Weakened Ad Market Hits RTL Group Results

RTL Group’s revenues in the first half of this year were down 5.1 percent to €3.1 billion ($3.4 billion) as a result of a challenging ad market, particularly in Germany.

Adjusted EBITA halved to €250 million ($273.4 billion), while group profit was down 57 percent to €132 million ($144.4 million).

TV advertising revenues were down 12.5 percent to €1.2 billion ($1.3 billion); the results were 15.5 percent lower than pre-Covid levels in 2019.

For the first half, Fremantle delivered revenues of €1 billion, a 2.4 percent year-on-year gain.

The European media giant also saw gains in its streaming services, with subscribers to RTL+ and Videoland up 34.1 percent to 6 million and revenues up almost 17 percent to €152 million ($166.3 million). RTL+ had 4.5 million subs as of the end of the first half, with Videoland at 1.3 million.

CEO Thomas Rabe noted: “The market environment in the first half of 2023 was particularly challenging, with geopolitical and macroeconomic uncertainties in addition to the long-term structural shifts in video viewing. The RTL Group team remains focused on bringing our strategy to life: strengthening our core business, growing our streaming and content businesses, and building alliances and partnerships. Based on our strong balance sheet, we are investing into business transformation through the cycle—in premium content, leading national streaming services and in advertising technology.

“Technology plays a key role in our transformation, and we see great opportunities from AI, in particular to increase efficiency and generate content. Today, we already apply AI at scale in advertising planning and have started to support content creation with generative AI.

“We are convinced that investing through the cycle will put us in a strong competitive position when the advertising markets recover. The half-year results came in broadly in line with our expectations. Although we are seeing first signs of market stabilization in Germany in particular, we have adjusted our outlook for the full year 2023.”

For the full year, RTL Group is projecting revenues of €7 billion, down from the previous forecast of between €7.3 billion and €7.4 billion. It is maintaining its 10 million streaming subscriber target for 2026, with a goal of delivering streaming revenues of €1 billion. It is also maintaining its outlook for Fremantle, with a target of €3 billion in revenues in 2025.