Business Headlines

Core business outperforming peers

·        Audience and advertising share up in Germany, France, UK and Hungary

·        Continued investment in content brings ratings and FremantleMedia sales success e.g. – Pop Idol (under discussion for sales to several new territories),Veto, and La Gym des Neurones   

·        French radio business bounces back, gaining audience share and consolidating market leading position

Portfolio enhanced

·        Creation of Sportfive, Europe’s leading sports rights and marketing business, through merger with Groupe Jean Claude Darmon and Sports +

·        Portfolio review leads to disposal of non core and underperforming assets: RTL 7 Poland, Swedish and UK radio  

·        Restructuring of North American production and syndication businesses completed

Improved efficiency

·        Significant cost saving measures implemented

·        New management structure created

Robust financials

·        Proposed dividend EUR 0.5 per share (2000 : EUR 0.85 per share) represents pay out ratio of 42%, sustainable dividend policy to pay out 35-50% of earnings   

·        Ratio of EBITA to operating cash flow conversion over 100%, working capital management improved

·        2001 year end net debt EUR 645 million, down  from EUR 681 million year end 2000 

Didier Bellens, Chief Executive Officer (CEO) of RTL Group, said: “RTL Group has continued to outperform. By investing in quality programming and format development we have won both audience and advertising market share in our main markets.

This growth is being achieved within our overall cost control policy. We have implemented a series of cost control measures and are actively exploring further saving opportunities.  The operating portfolio review undertaken by the Group in 2001 will be continued in 2002.

Whilst the outlook for advertising markets remains tough, we believe our strategy of investment will bring enhanced revenues and margins when markets stabilise.

The payment of a 2001 dividend of EUR 0.5 per share demonstrates the confidence of the Board in the Group’s future prospects.”

A meeting will be held for analysts and investors at 09:30h London time on Monday, March 04, 2002, at FremantleMedia (formerly Pearson Television), Stephen Street, London W1. This meeting will be webcast live and can be accessed through RTL Group’s website, www.rtlgroup.com, and Finsbury’s website, www.finsbury.com. 

Enquiries:

Financial review

RTL Group’s revenues held up well in a market that has recorded the steepest declines in advertising revenue for ten years. The group’s biggest division, television, reported revenue of EUR 2,866 million compared to EUR 2,862 million in 2000, reflecting RTL Group’s success in winning advertising share from rivals in its key markets.

RTL Group’s content and new media divisions increased revenues over the full year period by 5.3% and 139% respectively. This helped offset a decline in revenue from the radio businesses of 12.7%.    

Underlying revenue growth for RTL Group, stripping out the effects of portfolio changes (mainly M6 and Talkback), was minus 2.3%.

Adjusted EBITA decreased to EUR 361 million from EUR 555 million resulting in a fall in the EBITA margin to 8.9% from 13.7% in 2000. Reported EBITA was EUR 276 million compared to EUR 555 million in 2000.

RTL Group’s operating costs, excluding goodwill amortisation and impairment, increased 7.0% to EUR 3,878 million from EUR 3,623 million in 2000. This was due to scope changes, increased investment in New Media and RTL Shop and restructuring costs.  Stripping out these effects, costs increased by less than 1%.

RTL Group’s television revenue remained relatively flat year on year at EUR 2,866 million in 2001 compared to EUR 2,862 million in 2000. This reflects the strength of RTL Group’s television stations, brands, and leading market positions which enabled RTL Group’s channels to gain audience and advertising share across its key markets.

Television EBITA declined to EUR 297 million, from EUR 408 million in 2000 reflecting increased spending on programming at Channel 5 and M6, non-recurring costs, and investment in RTL Shop. 

Content revenues were up 5.3% over the year to EUR 1,148 million from EUR 1,090 million in 2000. Underlying revenue grew by 6.8%.  EBITA in the content division fell to EUR 48 million, down from EUR 126 million in 2000, primarily due to restructuring at FremantleMedia and the impact of the withdrawal and cancellation of American TV movies and drama series.

Within the radio division RTL Radio remains France’s number one station with an audience share of 13.3%. This continued improvement in performance is thanks to the new management team and the return to the station of popular formats and presenters.

RTL Group’s radio revenue declined by 12.7% to EUR 213 million in the course of the year, down from EUR 244 million in 2000, and EBITA fell to EUR 26 from EUR 75 million. This fall was due primarily to a weaker advertising market in our core market of France and lower audience shares at RTL Radio.

RTL Group continued to build on its strong position in European new media over the year, establishing itself as one of the most successful online players in European broadcasting.

Thanks to successful e-commerce driven merchandising, revenue increased to EUR 91 million up from EUR 38 million in 2000. The division reported limited start-up losses of EUR 55 million, up from EUR 37 million the previous year.

The gain or loss from sale of subsidiaries, joint ventures and other investments was EUR 228 million. This related primarily to the contribution from UFA Sports to Sportfive, the sale of Premiere and the disposal of RTL 7. 

RTL Group’s tax expense decreased to EUR 67 million from EUR 218 million in 2000, due principally to lower corporate taxes in Germany. The effective tax rate was 35% against 42% in 2000.   

Net interest expense in 2001 was EUR 33 million.  The consolidated net debt position at 31 December 2001 was EUR 645 million down from EUR 681 million at the year-end 2000.

Net profit for the full year before goodwill impairment was EUR 63 million compared to EUR 67 million in 2000. Net loss, after the goodwill impairment of EUR 2,562 million relating to FremantleMedia and Antena 3, was EUR 2,499 million.

Earnings per share were EUR –16.3 (2000: EUR 0.43) and adjusted earnings per share were EUR 0.90 (2000: EUR 1.91). The proposed final dividend is EUR 0.50 per share compared to EUR 0.85 in 2000.

RTL Group’s review of its asset portfolio resulted in the disposal or closure of several non-core or underperforming businesses. In January 2001 RTL Group completed its exit from German Pay-TV platform Premiere with the sale of its remaining 5% stake and in December RTL Group announced the disposal of its Polish television operation RTL 7.

Another important portfolio changes during 2001 was the creation of Europe’s leading sports rights and marketing group, Sportfive. The deal brings together the RTL Group’s sports interests UFA Sports, Sports +, the sports rights trading subsidiary of Canal+ Group, and Groupe Jean-Claude Darmon, in which RTL Group already owned a 28% stake.    

RTL Group announced at its interim results in September a one-off goodwill impairment adjustment of EUR 2,276 million relating to the assets of FremantleMedia.  Total goodwill impairment charges for the full year are EUR 2,562 million reflecting a review of the carrying value of RTL Group’s stake in Antena 3.

Television