ProSiebenSat.1’s third-quarter profit was down, though revenues were up, with Red Arrow Studios contributing healthy Q3 gains.
Net income attributable to shareholders decreased to 34 million euros ($37.6 million) from last year’s 126 million euros ($139.2 million). Revenues increased by 4 percent to 926 million euros ($1 billion)—56 percent of revenues are non-TV core advertising business that grew by 13 percent, while TV core advertising revenues decline by 6 percent.
The content production and global sales segment (Red Arrow Studios) continued its “dynamic, double-digit growth,” the company said. External revenues were up by 21 percent. Red Arrow Studios’ production business contributed to this—the formats The Weekly, Married at First Sight and A League of Their Own had a positive effect.
In the entertainment segment, the group accelerated the development of its digital and smart advertising business, which saw revenues grow by 37 percent. This was driven, in part, by the launch of the digital, advertising-financed streaming platform Joyn. This business area helped to compensate for some of the decline in TV core advertising revenues, reflecting the “weakening macroeconomic environment” and the corresponding development in the TV advertising market. Overall, external revenues in the entertainment segment declined by 4 percent.
The commerce business with NuCom Group saw external revenues rise by 13 percent.
Max Conze, CEO of ProSiebenSat.1 Media, said: “We continue to make good progress and consistently drive ProSiebenSat.1’s transformation. Despite the increasingly difficult macroeconomic environment and a, therefore, weaker TV advertising market, our revenues increased by 4 percent in the third quarter. 56 percent of our revenues are now generated from non-TV core advertising business—and growing by 13 percent in the third quarter. This was driven by growth of 37 percent in the digital and smart advertising business and continuing double-digit growth rates at Red Arrow Studios and NuCom Group. We demonstrated once again that our decision to invest in a digital and diversified future was the right one: Our streaming platform Joyn is continuously gaining new users, and the premium version will be launching this winter. At NuCom Group, the online-beauty provider Flaconi boasts very dynamic growth of 59 percent in the third quarter, while our focus on local content is becoming increasingly effective. In the first nine months of the year, we are clearly ahead of the audience shares of the previous year, and a strong portfolio of fiction and entertainment formats, such as Schattenmoor, Dancing on Ice and Queen of Drags, is coming up in the next months. In a weakening and less predictable environment, it is all the more important to continue investing in the future of the company.”
Rainer Beaujean, CFO of ProSiebenSat.1 Media, added: “Visibility in the TV advertising market is extremely low, and we have seen in the past years that significant sales volatility is possible in the fourth quarter. Moreover, macroeconomic uncertainties are increasing. As such, we believe it is prudent to highlight the financial impact of a potential negative scenario. Despite the uncertainty, we will nevertheless continue to act in a sustainable and long-term manner and have consciously decided to keep investing in NuCom Group and the entertainment business thus actively shaping ProSiebenSat.1’s future.”