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Edited Transcript of 00007453.LU earnings conference call or presentation 28-Aug-19 7:30am GMT

Q2 2019 RTL Group SA Earnings Call

Aug 30, 2019 (Thomson StreetEvents) -- Edited Transcript of RTL Group SA earnings conference call or presentation Wednesday, August 28, 2019 at 7:30:00am GMT

TEXT version of Transcript

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Corporate Participants

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* Andrew Buckhurst

RTL Group SA - SVP of IR

* Elmar Heggen

RTL Group SA - Deputy CEO, COO & Executive Director

* Thomas Rabe

RTL Group SA - CEO & Director

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Conference Call Participants

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* Annick Tonie Maas

Exane BNP Paribas, Research Division - Analyst

* Christopher Johnen

HSBC, Research Division - Analyst

* Conor O'Shea

Kepler Cheuvreux, Research Division - Head of Media Sector

* Julien Roch

Barclays Bank PLC, Research Division - MD & European Media Analyst

* Laurence Davison

Deutsche Bank AG, Research Division - Research Analyst

* Patrick Schmidt

Warburg Research GmbH - Analyst

* Richard Eary

UBS Investment Bank, Research Division - Executive Director and Head of European Media Team

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Presentation

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Operator [1]

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Welcome to the analyst conference call for RTL Group regarding the presentation of the half year 2019 results. At our customer's request, this conference will be recorded. (Operator Instructions)

May I now hand you over to Andrew Buckhurst, who will review for this conference. Please, go ahead.

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Andrew Buckhurst, RTL Group SA - SVP of IR [2]

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Good morning, everyone, and thank you for joining this conference call for our results for the first half of 2019.

On Slide 2, you will find the agenda. We will start with the highlights and a quick summary of the financials followed by a review of our main business segments. We will end with an update in our strategy and outlook.

I'd like now to introduce our speakers for today, our CEO, Thomas Rabe; and the new group COO, Elmar Heggen.

I'll now hand over to Thomas who will begin today's presentation on Slide 3.

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Thomas Rabe, RTL Group SA - CEO & Director [3]

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Thank you, Andrew, and good morning, everyone. Before starting with the financial and operational review, I would like to briefly explain the new leadership structure that we announced this morning, and that is effective immediately.

After 13 years as group CFO, the Board of Directors has appointed Elmar Heggen to the new role of Chief Operating Officer. He will take responsibility for coordinating and further optimizing the operations across the group's international footprint.

Taking over as Chief Financial Officer is Björn Bauer. He joins from Bertelsmann where he's served several senior executive positions, most recently as Executive Vice President of Corporate Controlling and Strategy. Prior to that for a period of 3 years, he was the Chief Financial Officer of the U.S.-based online learning provider, Relias. He joins the Executive committee alongside Elmar and myself.

Elmar and Björn, congratulations, and I look forward to working with you on your new roles.

We have also established a new group management committee, in short GMC. The GMC is composed of the members of the executive committee and the CEOs of our 3 main business units, which are Oestrich, Germany and Fremantle. The GMC brings together massive experience and different perspectives. It will drive the strategic agenda of the group and foster cooperation.

Moving on to Slide 4. In the first half of 2019, RTL Group continued its successful business developments and to deliver on its Total Video strategy. Our leading market positions have resulted in operational results that are very solid: revenue, up; EBITA, broadly stable; net results, up; cash flow and cash conversion, up.

This means that the group is well positioned to continue to invest as we needed, to the current transformation cycle. The group's growth drivers, namely our digital and content businesses, which we reported very positive, a very positive development.

Beyond the financial results, we have strengthened our businesses with series of alliances and partnerships, some content creation, to advertising sales and advertising technology. I will come back to this later on in my presentation.

Moving on to the next slide, Slide 5. Revenue grew by 4.2%. Our best first half revenue growth since 2010. This leads to a record level of revenue for the first half year of RTL Group in its history. EBITA came in at EUR 538 million, which was broadly stable on last year. High investments in programming and video-on-demand services were largely compensated for the higher profits from Fremantle and Groupe M6. Overall, this resulted in an EBITA margin of 17%.

Gross profit for the period increased substantially to EUR 443 million, which reflects the EBITA performance and capital gains on portfolio. We'll come back to this later.

Slide 6. Looking at the group's overall revenue split, the share of TV ad revenue fell to 44.3% due to the growth of content and digital. Digital revenue amounted to EUR 513 million, which is up 21% year-on-year and now represents 16.2% of further revenues. Platform revenue was EUR 179 million or 5.6% of group's total revenue.

Digital revenue grew significantly despite these effects -- or the negative effects of scope changes and the winding down of StyleHaul. All the main categories of the group's digital revenue contributed to the growth with video-on-demand revenue up 27% and content revenue up 89%.

Moving on to the next slide, on Slide 7. We have given you an update on the KPIs that we announced in March of this year. As you can see, the growth drivers, namely video-on-demand content and digital, are intact. The number of paying on-demand subscribers for German and Dutch services increased by 46% to just over 1.2 million as at 30th of June. Fremantle's revenue was up 23% with drama now accounting for 20% of revenue.

Revenue growth was boosted by the sale of Season 2 of American Gods and arranged Amazon and Netflix, respectively.

On digital, the overall MPN revenue growth was rather low, reflecting the wind-down of StyleHaul. But our largest asset, BroadbandTV, achieved solid growth of close to 30%.

Our ad-tech business reported revenue growth of 40% on the back of growing media spend and OTT in the U.S.

With that, I will now hand over to Elmar, who will walk you through the financials in more detail.

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Elmar Heggen, RTL Group SA - Deputy CEO, COO & Executive Director [4]

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Thank you, Thomas, and good morning from me as well in what would be my last formal presentation in my role of CFO for the financial community.

Turning now to the financial review starting on Slide 9. As mentioned earlier by Thomas, revenue rose 4.2% to EUR 3.173 billion. The group's organic revenue growth, which adjusted for the scope changes in ForEx, was up 4.6%. The group's cost base rose 5.6% and was largely due an increase in the cost of that program both the sports right and programming costs linked to the growth of Fremantle's top line.

This results in an EBITA of EUR 538 million for the first 6 months of 2019 and a margin of 17%. The group's net debt at the end of the period was EUR 739 million.

Moving now on to Slide #10. The net profit for RTL group shareholders for the period was up almost 24% at EUR 393 million. From a solid EBITA result, the net profit has been boosted by the gains generated from the number of disposals, the largest being Universum Film to KKR at the beginning of this year. The lower tax charge reflects the higher profit and loss commission, the recognition of new tax losses in the U.S. and the new deferred tax assets. All elements are of the similar absolute amount.

The group's strong net results translate into earnings per share of EUR 2.56.

Let's now move on to cash flow on Slide 11. Net cash from operating activities increased to EUR 354 million for the first half of 2019 with an income tax paid at EUR 255 million. Overall, reported free cash flow increased to EUR 513 million, resulting in a significantly higher cash conversion ratio of 95%, up 18 percentage points on the same period last year.

I will now hand you back to Thomas for the business review.

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Thomas Rabe, RTL Group SA - CEO & Director [5]

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Yes. Let's go to Slide 13. We'll start with the business review of the Mediengruppe RTL Deutschland. Our family of channels reported a knowledge share of 21 -- 28.1%, up 0.8 percentage points and therefore, remains the key market leader in Germany. RTL Television is the only challenger, and it was a double-digit audience share in its target group. Its audience share was up 0.3 percentage point to 11%.

The net TV advertising market is estimated to have decreased by approximately 4% to 4.5% with meaningful RTL asset outperforming the market by around 2 percentage points. Accordingly, overall revenue fell only slightly by 1.4% to $1.079 billion. The EBITA performance reflects the increase program spend, mostly sports-related and video-on-demand investments. It's clearly signaled at the beginning of the year, and accordingly, EBITA came in at EUR 330 million, down 9.1%. This results in a very healthy EBITA margin of 30.6%.

Mediengruppe's hybrid video-on-demand offer, TV Now, had a strong side in 2019 with a number of paying subscribers growing at 36% year-on-year while the average number of monthly video views amounted to 44.5 million, up 26% year-on-year.

The joint venture with ProSiebenSat. 1 called "d-force" was announced and on 5th of August received regulatory approvals. It will help drive growth in the addressable TV marketplace, which worked incredibly well as announced by Sky recently with higher engagement and increased spontaneous ad recall and halving of channel switching. And when combined with linear, addressable TV advertising increased ad awareness by nearly 1/4.

Moving on to M6 on Slide 14. As you're aware, Groupe M6 reported its results at the end of July and advertising market estimated to be stable. Groupe M6's advertising revenue grew by 2.3%. Overall, reported revenue was EUR 715 million compared to EUR 739 million for 2018.

Adjusting for scope changes following the sale in 2018 of the football club and MonAlbumPhoto, revenue was up 3% year-on-year. EBITA came in at EUR 150 million with the year-on-year command performance helped by the one-off costs recorded at the level of Girondins de Bordeaux football club during the first half of 2018.

Audience shares reached 21.1% for the family, which was stable year-on-year.

In July, we since received regulatory approval for the acquisition of Gulli, the leader in kids TV and a highly complementary addition to our family of channels.

And finally, mid of August, the regulatory approval was received for the Salto project with the commercial offer due to launch in the first quarter of 2020. And since then, we'll come back to this later, we'll provide the technical platform for Salto.

Moving on to Slide 15, RTL Nederland. The combined audience share was down at 29.9%, mainly as a result of weaker performance from our main channel, RTL 4. The television advertising market in the Netherlands was estimated to be up by 1.7% so far in 2019. RTL Nederland's lower ad revenue reflects the weaker audience performance with overall revenue decreasing by 2.1% to EUR 236 million. A strong subscriber growth of 58% and hence revenue performance such as Videoland, which is the video-on-demand service, have offset a large part of the advertising revenue decrease. EBITA came in at EUR 18 million.

Let's move on to Slide 16 on Fremantle. Revenue increased strongly by 23.2% to EUR 828 million. As you can see in the revenue bridge, this was primarily driven by strong organic growth amounting to EUR 128 million, of which EUR 49 million came from digital.

Growth was driven by the sale of the second season of American Gods and strong performance with nearly all of Fremantle's territories. EBITA was accordingly up at EUR 52 million resulting in an EBITA margin of 6.3%.

Turning now to Slide 18 and the start of a shorter strategy update. First point, alliance with partnerships, collaboration and cooperation will be a key theme for the group over the coming years. We believe that with our pan-European broadcasting footprint, content and digital expertise, we're well positioned to actively shape the future of the media landscape and much has already been done.

Let me provide you with 3 examples. Our advertising alliance in Germany will expand significantly by representing the digital media asset of Axel Springer and Funke Mediengruppe. Ad alliance in Germany reaches 99% of German households.

Second example, we entered into a sales representation agreement in the Netherlands where we acquired BrandDeli and in Belgium where our sales will start acting on behalf of TF1.

And on the content side, we announced the creation of the format creation group, which is a RTL setup and funded by our large broadcasters. And the group will develop innovative formats with intellectual property, fully owned and controlled by RTL Group.

The U.S. will focus on fashion entertainment formats and reality shows.

Moving on to Slide 19. As I mentioned earlier, the rollout of the group's video-on-demand activities is one of our top priorities. It is also an area where we can leverage the group's scale and knowhow on the technology front and creatively to programming.

On the tech front, we have taken a very recent decision to move forward and steps with the objectives to form one common fully integrated tech platform. This is based on the M6's technology and is currently or will be shortly used for Salto and in multiple territories across the RTL footprint.

On the creative side, the number of exclusive titles for video-on-demand offers continues to grow with 48 programs exclusively on our TV Now and video-on-demand platforms.

Moving on to the next slide, 20. A quick word on the group's ad-tech business. As you might have seen this morning, we announced a strategic review of our ad-tech business, SpotX.

Mediengruppe RTL Deutschland will take over responsibility for the European operations excluding the U.K. under the brand Smartclip. Smartclip's objective is to create an open advertising technology development unit based on the technology developed by them and used by RTL Germany and to tailor this to the needs of European broadcasters and streaming services. At the same time, RTL Group has started reviewing strategic partnership options with the SpotX global business.

SpotX level is positioned as the leading platform to monetize digital video, including premium video-on-demand and live TV streamed on any Internet Connected TV device. It will continue to operate on a global basis, bringing some of the world's largest media owners, device manufacturers, platform operators and publishers. This announcement further demonstrates our willingness to build partnerships both European and international level and to share technology.

Moving on to priorities on Slide 21. Clearly, our first priority is operational performance and achieving the targets we find in our outlook statement, which I will comment in a second.

Secondly, we will build national streaming champions to benefit from the rise of nonlinear viewing. This will require us to invest in technology, marketing and exclusive content.

Thirdly, we'll accelerate the development of our own IP via Fremantle and our broadcasters.

Fourthly, we'll create Europe's leading ad-tech development unit to serve our and third-party broadcaster needs.

And on the last 2 priorities, we have continued to pursue internal and external collaboration and partnership options in the field of advertising sales, content creation, sourcing and in data and technology, and in particular, advertising and video-on-demand technology.

This brings us to the outlook statement. In terms of guidance, we update and confirm the outlook given in March and most recently on 16th of May 2019. We continue to expect the moderate revenue growth and the moderate EBITA decrease before restructuring costs.

Within our revenue guidance, we have increased Fremantle's organic revenue growth rate for 2019 to between 10% and 12% plus from 4% to 7%. We expect our revenue guidance to be achieved despite the impact of disposals of a number of businesses.

And lastly, following a review by -- with the Board of Directors, we have decided to simplify our dividend policy, which will be effective immediately. The dividend policy is based on the group's full year net results adjusted for any material noncash impact such as, for example, goodwill impairment. For clarity's sake, we will no longer be paying an interim dividend, and we'll reverse to the market standard of the term of a once a year dividend payment. The new dividend policy targets a payout ratio of at least 80% of the adjusted full year net result as defined. Payout ratio compares favorably with our larger competitors and demonstrates our faith in our businesses, but also our focus on organic growth going forward.

This concludes the formal section of the call. Thank you for listening to us, and we're now happy to take your questions.

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Questions and Answers

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Operator [1]

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(Operator Instructions) The first question is from Annick Maas, Exane BNP Paribas.

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Annick Tonie Maas, Exane BNP Paribas, Research Division - Analyst [2]

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My first question is with the group guidance reiterated by the Fremantle guidance improved, what is going to be worse than expected in the second half of this year? And also related to Fremantle, so the 10% to 12% guidance, that means that everything which is at risk of falling into next year would mean you would have 10% organic revenue growth.

My second one is if you could give us an indication of the ad market performance for Q3 so far.

And then, thirdly, if you could just confirm the leverage target remains unchanged despite the tweaked dividend policy.

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Thomas Rabe, RTL Group SA - CEO & Director [3]

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Elmar, do you want to comment on the leverage side of things?

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Elmar Heggen, RTL Group SA - Deputy CEO, COO & Executive Director [4]

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Yes. No, this will remain unchanged. We continue to strive for a net debt to EBITDA of between 0.5 and 1x. So the precision that we have added to dividend policy will not have any impact on our leverage target. And maybe briefly on Fremantle. Because Fremantle has already shown a growth north of 12% for the first 6 months, we've decided to upgrade our full year expectation from 4% to 7% to 10% to 12% because, otherwise, it would have meant that we expect almost negative growth for the second half, which we don't. But Fremantle as such, even though it has a weight of roughly 20% in the overall revenue mix, it won't change overall revenue guidance. So we continue to expect that for RTL Group, we will see revenue growth of between 2.5% and 5% for the full year of 2019.

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Thomas Rabe, RTL Group SA - CEO & Director [5]

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Yes. We're looking at the revenue guidance, and it's a composition of clearly Fremantle. And so digital are growing strongly. Fremantle, stronger than we expected. That's why we increased the outlook for Fremantle. What you've got to take into account as well are scope changes in the revenue outlook, in particular, the disposal of Universum Film and the wind-down of StyleHaul. So there's no weakening of other businesses. If you look at the revenue mix and contributions in the first half, it is simply right to say that broadcasting businesses have not grown, reflecting advertising and market conditions of broadcasting revenue, and advertising revenue has been down.

On the Q3, I mean, first thing to say, of course, Q3 is not the most important quarter now in our business. It's the smallest quarter based on the numbers, which we're seeing. There is a mixed picture. July was relatively strong in Germany. August was somewhat weaker. And frankly, the focus is now on the new season starting in September. And given that the market is frankly quite volatile and advertising bookings become more and more short term, it is difficult today to make a prediction for September. But as I said, the important thing for you is to know that we are confirming our outlook for the full year on the revenue and EBITA basis. We're confident to do this. We wouldn't be able to be confident on this without having some confidence in the performance of the advertising market in the second half of the year.

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Annick Tonie Maas, Exane BNP Paribas, Research Division - Analyst [6]

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Great. Can I just ask one more question, sorry?

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Thomas Rabe, RTL Group SA - CEO & Director [7]

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Yes.

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Annick Tonie Maas, Exane BNP Paribas, Research Division - Analyst [8]

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On the 3 million VOD subs, can you just remind us how you expect the ramp-up to be? Because I guess, if you add 200,000 per half year, you won't get to the target by 2021. So -- but I suspect you might have a different marketing strategy in place that success of the ramp-up is going to be more significant in the coming quarters.

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Thomas Rabe, RTL Group SA - CEO & Director [9]

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Yes. Well, absolutely. I mean, first of all, we're 1.2, as I said, significant growth compared to the same time last year, almost 50%, which we consider to be significant. Our operations in Netherlands Videoland exceed our expectations. The same applies to RTL in Germany. Don't forget RTL in Germany, TV Now, was relaunched in December of last year. We're ramping up investments. And as I said before, other investment was threefold. Platform, which drives user experience, which is absolutely key, then see here clearly the market standards set by Netflix and Amazon Prime. Secondly, marketing. And thirdly, content. We're really ramping up. We're very confident to get to the 3 million mark, which we announced earlier this year.

We will also, in the course of this autumn, review our ambition level in video-on-demand because it's fair to say that since we made the last announcement, the competitive environment has changed and we talked about Netflix and Amazon Prime. But now we know that this new plan is going to come to us in Europe and Apple TV at some point. So the competitive landscape is changing. It shows that the online video market is highly attractive. We are deeply convinced that with our strategy, which is based on local content, will be successful. There are many examples for this in other territories and regions. So we'll ramp up the investments, which we're certainly going to review our ambition level in the course of autumn in all likelihood are going to increase our investment in video-on-demand going forward.

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Operator [10]

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The next question is from Chris Johnen, HSBC.

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Christopher Johnen, HSBC, Research Division - Analyst [11]

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I'd like to take them one by one. First, Thomas, maybe you could give us a view on consolidation. I mean if you are -- if you would confirm that you're not a seller of broadcasting assets, would you say that you are interior buyer? Or yes, how should we see consolidation?

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Thomas Rabe, RTL Group SA - CEO & Director [12]

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Well, our view on consolidation is that the consolidation, if you're looking at European markets, it's actually quite advanced. I mean just look at the German television markets and the combined advertising market share of RTL and ProSieben, and then you would make the same comparison in the U.S. and you look at the combined advertising market share of the 2 largest networks of broadcasters, you'd see that German market is much more consolidated. That's the first point.

Second point is we will continue to consolidate within our existing broadcasting footprint, and that is demonstrated by the acquisition of Groupe M6. And this makes perfect sense as you said before because kids TV is highly attractive. It's very, very complementary to the family of channels of M6 and highly synergistic both on the cost and on the revenue side.

We would produce similar opportunities in other markets, which we operate, but let me say very clearly, competition law is the real obstacle. Competition authorities have a very traditional, let's say, historic view on markets and relevant markets and competition. And that is a real obstacle for further consolidation in the markets in which we operate, for example, in Germany.

So we are consolidated within our footprint, and we are certainly interested in growing our Fremantle business. We're growing it primarily organically and with kind of, I'd say, very smart agreements with creative producers, [performance] developers and the like. And as I said before in the context of the dividend policy, we think that the growth of RTL will primarily be organic going forward, but where interesting consolidation opportunities exist, which will require M&A within M&A.

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Christopher Johnen, HSBC, Research Division - Analyst [13]

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Okay. Very clear. And second question on Luxembourg. I mean it seems that still -- there's nothing precise here to be announced yet, but maybe you could still share a bit of a view on the scope of restructuring, and there's also still -- I mean you have a couple of billion in potential tax loss carryforwards in the market. If you see any sort of changes here, any sort of early comments on Luxembourg will be my second question.

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Thomas Rabe, RTL Group SA - CEO & Director [14]

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Well, absolutely. And I'll put this in a slightly broader context. We announced yesterday that we would reduce our head count in Luxembourg, which is approximately 190 across corporate functions and service provider functions by 1/3, and would move significant parts of the corporate staff functions to Cologne. The effect will be manyfold. First effect, obviously, is the cost reduction of direct personnel costs and indirect personnel costs.

Secondly, in Cologne, we will be able to make use of our corporate cost in terms of tax deductibility, which is not possible in Luxembourg because our Luxembourg facilities are not profitable, and we have significant tax losses carryforward for which there's limited use. So this reorganization of the corporate center will be implemented in the next month as information consultation process, which is described in detail in Luxembourg label law. This will start next week, and we are confident that we'll complete it by the end of the year and that we will be up and running in the new structure much smaller, I believe, somewhat in the course of the first half of 2020.

The additional benefits of doing what we're doing are as follows: First of all, running the group -- RTL Group out of Cologne at least in part, means that we would be able to make use of the resources of RTL Germany, which is by far our largest business unit; and secondly, to be honest, the restructuring or the reorganization, which we're undertaking at the level of corporate is clearly the beginning. It is absolutely clear in our minds that we will have to make cost reductions across the board, to be able to invest significantly in the new businesses, which we described as advertising technology and video-on-demand technology, marketing and content. So what we're effectively doing is we're reshuffling resources from traditional businesses to new businesses. That unfortunately requires restructuring, which we're undertaking in Luxembourg, but there's also some restructuring in RTL Germany, and we're winding down StyleHaul, which is effectively also restructuring. So it's a much broader theme applicable to RTL Group, but frankly to all companies I know in many different sectors. As I said, not necessarily just to reduce cost, but I mean to free up resources to invest in new businesses and to invest in the future of this company. So that's what we're doing.

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Christopher Johnen, HSBC, Research Division - Analyst [15]

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Okay. Very clear. And then last set of questions on, I think, the ad-tech part of the business. It seems that you -- I mean between splitting of SpotX and your focus on U.S. versus EU, it also seems that there's somewhat of a different view on investing in the 2 businesses. So what I could use some clarification on would be what looking for a strategic partner in the U.S. really means whether I'm right thinking that you don't see yourself investing in both platforms. And then related to that, I'm also not exactly clear on what you mean by an open platform for Smartclip. So does that mean are you open to other broadcasters taking equity? Are you open to just licensing other product, joint development? I mean what does the open platform part really mean?

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Thomas Rabe, RTL Group SA - CEO & Director [16]

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Yes. I mean strategic partnerships in the U.S., I mean, SpotX today is a stand-alone operator in the U.S. market. We're not sure that's exactly the best positioning going forward. SpotX is a highly attractive business. It is very successfully migrated to the OTT business, which drives the growth, which I've just explained. But we don't think, as I said, that we'll be as strong as we are today as a stand-alone business in 12 to 18 months. The significant interest in ad-tech businesses, the objective is not to sell the business, but to find a strong U.S. partner to invest in the platform to develop it further, to cater for the needs of the U.S. market.

When it comes to Europe and to Smartclip, open means exactly what you said. We are deeply convinced that if we don't want to become dependent on the -- totally dependent on the U.S. tax platforms, we have to build our own technology. And there are 2 areas of technology, which are most relevant for broadcasters, and this is video-on-demand technology and advertising technology. And our philosophy on video-on-demand and advertising technology is that the best way to invest in these platforms is to share these platforms and to share the costs. And that's why we said from the beginning that our ad technology -- sorry, our video-on-demand technology platform bedrock, which is operated by M6, is an open platform. It's now focused on the launch of Salto, who is already providing services to a large number of RTL broadcasters and its interest from other parties and broadcasters outside of the RTL Group to use the platform. And exactly the same philosophy applies to advertising technology. We have started discussions with a number of large European broadcasters, and there's real interest in pursuing these discussions, which we'll do in the course of autumn of this year. So we see our sales strategy as a driver of this, providing these platforms to the European market share and use resources with other broadcasters, which, I mean, that we'll be able to build better platforms together at lower costs. That's the idea.

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Christopher Johnen, HSBC, Research Division - Analyst [17]

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Okay. Very Clear. A final one, could you maybe give us, since we don't have you on record commenting on the addressable TV, what's your sort of personal view in terms of the potential of addressable, maybe starting with Germany where your competitor has put out a target of as much as, I think, 1/4 of overall TV advertising potentially becoming addressable in a, I think, 5-year period? Do you have a view on it this year?

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Thomas Rabe, RTL Group SA - CEO & Director [18]

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Yes, we have a view on this, and we've looked at this in quite a bit of detail. And I think we said there are really 2 levels in our business. One is reach, in particular, nonlinear reach. And the second is monetization of the reach, and better monetization via targeting, and addressable TV is part of the targeting. So no doubt, it's a subject we're very interested in. Smartclip offers technology for addressable TV based on the BBTV standard, which have successfully applied, frankly, for the role of addressable TV in a meaningful way. A number of conditions need to be fulfilled including agreement with distributors and the like. So we think the potential is huge. We see the significant price uptick, which you achieved on advertising inventory by targeting or by addressing and advertising, put it in these terms. The share today -- the market share today is very, very low not only in Europe, but also in the U.S. But everybody sees the benefits of addressable TV. Everybody wants to do it, but that's because of a number significant technical and other hurdles to take. But it's one of our focus areas. And as I said before, we've entered into a partnership with ProSieben on "d-force. "d-force" is effectively a demand-side platform for addressable TV. So if you want to book addressable TV in Germany, you've got to go to the "d-force" to book this on ProSieben and RTL. We think this is a pretty solid offer. By the way, it shows that RTL and ProSieben are willing and open-minded to work together where this makes sense.

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Operator [19]

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The next question is from Mr. Davison, Deutsche Bank.

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Laurence Davison, Deutsche Bank AG, Research Division - Research Analyst [20]

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It's Laurie here from Deutsche. On the dividend, you said over 80%. And that compares with the 50% to 75% that you had on the final dividend before, but we have got used and you've been paying an interim for the past few years. So you've been basically tracking about EUR 4 total DPS payout. Are you still committed to the EUR 4 payout for this year and for next year given the guidance you've got in?

Second question is valuation for SpotX. Just thinking about potential partners here if they were to take equity stakes. I'm estimating here that revenues are about EUR 140 million for the non-European sales for the full year. Were the 3x to 4x sales be what you would be looking at as a fair valuation for that group?

And then third question. You said you'd need to review the 3 million subscriber target for on-demand given the competitive launches. So is it fair to assume this 3 million target is going to be revised downwards? And as a result, are EBITA losses going to be higher on on-demand?

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Thomas Rabe, RTL Group SA - CEO & Director [21]

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Elmar, maybe on the dividend...

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Elmar Heggen, RTL Group SA - Deputy CEO, COO & Executive Director [22]

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Yes. I mean, Laurie, what we do is that we obviously expect what the application of video policy would have meant for the years 2015, '16, '17 and '18. I can confirm that it would have also let to pay out EUR 4 a share. So the dividend policy for the last years did not result in material differences to the dividend policy that we have applied [to it] so far. And again for the future, Laurie, you know that we will continue to invest in some of the businesses that we just talked about, the video-on-demand offers and so forth. We would see whether or not we believe it would be in the best interest of ours to be able to accelerate this investment. And it probably already leads to the video-on-demand question that you have here.

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Thomas Rabe, RTL Group SA - CEO & Director [23]

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Just on dividends. I mean I'd maybe even go a step further and say that if we achieve our outlook statement for the year and given the capital gains which we've already realized in the first half of the year on the disposal of (inaudible) I'm confident. I mean if we achieve the outlook, then the dividend is likely to be EUR 4. But clearly, there's no certainty on this if the dividend is not a fixed income instrument, right?

And secondly on advertising technology and valuation of SpotX. I really don't want to speculate. But as I'm sure you know, there are a number of listed ad-tech companies in the market. And if you look at the valuation of the ad-tech business, the key driver is top line growth. And as I just said, top line of SpotX was up at 40%. And it was not only up at 40%, but we believe that the quality of the revenue significantly increased because the share of OTT significantly increased. And that's a big, big growth driver in the U.S. market.

But as I said, we are at the beginning of the process. Market will tell us who the right partner is and be what the right valuation is. Our primary objective is to find a good strategic positioning for SpotX, and we'll deal with the valuation in this context. But we think we're convinced that SpotX is a highly valuable business.

On the subscribers. Frankly, the contrary to what you said applies. I'd say we review our ambition level. It's certainly not downwards but upwards, i.e. subject to review we're going to undertake and often, but frankly based on the first numbers, which I feel we're going to increase our ambition level significantly.

But that clearly means -- I mean let's not fool ourselves. If we wanted to grow the business faster and achieve a higher subscriber base, we'll have to invest more and faster. And this could have a negative impact on short-term profitability. But quite frankly, that I think is what investors should expect from us, not only to make sure that short-term profitability is intact for these dividends, but that we made good use of the assets we have and the competencies developing the future of our business on the base of a strategy in video-on-demand, which I think is highly, highly convincing based on local content, seeing that there are a number of territories. Take the example of India, take the example of Southeast Asia or take the example of Scandinavia. Local players with local content offers outperformed Netflix and Amazon Prime in number of subscribers. So we think our model works, but it requires a real effort and a repositioning of effort regularly in light of the changing competition.

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Laurence Davison, Deutsche Bank AG, Research Division - Research Analyst [24]

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Okay. You've previously spoken about a breakeven for video-on-demand for 2021. Is that going to have to be pushed out now on these new investments?

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Thomas Rabe, RTL Group SA - CEO & Director [25]

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Honestly, it would be too early. It is too early to tell. I mean I think honestly it would be wrong, given the uncertainties in the market and the significant transformation of the business that is required to make a statement like this, which is a level of precision. It is just not possible.

As I said, we, in all likelihood, are going to increase our level of condition, primarily measured in terms of subscribers and revenues resulting from that. And we're going to invest accordingly. And we believe that the group is sufficiently profitable to afford to do this. Just take the example of RTL Germany. Despite the reduction of profitability in the first half of the year, which is due to program investments primarily forthright on the main channel and video-on-demand, we generated an EBITA margin of 30%, which is very, very healthy.

I also said we're not going to exactly -- we're not going to make significant M&A, except market consolidation and maybe some content, which means that we grow the business organically. But that at least partly goes to P&L and has an impact on profitability. But too early to tell now. We will give you a full update on our revised plans in -- at the latest when we present the full year numbers. But I can tell you based on preliminary plans the ambition level will be significantly higher.

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Operator [26]

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The next question is from Conor O'Shea, Kepler Cheuvreux.

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Conor O'Shea, Kepler Cheuvreux, Research Division - Head of Media Sector [27]

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Three questions from my side, especially just to follow up then on the additional investments in SVOD and TV Now. You mentioned Thomas, on the call, that the d-force platform was an example of how the main broadcasters can work together. Obviously, you're not doing that in Germany on SVOD and as simple as managing the content from Discovery and the public stations and so on. Can you just respond in terms of the reasons for going along? And is there a potential to come back on that decision and go a different way in the future as part of the review of the ongoing investments in the fall? That's the first question.

Second question is just on the German market. I think you said you outperformed the market by between 2% and 2.5% in the first half of the year. Just wondering was that roughly even between the first quarter and the second quarter or was there a significant difference in that outperformance.

And then the last question on the Netherlands business. The TV market was up in the first half of the year by 1.5%. You underperformed in a sort of non-sports year. It's somewhat surprising to see that market, which is more structurally challenged because of the high penetration of Netflix and so on, in positive territory. Can you maybe explain why the overall market is growing?

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Thomas Rabe, RTL Group SA - CEO & Director [28]

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All right. Let's start with the situation in Germany. Let me make a more general point. I mean the fact that we are building Salto in partnership with -- in France, in partnership with TF1 -- and constantly, this will show that we're open-minded and joining forces on video-on-demand and creating strong local players. As I said before, we are playing regulatory approvals. We're building the platform. And we launched the service -- and the partners will launch the service in Q1 2020. That's one approach.

The approach in Germany is slightly different. If you look at TV Now today and [Join], these are 2 very different businesses. I don't know whether you've ever used them, TV Now or Join . Join is not a pay offer. It's just not an excellent business. So at this stage frankly, it just doesn't make sense to join forces. In fact, they're really talking with different businesses. So I'm not going to rule out anything in the future because I think this would be foolish given the level of uncertainty, but we are off to a very good start on TV Now. This business is run in a -- I mean jointly with our traditional TV business of RTL.

I think that in video-on-demand, time to market is of essence. I don't want to waste my time negotiating joint ventures and partnership agreements. And frankly, I don't know whether the German competition authorities would allow a tie-up of TV Now and Join]. Just by way of history but not as interestingly, ProSieben and RTL had the intention to join -- to build a joint -- a video streaming platform many years ago. And we ended up being fined by the German competition authorities.

So given all of this uncertainty, including on the regulatory side, our focus in Germany is building TV Now. We think it's got a very nice kind of advantage because we're well positioned. And the other thing which we have in Germany, which I'm sure you talked about with my colleagues in the past, is that we've got a very strong local content because we are -- the strategy of RTL has been, for many, many years, to replace international content with German content, which we produce or have others produce and which we own. And that is clearly the basis for video-on-demand service. And we believe this puts us in a very, very strong competitive position.

So in Germany, we are very happy where we are. We're also talking to the public service broadcasters to lighten content. We're very confident that we'll make progress in the course of time. But at this point, we don't think it will be in our interest to join forces with ProSieben.

The next question was on the Netherlands, right?

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Elmar Heggen, RTL Group SA - Deputy CEO, COO & Executive Director [29]

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German ad market.

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Thomas Rabe, RTL Group SA - CEO & Director [30]

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I'm sorry. German ad market, excuse me. Our estimate, you know that there are no official -- there's no official data here, right? But our estimate was market's effectively RTL than ProSieben and a bit of public service broadcasters, smaller operators. We think the market was down by 5.5 for the first quarter and by 3.2 in the second quarter. We were down by 4.4 in the first quarter and by 0.5 in the second quarter. So we increased our outperformance of the market, so to say, in the second quarter.

On the Netherlands, Elmar, do you want to...

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Elmar Heggen, RTL Group SA - Deputy CEO, COO & Executive Director [31]

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Yes. I mean revenue was slightly down 2.1%. We have a bit of advertising revenue that has been partly compensated by additional revenue coming from Videoland. But you know that the Netherlands are a [GFE] driven market. And we have seen slight decreases in terms of audit performance, mainly on the main channel, RTL 4, that has led to the fact that we have lost advertising revenue. We hope that the strengthening of the grid will help us to gain high audit so that we can catch up for this year.

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Conor O'Shea, Kepler Cheuvreux, Research Division - Head of Media Sector [32]

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Okay. That makes sense. But why was the overall market up in the first half of the year? Was there anything driving that?

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Thomas Rabe, RTL Group SA - CEO & Director [33]

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Well, I mean, first of all, the main reason for this is that advertising inventory was up because surprisingly, and maybe it's good news to everybody, television viewing was up in the Netherlands in the first 6 months of the year. Remember, we've seen significant decline, I believe between 5% and 8%, in the last years. Viewing was up by, I believe, 1 or 2 percentage points in the first half of the year.

Now is this the reversal of trends that people are going to have absolute resolution? I don't think so. This was partly driven by kind of weather, which was very good in 2018, very good in 2019. And the better the weather, the lower the viewing. The worse the weather, the higher the viewing. And therefore, this year, we benefited from weather, which was worse than the prior year. But it's positive, of course. So more inventory in the market means there are more inventory to be sold and therefore, everything else remaining the same at particular price levels.

Advertising revenue up, but fierce, fierce, fierce competition in the market with Talpa TV in particular was also an aggressive sales approach of the public channels, which I think now compete with us on an equal footing currently without restrictions on advertising, but that also may change in the future.

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Operator [34]

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The next question is from Julien Roch, Barclays.

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Julien Roch, Barclays Bank PLC, Research Division - MD & European Media Analyst [35]

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My first question is on restructuring, moving most of your Luxembourg operation to Köln. Could we have the cost of the restructuring this year and then the cost savings generated next year? Number one.

Number two. You said there would be some tax benefit because you had tax loss carried forward. They were stuck in Luxembourg you could not use. So could we have the impact on the tax rate and the size of those tax losses carried forward? That's my second question.

The third question is you gave us ad trend in Germany for July and August, but you didn't say anything about Spain, Belgium, Netherlands. Fourth question is could we have SpotX revenue in 2018 outside of Europe, i.e. mostly U.S, i.e. the big, if you will, partner joining? And then lastly, can we have a split of the 1.2 million paying subs between Germany and the Netherlands?

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Thomas Rabe, RTL Group SA - CEO & Director [36]

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Elmar, you start with restructuring and then I'll...

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Elmar Heggen, RTL Group SA - Deputy CEO, COO & Executive Director [37]

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Yes. You got it. I'll start with the restructuring and the tax question. You should know that in the first 6 months of 2019, we already have in EUR 18 million worth of restructuring charges. So already in the first half, we have had EUR 18 million worth of restructuring charges. We will only start the social dialogue as of next week, as Thomas mentioned earlier. So it's a bit early. But if you want to fit your model, I think it would be wise to double up the restructuring charges. So I think that it is fair to assume that we should expect something around EUR 35 million to EUR 40 million for the full of 2019.

Briefly on the tax benefit. I mean if we were to successfully put cost that currently is based in Luxembourg into the German environment, we'll automatically benefit from the possibility to include it in our tax pool. That way, the cost will basically be reduced by the German tax rate, which is 31.5%. So there will be a mechanical benefit of shifting costs that are currently located in Luxembourg to Germany. And that will lead us to an automatic saving of 31.5%.

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Conor O'Shea, Kepler Cheuvreux, Research Division - Head of Media Sector [38]

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And roughly how much of costs would move from Luxembourg to Germany? So we can calculate the benefit.

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Elmar Heggen, RTL Group SA - Deputy CEO, COO & Executive Director [39]

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Sorry to say -- honestly, we need to have these discussions with both the staff representatives and the union to perform a better picture on what we talk about. And I would want to grant that. I think -- we already mentioned the size of the restructuring. I think that gives you already quite a good idea on what we are going to talk about.

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Thomas Rabe, RTL Group SA - CEO & Director [40]

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Then in terms of subscribers, I mean split between Netherlands and Germany, I mean assume it's approximately 50-50 at this stage on SpotX. I mean we don't really break down these numbers further but assume that more than two-thirds of revenue is in the U.S. And on the advertising market in summer, I mean as I said before, these are small months that we shouldn't read too much into the months. There was a mixed picture but it was a slightly positive trend in most markets in July and slightly, slightly different in August, but that's it.

So let's not read too much into this. This doesn't tell us much for the all-important September, October, November, December period, which drives 40% EBITA and 40% of the advertising revenue in the year.

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Julien Roch, Barclays Bank PLC, Research Division - MD & European Media Analyst [41]

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Okay. Just follow up on the restructuring. The cost savings generated by the restructuring in 2020, is it too early as well? Or can we have...

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Thomas Rabe, RTL Group SA - CEO & Director [42]

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Well, I mean it really is too early. It's significant, but it's too early. We'll get back to you when we present the full year numbers. We really -- we just can't do this. We've informed about yesterday. We said we're starting discussions with the staff representatives next week. The plans will be refined in the next week. The plans are currently preliminary. So I mean we wouldn't be talking about this if this wasn't significant, but it's really too early to say precise numbers. It would be wrong. I wouldn't say it would be misleading, but it would be wrong for the employees and others. So we don't want to do this at this stage.

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Elmar Heggen, RTL Group SA - Deputy CEO, COO & Executive Director [43]

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Yes. And 2020 is expected to be a transition year. I think it will take us until 2021 to see the benefit in full swing.

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Operator [44]

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At the meantime, there are no further questions. (Operator Instructions) We have another question. It is from Richard Eary. Please introduce your company's name.

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Richard Eary, UBS Investment Bank, Research Division - Executive Director and Head of European Media Team [45]

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It's Richard Eary from UBS. Just a couple of questions for me just for clarity. If you look at -- there's obviously the wind down of StyleHaul. If you look at the impact on the MPN revenue number in the first half, how much is StyleHaul revenue out of the EUR 153 million? That would be the first question.

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Thomas Rabe, RTL Group SA - CEO & Director [46]

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Yes. We're checking the numbers. Just a second. I mean BroadbandTV was up at 30% in the first half. StyleHaul was, of course, down. And the MPN businesses, I believe, were up by -- do we have the number?

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Elmar Heggen, RTL Group SA - Deputy CEO, COO & Executive Director [47]

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They're up 9% overall.

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Thomas Rabe, RTL Group SA - CEO & Director [48]

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Yes. We believe across MPN, approximately 10% but it's a mix, right? StyleHaul down, BroadbandTV up and Divimove and United Screens up as well. But in percentage terms, we are all down about 40%. Yes. And we're really going to...

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Richard Eary, UBS Investment Bank, Research Division - Executive Director and Head of European Media Team [49]

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But how much of the EUR 153 million is StyleHaul?

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Thomas Rabe, RTL Group SA - CEO & Director [50]

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20%. So this will go to 0 by October and will be 0 over the next year on a full year basis.

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Richard Eary, UBS Investment Bank, Research Division - Executive Director and Head of European Media Team [51]

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Yes. Okay. I presume that where we get -- we'll get write-down in the second half of that investment or the write-down that we'll get in StyleHaul?

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Thomas Rabe, RTL Group SA - CEO & Director [52]

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No. Everything has been done last year. There will be no further write-downs. There's been some cleanup in the first half. But the goodwill impairment, as you know, was booked last year. There was more cleanup in the first half of the year. Actually without the costs related to StyleHaul, our EBITA in the first half would have been higher than last year. So this had a big impact but expect a nice swing next year.

We expect the MPN businesses will be negative, around minus 25% this year. Expect them to be maximum minus 2% or minus 3% next year. So we'll see a very, very nice swing in the MPN business because we'll be focusing on the European operations of Divimove and United Screens and relatively changing the business model, moving away to the extent possible, probably in direct sales, the businesses which are -- which have more attractive margins like branded content, video productive -- effective video production, right management, talent representation and this kind of stuff.

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Richard Eary, UBS Investment Bank, Research Division - Executive Director and Head of European Media Team [53]

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Just to be clear again. You said that you expect the MPN business this year to be down 25% because of StyleHaul?

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Thomas Rabe, RTL Group SA - CEO & Director [54]

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No. To generate an EBITA of minus 25%, which is EUR 25 million to EUR 35 million.

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Richard Eary, UBS Investment Bank, Research Division - Executive Director and Head of European Media Team [55]

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Okay. I'm sorry.

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Thomas Rabe, RTL Group SA - CEO & Director [56]

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Sorry. No, no, no. I'm getting confused. And so the next year, this minus 25% should go to approximately minus 2% or 3%. So what I'm saying is you'll see a very nice EBITA swing on the MPN business year-on-year.

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Richard Eary, UBS Investment Bank, Research Division - Executive Director and Head of European Media Team [57]

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Okay. Okay. That's clear. The second question just, Thomas, in terms of the other sort of moving parts. So Universum, I think that's very low single-digit basically revenues, is it? Or it comes out -- I mean is that -- where is that booked? Is that booked in other, and that's the reason for the other being down?

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Thomas Rabe, RTL Group SA - CEO & Director [58]

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Yes. No, no, no, no, no. It's part of RTL Germany. That's part of RTL Germany. And it's approximately EUR 70 million on an annual basis.

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Richard Eary, UBS Investment Bank, Research Division - Executive Director and Head of European Media Team [59]

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17?

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Thomas Rabe, RTL Group SA - CEO & Director [60]

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70.

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Elmar Heggen, RTL Group SA - Deputy CEO, COO & Executive Director [61]

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On a full year basis.

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Thomas Rabe, RTL Group SA - CEO & Director [62]

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On a full year basis. And this year, clearly, we deconsolidated the business, I believe, in May -- April, May. So you have some revenue [fully] in our revenue this year and zero next year.

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Richard Eary, UBS Investment Bank, Research Division - Executive Director and Head of European Media Team [63]

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Okay. And the benefit to Gulli as we wind out, given obviously in Q4 it's going to be the big impact when that deal closes?

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Thomas Rabe, RTL Group SA - CEO & Director [64]

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Yes. This will have a nice impact on revenue and profitability because the profitability of this business is geared towards the fourth quarter. So the timing of the year could not be much better.

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Richard Eary, UBS Investment Bank, Research Division - Executive Director and Head of European Media Team [65]

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And rough magnitude in terms of revenues for Q4 for Gulli?

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Thomas Rabe, RTL Group SA - CEO & Director [66]

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We don't provide this number. Please ask them please.

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Richard Eary, UBS Investment Bank, Research Division - Executive Director and Head of European Media Team [67]

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Okay. And then just the last question just on total viewing. I mean a number of your competitors, particularly ProSieben and ITV, are now sort of looking at providing total viewing numbers, so including just linear and nonlinear, to obviously track how their content is resonating with consumers. I'm just wondering whether you have any stats that you can share so we can track linear and nonlinear performance in terms of viewing hours or viewing minutes.

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Thomas Rabe, RTL Group SA - CEO & Director [68]

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Well, I mean, first of all -- I mean on viewing in linear television, I think the numbers are in the public domain, right?

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Richard Eary, UBS Investment Bank, Research Division - Executive Director and Head of European Media Team [69]

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Yes. We're all looking at the -- we're obviously...

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Thomas Rabe, RTL Group SA - CEO & Director [70]

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We don't have a combined view. And as you know, even on linear TV, the measurements of viewing time is incomplete. Mobile viewing is on capture and so on and so on. So the numbers are actually understated. But we're now seeing progress being made in capturing the full viewing time and the full audience. And this will actually have a positive -- this will have a positive impact on television viewing, which I think will become more transparent in the course of next year and the year after as the company's measuring audience improve their systems.

In terms of viewing time. I mean as RTL Germany -- that is our channels and our digital offers, the viewing time -- to give you an example. Q2 2018 was -- that's 1 million hours. So we have 4,358.62. In Q2 2019, it was [4,767]. So it was actually up by 409, I believe, million hours, which is 4.8%, right? That's our estimate. That includes old channels, I mean the traditional channels, but also all the digital offers. The shows when combined were actually not in a bad shape. And if you look at the same numbers on a half year basis, half year 2019 to half year 2018, the viewing time is actually only down by 0.8%. And what is also clear is that the digital offers are -- the share of the younger viewers in digital offers is higher. It is lower in the traditional viewing. And so via the digital offers, we partly compensate for the decline in younger demos in the traditional viewing.

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Richard Eary, UBS Investment Bank, Research Division - Executive Director and Head of European Media Team [71]

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Why was Q2 up 4.8% and H1 was down minus 20%?

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Thomas Rabe, RTL Group SA - CEO & Director [72]

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Listen. I mean there are all sorts of factors. I mean this relates, as I said before, partly to the weather. I mean it sounds a bit bizarre but it is true. There's a strong correlation between viewing and the weather in particular on a year-on-year comparison.

It also depends on programming, et cetera. So there are many, many factors. And the other thing is, of course, that the audience shares, as we said before, of RTL Germany has increased year-on-year for the family of channels and for the main channel. So there are many, many factors influencing this. It would, I think, be a little bit too far to try to pick an order for the update.

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Elmar Heggen, RTL Group SA - Deputy CEO, COO & Executive Director [73]

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I think the public channels had a very strong start from the Q1 in German linear TV with some great big formats, which probably explains, I think -- as Thomas said, it's quite complicated. There are certainly moving parts.

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Thomas Rabe, RTL Group SA - CEO & Director [74]

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So there's not a simple explanation for this. But I think the overall statement of saying that in Germany, where linear viewing has been down quite a bit, total viewing including online offers has actually been relatively stable year-on-year. I think it's a positive message to you.

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Richard Eary, UBS Investment Bank, Research Division - Executive Director and Head of European Media Team [75]

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Just one final question going back to 3 million subs on the TVOD. When -- what was the actual target by when? Because obviously, you talked about EUR 150 million increase in the total revenues from SVOD and AVOD by 2021. Where was the 3 million target?

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Elmar Heggen, RTL Group SA - Deputy CEO, COO & Executive Director [76]

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2021.

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Thomas Rabe, RTL Group SA - CEO & Director [77]

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2021, absolutely. Absolutely, these are numbers on comparable. End of 2021, of course, so 2.5 years to go.

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Elmar Heggen, RTL Group SA - Deputy CEO, COO & Executive Director [78]

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On the old metric.

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Thomas Rabe, RTL Group SA - CEO & Director [79]

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On the old metric, exactly. Good. Any other questions?

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Operator [80]

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The last question is from Patrick Schmidt, Warburg Research.

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Patrick Schmidt, Warburg Research GmbH - Analyst [81]

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Just a quick follow-up on the restructuring costs in referring to StyleHaul. So should we expect anything in H2 as well? And you also mentioned some restructuring at the German Media Group. So your indication of EUR 35 million to EUR 40 million, is that including everything? Or is that mainly the overall headcount reduction in Luxembourg moving to Germany? Or is there some extra bits?

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Elmar Heggen, RTL Group SA - Deputy CEO, COO & Executive Director [82]

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On start of the second half, you should not expect any additional restructuring charges in the order book in the first half. And the kind of EUR 35 million to EUR 40 million range we gave for the full year 2019 will include also restructuring that we are currently foreseeing for our German business. So it would be all included, so to say.

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Patrick Schmidt, Warburg Research GmbH - Analyst [83]

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Okay. And in terms of your guidance just before restructuring costs, so we could deduct this EUR 35 million to EUR 40 million from your given range from the minus 2.5% to minus 5%, correct?

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Thomas Rabe, RTL Group SA - CEO & Director [84]

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That's correct. That's why we clarified this at this point. But then looking at the first half of the year, our EBITA was down by less than 2%. And as I said, without this item of restructuring, in fact, which we did not normalize in the first half of the year, our EBITA would actually have been -- would have been higher in the first half of the year compared to 2018, which means that for the first half 2019, we're well ahead of the outlook we provided. That should give you a little bit of comfort that we'll achieve the outlook, the minus 2.5% to minus 5% EBITA on a full year basis, but as I said, largely depending on advertising market performance in the 2 largest markets, Germany and France. And these markets are, unfortunately, very hard to read.

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Operator [85]

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So there are no further questions. I hand back to the speakers.

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Andrew Buckhurst, RTL Group SA - SVP of IR [86]

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Thank you very much, everyone, for joining the call today. Thank you to our speakers, Thomas and Elmar. If you have any more questions, you know where to find me. I'm in the office. So please don't hesitate. And obviously, we'll see each other at some of the conferences over the next few months and will be in touch. And you'll see the management team end of next year around the full year results. Thank you, and have a good day.

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Thomas Rabe, RTL Group SA - CEO & Director [87]

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Thank you. Bye.

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Elmar Heggen, RTL Group SA - Deputy CEO, COO & Executive Director [88]

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Thank you. Bye-bye.

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Operator [89]

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Ladies and gentlemen, thank you for your attendance. This call has been concluded. You may disconnect.