ProSiebenSat.1 posted lower first-half revenue as Germany‘s weak television advertising market and competition from broadcasters carrying the World Cup weighed on its entertainment business.
The German commercial broadcaster, which is controlled by the Berlusconi family’s MediaForEurope (MFE) group, reported first-half revenue of €1.54 billion ($1.77 billion) on Thursday, down 9 per cent from a year earlier. On an organic basis, excluding portfolio changes and currency effects, revenue declined 2 per cent. Second-quarter revenue fell 8.5 per cent to €768 million ($881 million).
The company said advertising revenue continued to be affected by a slowdown in the German TV market, the ongoing shift of ad spending to digital platforms and competition from broadcasters airing major sporting events, particularly the World Cup. Entertainment revenue fell 6 per cent in the first half to €952 million ($1.09 billion), with linear TV advertising down 9 per cent.
Digital advertising remained a bright spot. Digital & Smart advertising revenue rose 6 per cent, driven by ProSieben’s streaming service Joyn, content distribution on third-party platforms and the group’s audio business. Advertising-supported streaming revenue at Joyn increased 8 per cent in the first half, while subscription revenue climbed 20 per cent.
Despite the revenue decline, earnings improved sharply as the company cut costs and continued a broader restructuring. First-half EBITDA rose by €152 million ($174 million) to €124 million ($142 million), compared with a loss of €28 million ($32 million) a year earlier. Programming expenses fell to €404 million ($464 million) from €496 million ($570 million), while personnel costs declined to €299 million ($343 million) from €416 million ($478 million), reflecting restructuring measures, asset sales and lower content costs.
ProSiebenSat.1 has also continued to slim down its portfolio. Since the start of the year, the company has sold six non-core businesses, including Studio71 U.S., as it focuses on its German-speaking entertainment operations.
The company is also betting big on Joyn. Last month the streaming service announced a deal with ZDF to add on-demand programming from the German public broadcaster. ProSieben is also developing a shared streaming technology platform with MediaForEurope, for use across the group’s European markets. MFE pan-European network of commercial broadcasters also includes Italy’s Mediaset and Telecinco in Spain.
ProSiebenSat.1 reaffirmed its full-year outlook, maintaining its forecast for slight organic revenue growth and a significant increase in EBITDA, while cautioning that visibility in Germany’s advertising market remains limited.
