RTL Group Sees Ad Rebound, Streaming Gains

While year-on-year revenues were down 9.5 percent, RTL Group reported a rebound in television advertising in the second half of 2020.

Total revenues at the group fell to €6.02 billion ($7.2 billion), mainly due to a fall in TV advertising in Q2 and lower content production revenues as a result of Covid-19. Profit for the year was down 27.7 percent to €625 million ($745 million).

In the second half, TV advertising revenues inched up slightly by 0.8 percent, and in Q4 they were up 2.8 percent. The company also delivered streaming revenue gains, which were up 20.6 percent to €170 million ($203 million), with paying subs at TV Now up to 1.3 million and Videoland up to 903,000 subs.

Looking ahead, RTL Group aims to grow its total number of paying subscribers in Germany and the Netherlands to between 5 million and 7 million—from 2.2 million in 2020—setting a target of €500 million in revenues in 2025. To reach these goals, the group will expand the annual content spend for TV Now and Videoland to €350 million ($417 million) in 2025, up from €117 million ($140 million) last year.

“2020 was a year of both unprecedented challenge and major achievements for RTL Group,” said CEO Thomas Rabe. “We managed to strike the right balance between implementing cost and cash flow countermeasures, maintaining our market positions and investing in the future of our businesses, in particular in streaming and advertising technology. This is reflected in a net profit of €625 million, an operating cash conversion rate of more than 100 percent, audience outperformance of our commercial competitors and rapid growth in numbers of paying subscribers for our streaming services.”

Rabe continued, “Over the past six months, we sold non-core businesses, unlocking significant shareholder value. We continue to strengthen our portfolio with the full acquisitions of Super RTL in Germany and RTL Belgium. And we entered into new partnerships, for example with Deutsche Telekom to grow our streaming business in Germany and to cooperate in advertising technology, advertising sales and content. As stated on 29 January 2021, there is a strong case for consolidation in the European broadcasting industry. We are currently reviewing such options for our controlling stake in the French broadcaster Groupe M6, with a view to creating value for our shareholders. There can be no certainty that this may lead to any type of agreement or transaction.”