November 7, 2019 / 7:26 AM / 3 months ago

UPDATE 1-ProSieben keeps guidance even as decline in core TV ads gathers pace

(Adds detail, CEO comment)

BERLIN, Nov 7 (Reuters) - German broadcaster ProSiebenSat.1 Media on Thursday maintained its guidance for the full year even though third-quarter core profits fell by 35% as a decline at its core television advertising business accelerated.

CEO Max Conze is trying to pivot away from linear TV, where revenue declined by 6%, to growth areas spanning content production, e-commerce and digital advertising that grew by 13% in the quarter. Linear TV broadcasts scheduled programmes over the air or through satellite or cable unlike on-demand streaming services.

“We continue to make good progress and consistently drive ProSiebenSat.1’s transformation,” Conze said in a statement that highlighted a worsening macroeconomic environment and weaker TV advertising market.

Although the new business areas now account for 56% of revenue, they aren’t as profitable as commercial TV.

Overall, revenue grew by 4% in the quarter to 926 million euros ($1.02 billion) while earnings before interest, taxation, depreciation and amortization (EBITDA) fell 35% to 122 million euros. Net profits slumped by 74%.

Conze stood by his guidance for EBITDA margins of 22%-25% for the year as a whole, but cautioned that this would depend on the macroeconomic environment and advertising market in the fourth quarter.

The margin narrowed to 14.2% in the seasonally quiet third quarter. The fourth quarter is the most important for commercial TV as consumers spend more before Christmas.

ProSieben said that Joyn, its streaming joint venture with Discovery Inc launched in June, now had 5 million monthly active users. It plans to launch a premium version this winter. ($1 = 0.9042 euros) (Reporting by Douglas Busvine; Editing by Michelle Martin and Emelia Sithole-Matarise)

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