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RTL sees German TV ad growth, takes share from Pro7
August 30, 2017 / 8:33 AM / 24 days ago

RTL sees German TV ad growth, takes share from Pro7

FRANKFURT/BERLIN (Reuters) - European broadcast group RTL (RRTL.DE) expects its German TV advertising revenue to grow this year as it wins market share from struggling rival ProSiebenSat.1 (PSMGn.DE).

RTL, controlled by media group Bertelsmann (BTGGg.F), increased its audience share in Germany to 29.1 percent, widening its lead over ProSieben which has 24.3 percent and allowing it to charge premium prices for ad slots.

“On the current booking dynamics we see for September, we believe that our Q3 German TV advertising revenues will be around plus 3 percent,” co-Chief Executive Guillaume de Posch told Reuters in a telephone interview. He sees growth of around 1 percent for the year in Germany.

“The only reason we’ve been outperforming is audience performance,” he later told analysts.

German audience growth was driven by entertainment channel Vox, whose hit shows include “Tierbabys” - a documentary series about baby animals.

RTL’s report of a 9 percent rise in second-quarter sales and 4 percent increase in adjusted core profit came a day after ProSieben cut its TV ad market outlook for a third time this year, sending its shares to a four-year low.

Media groups including Britain’s WPP (WPP.L) have warned in recent weeks of a slowdown in advertising spending by consumer-goods groups such as Unilever (ULVR.L), Nestle (NESN.S) and Procter & Gamble (PG.N) - the world’s biggest advertisers - as they respond to weak global economic growth.

Shares in RTL, which had lost more than 5 percent of their value on Tuesday, traded 3.4 percent higher by 0941 GMT and were one of the leaders in the German mid-cap index .MDAXI.

SPREADING ITS WINGS

RTL said all the European TV ad markets in which it is active shrank during the first half of the year, showing it is not immune to the pressures facing rivals.

In the face of weak TV markets, which account for about half of its revenue, RTL said it would accelerate efforts to expand other businesses such as advertising technology.

It said it would take full ownership of online ad-serving platform SpotX for $145 million and make other investments in the area.

RTL said it expected its Groupe M6 to outperform the French TV advertising market this year but said it continued to struggle in the Netherlands, where is it losing share to Netflix (NFLX.O) and trying to resist an advertising price war.

Second-quarter revenue rose to 1.57 billion euros (1.45 billion pounds), helped by its FremantleMedia content arm whose shows include American Idol, and beating the average forecast of 1.54 billion euros in a Reuters poll.

“RTL have confirmed their Group FY revenue and EBITDA guidance which should come as a relief this morning,” wrote Jefferies analyst Tamsin Garrity, who rates RTL “buy”.

Earnings before interest, tax, depreciation and amortisation (EBITDA) rose 4 percent, adjusted for a one-off gain a year ago, to 362 million euros, in line with the poll average.

RTL also confirmed it would pay an interim dividend of 1 euro per share in September.

Reporting by Georgina Prodhan; Editing by Maria Sheahan/Keith Weir

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