Release Date: August 08, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- ProSiebenSat 1 Media SE (PBSFY, Financial) reported a 5% increase in group revenues for both the second quarter and the first half of 2024, reaching EUR907 million and EUR1.774 billion, respectively.
- The commerce & ventures segment showed strong performance with a 17% revenue growth in Q2, and a 19% increase for the first half of the year.
- Adjusted EBITDA increased by 14% to EUR91 million in Q2, supported by higher revenues and cost reductions.
- The digital and smart advertising revenues in the DACH region grew by 12%, driven by the success of the Joyn platform.
- The company confirmed its financial targets for the full year 2024, aiming for group revenues of around EUR3.95 billion and an adjusted EBITDA of around EUR575 million.
Negative Points
- The advertising revenues in the DACH region only grew by 1% in Q2, impacted by the European Soccer Championship and an earlier Easter date.
- The dating & video segment experienced a 9% decline in revenues for both Q2 and H1, with the dating revenues dropping by 13% due to increased competition, especially in the US.
- TV advertising revenues declined by 1% in Q2, reflecting challenges in the traditional advertising market.
- The company anticipates a potential decline in adjusted EBITDA in the second half of the year due to increased programming costs and less pronounced savings.
- The Munich public prosecutor has initiated a formal investigation into Jochen Schweizer mydays, leading to a provision in the low single-digit million euro range for impending charges.
Q & A Highlights
Q: Could we assume that July and August are in line with June, and do you have any early visibility on September? Also, what level of free cash flow do you expect to generate this year?
A: We see a slight decline in advertising revenues in July and August, with a recovery expected in September. Visibility is limited, but we are confident of a further recovery. Regarding free cash flow, the first half was impacted by restructuring costs, but these are one-time effects. We expect improved free cash flow in the second half.
Q: By how much is ProSieben going to outperform the expected 2% growth in the German TV advertising market? Also, can you update us on the potential monetization of Verivox and Flaconi?
A: Our guidance is based on 2% market growth, but if the recovery continues, we could exceed this. The sales process for Verivox and Flaconi is on track, but we cannot comment on specifics like buyer interest or valuation at this time.
Q: Is there a softening in the underlying ad market in June and July, or was the market share shift stronger than anticipated? Also, could you provide some insight into the profitability of Verivox and Flaconi?
A: The European soccer event led to a firmer decline in June than expected. If we include advertising from weather.com and marktguru, we would see 3% growth in Q2. We don't guide on profitability, but both Verivox and Flaconi are seeing significant improvements in EBITDA and free cash flow.
Q: How much visibility do you have on advertising bookings, and has this changed over the last year? What is driving the increase in content spending in Q4?
A: Visibility has shortened, with insights on September bookings expected soon. Content spending is increasing by EUR50 million in the second half, focusing on access primetime and new formats to boost performance and viewer engagement.
Q: What does the stabilization in European dating business mean for revenues? Are they still declining, or are we seeing stabilization?
A: We see stabilization in European dating brands and are optimistic about resumed growth in the second half. However, the American activities, especially with eharmony, are expected to continue declining.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
