ProSiebenSat.1 Media has posted full-year earnings down €100M ($109), but its recent recovery looks set to continue with fourth quarter income up “significantly.”The German broadcast giant posted adjusted EBITDA of €578M in 2023, down nearly 15% from €678M in 2022. This was in line with expectations in what the broadcaster called both an “economically weak” and “difficult” environment. Revenues were also down 7.5%, at €3.85B for the full year against 2022’s €4.16B.However, as ProSieben had indicated in preliminary Q4 results last month, revenues for the quarter were up and adjusted EBITDA increased by 11% to €335M, though net income dropped from €301M to €225. Furthermore, group net debt for 2023 declined 4% to €1.55M thanks to high cash flow intake towards the end of the year.The entertainment division, which houses its channels and streaming assets, saw external revenues fall 11% across the year to €2.57B, with a fall in advertising in German-speaking regions blamed. However, ProSieben noted a “positive trend” continued to emerge here, with ad revenues increasing slightly year-on-year and digital and smart advertising business, including streaming Joyn, growing “dynamically in the important Christmas period, as well as for the full year.”ProSieben also noted the sale of Red Arrow Studios’ U.S. production business to The North Road Company in July 2022 had a “significant effect” on year-on-year revenue comparisons for entertainment.This all comes in context of major structuring and downsizing at ProSiebem during the middle of 2023, with about 10% of staff laid off, and the company refocused to become a digital entertainment business, with streamer Joyn at the center. Key execs such as Seven.One Entertainment Group CEO Wolfgang Link and Joyn bosses Tassilo Raesig and René Sahm also exited last year.ProSiebenSat.1 Media CEO Bert Habets claimed today the strategy to focus on Joyn was “now starting to pay off.”“This is also underlined by the positive development, especially in the fourth quarter of 2023,” he added. “Our goal is to further increase usage and user base of Joyn with double-digit growth rates per year. We are firmly convinced that a free offering, centered on one platform, is the key to success.“We are increasingly focusing on local and live content to strengthen our TV channels and scale Joyn by investing significantly more in this area in 2024. Exclusive content is the driver that will enable us to further improve the monetization of our reach – both in traditional TV and on our digital offerings. With our focus on Entertainment, we also evaluate opportunities to crystalize value from our non-core assets, depending on the market environment.”Joyn recorded its strongest quarter to date in Q4, with monthly video users increasing to 6.3 million, up 30% year-on-year and viewing time up 15% to 8.8 billion minutes. At the same time, AVoD revenues grew 37% in Q4.ProSieben is projecting 2024 group revenues of €3.95B, with a variance of €150M. Entertainment ad revenues are expected to grow slightly (2%), with digital and smart advertising revenues “likely to continue their growth momentum.” Adjusted EBITDA of €575M is also predicted, which ProSieben says “reflects the previously announced increase in programming investments, which – despite offsetting savings effects from efficiency measures – will have a negative impact on adjusted EBITDA but will sustainably strengthen growth in the entertainment business.”Local content and programming expenses will increase by around €80M, with programming costs reaching just over €1B.“Even though the macroeconomic environment remains challenging, we expect advertising revenues in the German-speaking region to develop positively in 2024,” said Martin Mildner, Group CFO of ProSiebenSat.1 Media. “At the same time, we want to further strengthen ProSiebenSat.1’s profitability this year and invest €80M more in local content. To this end, we will consistently continue our cash and cost management. A solid financial basis is the prerequisite for our growth.”
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