Variety: Germany’s ProSiebenSat.1 Group Revenues Stabilize as Streaming Gains Offset TV Advertising Decline

Story from Variety:

Revenue gains made by streamer Joyn partially offset the continuing decline in linear TV advertising in the German-speaking region at media giant ProSiebenSat.1.

Quarterly results published on Tuesday reveal that group revenues are relatively stable with a 3% decline in the third quarter of 2023 to €888 million ($950 million) compared to €911 million ($974 million) in the equivalent quarter of the previous year. The numbers are a marginal improvement on the 2023 second quarter results when the group’s revenues declined from €1.04 billion ($1.14 billion) in 2022 to €868 million ($950 million) this year. Group revenues for the first nine months of 2023 were €2.5 billion, which corresponds to a decrease of €323 million or 11%.

The group’s adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) increased fractionally to €110 million in the third quarter of 2023 (previous year: €108 million). In addition to targeted cost-control measures, the increase of 2% is mainly due to profitable revenue growth in the digital platform and commerce business, the group said. “Earnings were significantly impacted by the decline in the highly profitable advertising business as well as negative effects from the full consolidation of Joyn,” the group added.

Adjusted net income declined to €23 million in the third quarter (previous year: €39 million). The increase in adjusted EBITDA was primarily offset by higher interest and tax expenses, the group said.

External revenues in the entertainment segment amounted to €598 million in the third quarter of 2023, 4% below the previous year’s figure of €621 million. “Against the backdrop of the macroeconomic environment, advertising revenues in the German-speaking region decreased again compared to the previous year, although the decline of 5% was significantly lower than in the first half of the year,” the group said. “At the same time, digital and smart advertising revenues in the German-speaking region grew by 16%, partially offsetting the decline in TV advertising revenues. Joyn in particular saw very significant growth here,” ProSiebenSat.1 said. Joyn recorded a good quarter with an increase of 58% in AVOD advertising revenues.

There was also cheer in the group’s commerce and ventures segment, where external revenues grew by 14% to €182 million in the third quarter of 2023 (previous year: €160 million). However, in the dating and video segment, external revenues declined 17% from €129 million to €108 million.

The ProSiebenSat.1 Group’s outlook remains conservative, given the relatively slow pace of recovery. It said that the target range for group revenues is €4.10 billion with a variance of plus/minus €150 million. The previous year’s figure, adjusted for currency and portfolio effects, was €4.02 billion.

Bert Habets, group CEO of ProSiebenSat.1 Media SE, said: “We have taken the challenges in the market as an opportunity to realign our group in terms of both personnel and organizational. In doing so, we are setting the course to expand our digital business areas more strongly. At the same time, we have now successfully implemented the cost efficiency program that we initiated at the beginning of the year.”

Martin Mildner, group CFO of ProSiebenSat.1 Media SE, added: “After a difficult first half of the year, we managed to keep our revenues almost stable in the third quarter compared to the previous quarters, despite the continuing challenging market environment. We are seeing first signs that our clear focus on our strategically important business areas is paying off. At the same time, we are acting in an extremely cost-conscious manner – our adjusted EBITDA in this quarter is therefore above the previous year for the first time since 2021, despite the weakness of the advertising market. For the group, we want to continue this trend and are currently expecting a slight increase in revenues and earnings in the crucial fourth quarter.”