MUNICH/FRANKFURT (Reuters) - ProSiebenSat.1 Media SE (PSMGn.DE) will reorganize into three divisions spanning entertainment, content production and commerce as the German media group scaled back expectations for mid-term growth on Wednesday.
In one key change, ProSieben will from the start of next year fold its digital entertainment operations into its commercial TV unit where a string of outlook downgrades has hammered its shares in recent months.
“With the three-pillar strategy, we are setting ProSiebenSat.1 up competitively for the future,” said CEO Thomas Ebeling, who has announced he will stand down in February. No successor has yet been named.
Ahead of a presentation to investors later on Wednesday, ProSieben forecast medium-term revenue growth in the mid-single-figure percentage range, down from an average growth rate of 11 percent from 2011 through to the end of the third quarter.
Growth would be primarily organic, adding more than 1 billion euros ($1.2 billion) in revenues by 2022 compared with the current year, the company said.
Core margins would be in the mid-20s, representing a decline on profitability compared to recent years. ProSieben reiterated its outlook for 2017 and said it would maintain its policy of paying out 80-90 percent of earnings as dividends.
By combining its advertising-driven TV operations with its loss-making Maxdome video-on-demand service, ProSieben said it hopes to achieve savings of 50 million euros by 2019-20.
The company confirmed it was in talks on seeking a minority investor for its Commerce business, to be named the NCG - NUCOM GROUP, and said these should conclude in the second quarter of 2018.
It was also seeking a further expansion of its Content Production and Global Sales division, to be named Red Arrow Studios, through cooperation with and co-investments by partners.
As part of its restructuring, ProSieben will shift its Studio 71 operation, which makes videos for online outlets like Youtube, into the traditional production division.
Reporting by Douglas Busvine and Joern Poltz; Editing by Ludwig Burger and Keith Weir