.
| In millions of euros | H1 2015 | H1 2014® | Change |
|---|---|---|---|
| Revenue excluding dissimilar barters | 185.1 | 181.5 | +2.0% |
| Revenue including dissimilar barters | 186.7 | 183.4 | +1.8% |
| Current operating profit excluding dissimilar barters | 14.3 | 15.0 | -4.7% |
| Current operating profit | 14.2 | 14.8 | -4.1% |
| Non-current operating income and expenses | (0.2) | (1.1) | +81.8% |
| Operating profit | 14.0 | 13.7 | +2.2% |
| Net profit attributable to the Group | 10.9 | 8.7 | +25.3% |
| In millions of euros | At June 30, 2015 | At Dec 31, 2014® | Change |
| Net cash surplus* | 156.8 | 119.0 | +31.8% |
| Shareholders' equity (Group share) | 524.9 | 510.8 | +2.8% |
(R) Data restated after application of the IFRIC 21 tax accounting standard, backdated to January 1, 2014.
1 Excluding dissimilar barters
2 Médiamétrie, Médiamat, NRJ12+Chérie 25 cumulative audience share, target 4+, performance over one year: June 2015 vs June 2014 and performance June 2015 vs Dec. 2014 3 Available cash net of financial liabilities linked to financing operations
| In millions of euros | H1 2015 | H1 2014® | Change |
|---|---|---|---|
| Revenue excluding dissimilar barters | 185.1 | 181.5 | +2.0% |
| Music Media and Events | 93.3 | 92.3 | +1.1% |
| Television | 41.7 | 38.0 | +9.7% |
| International Activities | 16.7 | 19.6 | -14.8% |
| Shows and Other Productions | 1.6 | 2.2 | -27.3% |
| Broadcasting | 31.8 | 29.4 | +8.2% |
| Résultat Opérationnel Courant hors échanges dissimilaires | 14.3 | 15.0 | -4.7% |
| Music Media and Events | 15.5 | 15.7 | -1.3% |
| Television | (16.3) | (14.3) | -14.0% |
| International Activities | 5.1 | 5.0 | +2.0% |
| Shows and Other Productions | 0.8 | 0.5 | +60.0% |
| Broadcasting | 9.1 | 10.1 | -9.9% |
| Other activities | 0.1 | (2.0) | na |
(R) Data restated after application of the IFRIC 21 tax accounting standard, backdated to January 1st, 2014. n/a: not applicable
Radio recorded a 0.8% increase in revenue, driven by a good sales dynamic in a slowing advertising market. CHERIE FM continued to stand out with a 2-digit increase in advertising revenue for the 2nd consecutive quarter.
According to the latest Médiamétrie wave (April-June 2015), NRJ Group remains France's top commercial radio offering4 with more than 12.1 million listeners5 tuning in daily to one of the Group's stations. NRJ Group's audience share (AS) grew by 0.3 points over the year6 to 16.0%. These results allow us to disprove the "atypical" trends in the previous wave (the Group's four radio stations recorded a total increase in AS of 1.6 points over the wave7 ) and to face the 3rd quarter 2015 with confidence:
These audience numbers prove the relevance of the editorial strategy that has been in place for several months and are in line with Group priorities: to increase the contribution from adult radio, and strengthen NRJ's position.
Digital continued to grow at a steady 10.3% to €4.3 million, with its profitability up considerably (x2.5) and a current operating profit of €1.0 million. In a quest to speed up the development of its digital offering, the Group has created a new structure: NRJ Digital Solutions, which began by launching a new digital-only brand, NRJ GAMES (website devoted to video games, high-tech and connected objects). Alongside this, NRJ Group held on to the top position for web radio in France and, according to the latest OJD figures, attracted almost 45 million active listens in June9 . NRJ is the number one web radio brand in France, followed by CHERIE FM with more than 31 million and almost 6 million active listens respectively9 . NRJ, the top radio app with almost 10 million visits per month10, ranks among the 10 most used apps in France. Finally, NRJ was once again crowned the number one mobile radio brand in France11 .
As already mentioned, the Group is increasing the resources available to its sales and editorial teams in a quest for future growth. The current operating profit of the MME division remained virtually unchanged on the 1st half-year 2014 at €15.5 million, giving an operating margin of 16.6%.
Source: Médiamétrie, 126,000 radio, April-June 2015, Mon-Fri, 5h-27h, target 13+
4 AC, AQH and AS (NRJ Global)
5 AC NRJ GROUP (NRJ GLOBAL): 12,142,000 listeners
6 Change in AS April-June 2015 vs. April-June 2014 7 Change in AS (audience share) April-June 2015 vs. Jan-March 2015
8 AQH and AS
9 OJD, global internet radio broadcasts, ad hoc ranking of radio groups and networks with the highest digital listening figures in France, NRJ GROUP (44,750,336 active listens of which 80% in France, i.e. 35,800,269), NRJ (31,227,154 actives listens 30+ including 83% in France, i.e. 25,918,538), Chérie FM (5,884,594 active listens 30+ of which 73% in France, i.e. 4,295,754), June 2015
10 OJD, global ranking, June 2015, based on measured brands, including radio brands, total mobile and tablet visits ranking, NRJ: 9,961,955 visits
11 OJD, mobile apps rankings, based on measured radio brands, leader ranking by number of unique visitors and visits, June 2015
Revenue was up 9.7% at €41.7 million, driven by a new growth boost in the 2nd quarter (+8.8% in Q1 2015 and +10.5% in Q2 2015). This performance can be attributed to an increase in advertising revenue from each of the three channels (NRJ 12, CHERIE 25 and NRJ HITS).
Since the new editorial project was introduced in early 2015, the cumulative audience share of the two free channels NRJ 12 and CHERIE 25 grew by almost 37%12 to 2.6% in June 2015. These results confirm the pertinence of the editorial strategy and are in line with the 3-year plan which aims to restimulate audience numbers and achieve profitability for the sector in 2017. Circulation of the new NRJ 12 program schedule, planned for September, should further increase audience numbers.
For its part, NRJ HITS, the top cable-satellite-ADSL music channel also registered further increases in audience numbers with an average of 5.2 million television viewers per month13, thus widening its lead on its immediate competitor 14 (+258%).
In terms of current operating profit it recorded a loss of €16.3 million (compared with a loss of €14.3 million in H1 2014). As anticipated, the Television division continued to make a loss due to increased schedule costs and the full impact on revenue is expected to be felt in 2016.
Revenue was €16.7 million (-1.8% excluding Finland15), marked by a fall in sales in the German-speaking market (-4.2%), while the French-speaking market continued to perform well (+4.8%). The division continued to develop its licensing activities including the launch of the NRJ brand in Latvia.
Thanks to continued cost control, healthy performance from France (current operating profit : +7.7%) and brand licensing (current operating profit : +16.7%), current operating profit remained high at €5.1 million, up 2.0%.
Revenue fell by 27.3% to €1.6 million, affected in particular by sales slowing down in the musical label in a difficult market. Current operating profit was €0.8 million, i.e. up €0.3 million.
Revenue was up 8.2% at €31.8 million (including 4.4% organic growth). In the 1st half-year 2015, the €1.1 million contribution from the radio broadcasting activities of the Lagardère Group (acquired in June 2014) more than compensated for the negative impact of the new pricing conditions applied to contracts renewed on the TNT market. This strong performance can also be attributed to the positive impact of the new TNT broadcasting contracts signed during 2014.
Current operating profit fell 9.9% to €9.1 million. The main reasons for this were an unfavorable base effect linked to a €1.1 million non-recurrent item in H1 2014 (cf. 2014 annual results press release), an increase in costs principally due to the suspension of phases 12 and 13 of the TNT HD roll-out in France and falling prices which eroded the margin.
EBITDA16 was €16.2 million in H1 2015, up 6.6% on H1 2014.
12 Médiamétrie, Médiamat, NRJ12+Chérie 25 cumulative audience share, target 4+, June 2015 vs December 2014
Source: Médiamétrie, Médiamat, Thématik, CA, full Wave 29, 4+, Mon-Sun, 3h-27h
13 Over four weeks viewing threshold 10 consecutive seconds
14 Extrapolated average rate
15 Performance calculated on a comparable basis (i.e. H1 2014 restated to take account of Finland revenue which has been posted to "Other income" since 11/01/2014)
16 Current operating profit excluding dissimilar barters before amortization and depreciation
NRJ Group confirms that, in 2015, it aims to pursue the transformation which began at the end of 2014. The Group's prime aim is to increase its Radio and Television audiences in order to improve revenue and profitability. Financial year 2015 will be marked by the roll-out of new editorial programs in Television and an increase in the operating resources made available to its MME and Television divisions.
Broken down by activity:
This strategy's positive impact on the Group's results will be felt fully from 2016 (anticipated rise in revenue and operating profit). The Group also reconfirms its objective to return the Television division's operations to break-even in 2017.
Next meetings: Publication of 3rd quarter 2015 financial information on November 5, 2015 (after market).
The summary consolidated accounts for the 1st half-year 2015 were approved by the Board of Directors at their meeting on July 28, 2015. A limited audit has been carried out on the summary consolidated accounts. The Statutory Auditors' report will be issued once all formalities required to file the half-year financial report have been completed.
The 2015 half-year financial report will be available on the Group's website www.nrjgroup.fr by July 31, 2015 at the latest.
Some of the information contained in this report may be provisional. This information reflects either trends or objectives and cannot be taken as a forecast of results or any other performance indicator. By its very nature, this type of information is subject to risks and uncertainties which may, in certain cases, be beyond the Company's control. More details on these risks and uncertainties can be found in the Company's Registration Document which is available on its website (www.nrjgroup.fr) under the tab "Finances & Shareholders".
NRJ GROUP is one of the leading French private media groups and an international player present in 15 other countries, either directly or under licensing agreements with the NRJ/ENERGY brand, the number one international radio brand, and/or NOSTALGIE/NOSTALGIA. In France, the Group is the private radio market leader and one of the new players on the television market. The Group is also a significant player on the radio broadcasting market, through its subsidiary towerCast, number two on the French broadcasting market. NRJ GROUP is a publisher, producer and broadcaster, and markets its own media spaces. For several years, it has been supported by the strength of its radio media and its NRJ, NOSTALGIE, CHERIE FM and RIRE & CHANSONS brands, as well as its marketing expertise and commercial power for deploying new media, particularly in the Television division, or new ways to access its media, principally the internet, and related activities around partnerships in order to follow and anticipate consumer developments, while offering a wider range of advertising services for its clients.
NRG GROUP shares are listed on the Euronext in Paris (compartment B). Codes - ISIN: FR00012169; Reuters: SONO.PA; Bloomberg: NRG FP.
NRJ GROUP – Communication Financière [Financial Communications], 46-50 avenue Théophile Gautier 75016 Paris Célia d'Everlange/Tel: + 33 1 40 71 78 05/e-mail: [email protected] www.nrjgroup.fr
NRJ GROUP, A public limited company with capital of €784,178.46 Head office: 22 rue Boileau 75 016 Paris 332 036 128 RCS PARIS
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