Profit Dips at RTL Group

Reporting improved ad revenues in its key markets of Germany, France and the Netherlands, RTL Group said overall Q1 revenues were stable at 1.4 billion euros ($1.7 billion), while profit was down 19 percent to 111 million euros ($131 million).

“During the first quarter of 2018, we generated higher TV advertising revenue in our key markets of Germany, France and the Netherlands,” said CEO Bert Habets. “However, this good revenue growth was offset by negative exchange rate effects. Our profitability remains at a high level, and with the strong operating performance of our major business units, we are in a very good position to write the next chapter in RTL Group’s success story.”

Habets continued, “As we have said before, the first quarter is not necessarily an indicator for the full year—in particular in years with major sporting events such as the upcoming football World Cup. Thus, we will keep a close eye on seasonal swings in advertising spend and expect 2018 to be more back-end loaded than the prior years.”

Habets noted that the company will increase its investments in VOD services “with a clear focus on local, exclusive content, and gradually adopt a hybrid model—combining a free, advertising-financed service with a premium pay product.” This follows the launch of VOD services in Hungary, Croatia and Belgium in Q1. RTL Group’s digital revenues were up 6.7 percent to 190 million euros ($224 million) in Q1.

Higher ad revenues lifted Mediengruppe RTL Deutschland’s EBITDA by 1.2 percent to 169 million euros ($199 million) on revenues of 534 million euros ($630 million). EBITDA at Groupe M6 was flat at 76 million euros ($90 million) on stable revenues of 360 million euros ($425 million). FremantleMedia’s EBITDA slipped to 13 million euros ($15 million) mainly due to lower profit contributions from FremantleMedia North America, on overall revenues of 271 million euros ($320 million). At RTL Nederland, EBITDA soared to 6 million euros ($7 million) on the back of strong ad gains, with revenues up almost 5 percent to 110 million euros ($130 million).

Television advertising accounted for just under 50 percent of RTL Group’s revenues in Q1, with 16.4 percent from content, 13.5 percent from digital, 5.8 percent from platforms and 4.1 percent from radio.