delivering profitable long-term growth...2015/11/06 · | october 15, 2013 page 11 our two core...

| October 15, 2013

Keynote

Delivering profitable long-term growth

Thomas Ebeling

October 15, 2013

| October 15, 2013

Mar 2009 Sep 2009 Mar 2010 Sep 2010 Mar 2011 Sep 2011 Mar 2012 Sep 2012 Mar 2013 Sep 2013

ProSiebenSat.1 share price increased 36-fold within four years

with attractive dividend yields in past three years

Share price development ProSiebenSat.1

[in EUR]

EUR 246m

dividend paid EUR 241m

dividend paid

EUR 1,201m

dividend paid

EUR 32.36

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

Source: Bloomberg (03/10/2009–10/08/2013)

EUR 0.90

| October 15, 2013

0

2

4

6

8

10

12

Modern TimesGroup

ITV ProSiebenSat.1 RTL Group TF1 M6 MetropoleTV

EV/EBITDA basis P/E basis

Despite strong share price performance ProSiebenSat.1

trades in line with relevant peer group

EV/EBITDA and P/E multiples calculated on rolling 12-month forward consensus estimates.

Source: Bloomberg as of October 8, 2013

Mean 9.4x

0

5

10

15

20

25

Modern TimesGroup

ITV ProSiebenSat.1 RTL Group TF1 M6 MetropoleTV

Mean 16.6x

| October 15, 2013

ProSiebenSat.1 achieved strong revenue and earnings

growth and reduced net debt substantially

CAGRs calculated on the basis of annual growth rates of continued operations at the time.

Revenues (CAGR 2009-2012) +7.3% ✔ Recurring EBITDA (CAGR 2009-2012) +12.8% ✔ Recurring EBITDA margin (2012) +31.6% ✔ Underlying net income (CAGR 2009-2012) +41.0% ✔ Net debt reduction (2009-2012) EUR 1.52bn ✔ Financial leverage (12/31/2012) 2.0x ✔

| October 15, 2013

H1 2013 with continued positive results

[in EURm]

Revenues

Recurring EBITDA

1,187.6

337.2

Continuing operations. Net income after non-controlling interests.

Net income 140.7

+12.0% ✔

+6.0% ✔

+25.4% ✔

Underlying net income 155.3 +10.2% ✔

| October 15, 2013

0

25

50

75

100

Digital & Adjacent

All segments growing in H1 2013

Continuing operations. Please note: Broadcasting German-speaking includes Pay TV. *Total revenues incl. internal revenues.

External revenues

[in EURm]

Broadcasting German-speaking

+54.8%

0

250

500

750

1,000

0

100

200

300

Content Production & Global Sales

927.8

H1 2013

896.3

+74.7%

75.0*

46.3*

50.5 28.9

+3.5%

H1 2012 H1 2013 H1 2012 H1 2013 H1 2012

209.2

135.2

• TV advertising revenues: +2.6%

• Distribution revenues: +49.1%

| October 15, 2013

2013 to 2014 is a period of investments in growth…

Digital &

Adjacent

Entry in new markets (e.g., multi-channel-network, AMPYA)

Building up scale (e.g., maxdome, MyVideo)

Bolt-on acquisitions

Incubation initiatives (e.g., Valmano, Petobel)

3

4

5

6

Broadcasting

German-

speaking

New channel launches (sixx, SAT.1 Gold and ProSiebenMAXX) 1

Investments in Austria (Champions League, Puls4) 2

| October 15, 2013

…however, we confirm our August 2013 guidance…

Continuing operations. *Excluding M&A.

FY 2013 targets

Group revenue growth

Recurring EBITDA

Net income

Net debt*

Q2 2013 guidance

mid to high single-digit

above prior year

further improvement

<EUR 1.5bn

| October 15, 2013

…and even increase our 2015 revenue growth target

by EUR 200m

Revenue growth

[in EURm] >800

>125

Content Production &

Global Sales

Digital &

Adjacent

Broadcasting

German-speaking 2010 2015E

Continuing operations. 1) Revenues excl. 9Live 2) based on new 2015 revenue growth target

>250

>425

2,0511)

>2,851

Implied

CAGR

>6.8%

(EUR 800m)

>600

+175

>250

>100 +25

>250

Degree of achieve-

ment H1 20132) 37% 56%1) 83% 54%

old

target

new

target

| October 15, 2013

Our strategy 2012-2018 is built on Broadcasting and Digital

Our vision is to become a broadcasting,

digital entertainment and

commerce powerhouse

by using our TV power and idle ad inventory.

| October 15, 2013

Our two core assets are idle ad space and audiovisual

content

Ad Space

• Idle TV ad space to produce positive

NPV via digital investments (ad

space & cash)

• More digital video ad space to

participate strongly in online video ad

growth

Content (brands)

• Exploiting existing content/output

deals

• Producing/acquiring new and

cheaper content to leverage and

monetize via ad and pay revenues

across different platforms and offerings

– effectively addressing multiple target

groups

| October 15, 2013

TV is the hottest ‘Next Thing’

Source: Salman Amin, Global Chief Marketing, PepsiCo

Everywhere

On demand

Social = Anyone, Anywhere

God made man

because he loves

stories. Yiddish Proverb

Living room only

By appointment

Social = Friends & Family

in your proximity

then ...

NOW

| October 15, 2013

New revenue growth opportunities driven by content

New

channels

New

platforms/

distribution

New well targeted linear FTA channels 5

Non-linear app channels 6

New windowing and monetization strategy for MCN 7

New/better basic Pay TV channels 8

Further increase distribution on all platforms 1

Mobile live streaming 2

HbbTV content 3

Screen management (Smart TVs, tablets, set-top boxes) 4

| October 15, 2013

Content and advertising power are critical drivers

of TV and digital synergies

Free content • > 13,000 hours exclusive local content

• > 50,000 hours US blockbuster content

Free TV

advertising • > EUR 1bn of idle TV ad space

available at no additional cost

Free cross-promo/

bundling power

• Portfolio-spanning product bundle

• Shared customer data cross selling potential

• TV and online reinforce each other

| October 15, 2013

We operate in sizable digital markets with strong structural

growth potential

1) InStream Ad market (gross; Print + Online); 2) Home Video Entertainment (e.g., DVD, Blu-Ray, video rental); 3) Online mobile & consoles; 4) Total music market 5) Total retail market

Source: GfK, PwC, BIU, GfK, A.T. Kearney, Marketline, Statista, P7S1 estimates; market sizes and CAGRs referring to German market

Dynamic market

growth 2012-18E

Structural

growth potential

[market size

vs. addressable

market, in EURm]

AdVoD

~26%

Addressable1

Germany

13,300

2012

214

Digital Entertainment

PayVoD

~25%

Addressable2

Germany

3,030

2012

124

Games

~12%

Addressable3

Europe

2012

3,800

~31%

Addressable4

Germany

2012

1,100

41

~12%

Addressable3

Germany

428,000

2012

Music Streaming Digital Commerce

10,500

24,700

| October 15, 2013

We can achieve competitive margins in large and

growing digital segments

Relatively low content, sales and marketing cost 1

Driving scale of digital assets with TV power and bolt-on acquisitions 2

Leveraging intra/inter digital vertical synergies (e.g., travel cluster) 3

Minimizing inventory risk and fixed payments 4

Avoiding high invest/risk acquisitions 5

| October 15, 2013

Broadcasting & Digital portfolio approach to deliver

balanced and dynamic growth from 2012 to 2018

1) Incl. Distribution

Mid to high single-digit

Leading digital/

broadcasting player

Multiple attractive

businesses

Mid single-digit

<30%

Mid single-digit

Market growth (%)

Our market position

Market portfolio

Revenue growth (%)

Recurring EBITDA (%)

R. EBITDA growth (%)

Investment needs

Digital

Double-digit

Top 3 in segments

Multiple segments

Double-digit

Leader in segment

Mid single-digit

Bolt-on acquisitions/incubation

Broadcasting1)

Low single-digit

Leader

Multiple channels/platforms

Low single-digit

>30%

Low to mid single-digit

Limited Sufficient M&A investment –

no major high risk investment

Group [2012-18 targets]

| October 15, 2013

Key strategies to secure attractive future for our

broadcasting business 1

Maintain leading positions with channels/launch attractive new channels at low cost

Create outstanding linear content (talk-of-nation, live, quality)

Provide top US content

Demonstrate superior TV ad impact/continue to raise prices

Attract new ad customers/cannibalize print & other media

Launch innovative ad technologies & new ad formats/monetization models

Diversify creative talent and artist base

Secure distribution everywhere at lowest cost/maximize distribution income

Keep program cost inflation low/optimize efficient use of program investments

TV 3.0 – Provide new audiovisual content offerings (e.g., apps, TV-Online ping-pong)

1

2

10

9

8

7

6

5

4

3

| October 15, 2013

2

3

4

5

6

7

8

Key strategies to build an attractive digital business

Leverage idle TV and Online ad inventory

Drive all businesses to sufficient scale

Bolt-on acquisitions and incubation

Expand internationally, leveraging broadcasting/other partners

Alliances with PE/VC players and with tech companies

Leverage content across multiple platforms/new content offers (apps)

Create exit value for selected M4E investments

Focus on leadership position in selected Digital Entertainment & eCommerce segments

1

| October 15, 2013

TV growth plan

External revenues incl. AT/CH

Audience share gains with SAT.1/ProSieben 1

Grow new channels 2

Attack print, radio and outdoor 3

Leverage pricing opportunities 4

Build reach through new distribution platforms 5

Target/build new advertising segments 6

~200m TV ad revenue growth

2018 vs. 2012

[in EURm]

| October 15, 2013

Distribution growth plan

External revenues incl. AT/CH

FTA HD growth 1

Lower distribution costs 2

Basic pay penetration growth 3

4

New Pay TV channels (upside) 5

Mobile as new distribution way generating new income and

securing reach in the long term

Build distribution business in AT/CH 6

~100m Distribution revenue

growth 2018 vs. 2012

[in EURm]

| October 15, 2013

D&A growth plan

External revenues

Digital Entertainment 1 • Scale PayVoD (maxdome) and music streaming (Ampya)

• Grow multi-channel-network (Studio71)

• Further grow AdVoD businesses (ad tech income, targeted ads)

• Multi-screen growth (mobile, SmartTV, HbbTV, 2nd Screen)

• New games partnerships and mobile push

Digital Commerce 2 • Expand M4R/E customer portfolio

• Grow strategic portfolio (travel, fashion/lifestyle)

• New incubation initiatives

• Enter new segments (betting, gambling)

• Expand internationally

Adjacent 3

• Drive digitalization (digital music label)

• Expand core label business into close-by areas (events, ticketing artist

management)

~600m Revenue growth

2018 vs. 2012

[in EURm]

| October 15, 2013

~100m Revenue growth

2018 vs. 2012

[in EURm]

Production growth plan

External revenues

Continuous portfolio optimization 1

Continue to build scale across all markets (US, UK, Asia) 2

Targeted strategic content production partnerships 3

Distribution platform partnerships with

digital/online platforms 4

| October 15, 2013

We target EUR 1bn Group revenue growth by 2018

>1,000

>100

Continuing operations.

>300

>600

2,356

>3,356

Implied

CAGR

>6%

Content Production &

Global Sales

Digital &

Adjacent

Broadcasting

German-speaking 2012 2018E

Revenue growth

[in EURm]

Recurring EBITDA margin on targeted EUR 1bn Group revenue growth: 20%-25%

| October 15, 2013

Total revenues 2018E

Until 2018, we will diversify our business portfolio – less

dependency on German TV ad market and strong digital portfolio

1) Based on recurring EBITDA

Other

revenues

>40% German

TV ad

revenue

D&A

25-30%

Total revenues 2018E Margin profiles 2018E1)

>30% BCGS

~20% D&A

~10% CPGS

<30% Group

| October 15, 2013

Summary: ProSiebenSat. 1 corporate targets 2012 – 2018

1) Before M&A. CAGRs in %.

Revenue growth +EUR 1bn

Recurring EBITDA growth (CAGR) mid single-digit

Free Cash Flow1) (CAGR) above revenue

CAGR

Underlying Net Income (CAGR) above revenue

CAGR

| October 15, 2013

Guidance CMD 2013

Outlook FY 2013

confirmed

Mid to high single-digit

Group revenue growth

CMD targets 2010-15

increased

EUR 800m revenue

growth by 2015

CMD targets

2012-18

EUR 1bn revenue

growth by 2018

| October 15, 2013

Disclaimer

This presentation contains "forward looking statements" regarding ProSiebenSat.1 Media AG ("ProSiebenSat.1") or ProSiebenSat.1 Group, including opinions, estimates and projections regarding ProSiebenSat.1's or ProSiebenSat.1 Group's financial position, business strategy, plans and objectives of management and future operations. Such forward looking statements involve known and unknown risks, uncertainties and other important factors that could cause the actual results, performance or achievements of ProSiebenSat.1 or ProSiebenSat.1 Group to be materially different from future results, performance or achievements expressed or implied by such forward looking statements. These forward looking statements speak only as of the date of this presentation and are based on numerous assumptions which may or may not prove to be correct.

No representation or warranty, expressed or implied, is made by ProSiebenSat.1 with respect to the fairness, completeness, correctness, reasonableness or accuracy of any information and opinions contained herein. The information in this presentation is subject to change without notice, it may be incomplete or condensed, and it may not contain all material information concerning ProSiebenSat.1 or ProSiebenSat.1 Group. ProSiebenSat.1 undertakes no obligation to publicly update or revise any forward looking statements or other information stated herein, whether as a result of new information, future events or otherwise.

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