Outlook

RTL Group is reverting back to guidance on EBITA in its outlook statement. The Group believes this will provide a better operational KPI than continuing to use EBITDA. The Group notes that the analyst community continues to use EBITA – some on an exclusive basis – as the main KPI for the Group’s profitability. Reverting back to EBITA will therefore align the Group’s guidance to the expectations of the investment community. In addition, the Groups EBITDA will be affected by the new IFRS 16 (Leases) standard from 2019 onwards. Both EBITDA and EBITA will continue to be reported on for the Group’s business segments. As outlook guidance will revert back to EBITA, RTL Group will also comment primarily on EBITA as the KPI for operating profit in 2019.

Revenue

Given the current economic climate RTL Group expects 2019 to be another challenging year for TV advertising. Accordingly, RTL Group expects an overall stable, to slightly negative, growth for the Group’s TV businesses.

Fremantle, the Group’s content division, continues to benefit from the drama pipeline which contains a number of new and second season commissions. Accordingly, RTL Group expects Fremantle’s organic revenue to grow between 10 and 12 per cent on a constant currency basis (previously: organic revenue growth of 4 to 7 per cent) and its EBITA to increase.

The Group’s digital revenue is expected to grow by around 10 per cent in 2019.

In summary, RTL Group expects its total revenue for the fiscal year 2019 to grow moderately (+2.5 per cent to +5.0 per cent) excluding foreign exchange rate effects, driven by the Group’s digital businesses and Fremantle.

 

Leverage ratio, cash conversion, dividend

RTL Group will continue to target a leverage ratio of between 0.5 and 1.0 times net debt to full-year EBITDA.

The company will continue to focus on EBITA cash conversion, and targets levels not below 85 to 90 per cent.

At its meeting in August 2019 the Board of Directors of RTL Group decided to amend the Group’s dividend pay-out policy. The new policy targets a pay-out of at least 80 per cent of the Group’s adjusted full-year net result with the dividend to be paid out following the AGM. The Group no longer plans on paying out an interim dividend


EBITA

The Group’s profitability, as measured in EBITA, will be impacted by investments in programming, VOD services and restructuring costs. For example, Mediengruppe RTL Deutschland will air ten football matches of the German national team this year – eight qualifying games and two friendlies (2018: total of two matches). Fremantle’s EBITA is expected to increase in 2019, on the back of the drama successes and lower development costs.

Overall RTL Group currently expects the Group’s EBITA for 2019, before restructuring costs, to be moderately down, i.e. to be within a range of €1.11 billion and €1.14 billion compared to 2018.

Outlook RTL Group

In million €

2018

2019e

Outlook

% change

Revenue

6,505

6,668 to 6,830

Moderately up (excluding FX effects)

+2.5 to +5.0

EBITA

1,171

1,112 to 1,142

Moderately down

(before restructuring costs)

 

-2.5 to -5.0

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