ProSiebenSat.1 Media SE (Explanations According to HGB)

  • The business development of ProSiebenSat.1 Media SE reflects the economic situation of the Group; this also applies to the opportunity and risk situation.

The Annual Financial Statements of ProSiebenSat.1 Media SE are prepared in accordance with the provisions of the German Commercial Code and the supplementary provisions of the German Stock Corporation Act and the Articles of Association.

Business and Economic Environment

ProSiebenSat.1 Media SE is a management holding company with own operating activities. It is responsible for management functions such as corporate strategy and risk management for ProSiebenSat.1 Group, investment administration and central financing tasks, and other service functions. Furthermore, ProSiebenSat.1 Media SE is the tax group parent for the majority of the domestic subsidiaries. Its material income results from subsidiaries’ profit transfer agreements. In addition, revenues are generated in particular from internal services and the sale of ancillary programming rights.

The economic environment of ProSiebenSat.1 Media SE essentially corresponds to that of ProSiebenSat.1 Group and is described in detail in the section of the Group’s environment.

ProSiebenSat.1 Media SE as the parent company of ProSiebenSat.1 Group is integrated into the Group-wide risk management system. Further information and the description of the internal control system for ProSiebenSat.1 Media SE, required according to section 289 (5) HGB, are presented in the Risk Report.

The Management Declaration according to section 289a HGB is publicly available on the Company’s website and can be viewed in this Annual Report.

Significant Events in 2016

On November 3, 2016, ProSiebenSat.1 Media SE carried out a cash capital increase from Authorized Capital without shareholders’ preemptive rights. The share capital increased by 6.5 % and 14,202,800 new registered-common shares were issued at EUR 36.25 per share to institutional investors with a full dividend entitlement for the financial year 2016.

In addition, ProSiebenSat.1 Media SE issued three unsecured syndicated promissory notes as of December 1, 2016 totaling EUR 500 million with maturities of seven years (EUR 225 million at a fixed interest rate and EUR 50 million at a variable interest rate) and ten years (EUR 225 million at a fixed interest rate).

Earnings of ProSiebenSat.1 Media SE

Statement of income according to German GAAP (HGB) — executive summary (Fig. 80)

 

 

 

 

 

 

 

EUR m

 

2016

 

2015

 

2015
as per BilRUG

Revenues

 

99

 

38

 

92

Other operating income

 

66

 

141

 

87

Program and material expenses

 

55

 

38

 

56

Personnel expenses

 

103

 

73

 

73

Depreciation

 

17

 

11

 

11

Other operating expenses

 

118

 

143

 

125

Operating expenses

 

293

 

265

 

265

Investment income

 

722

 

773

 

773

Financial result

 

–78

 

–81

 

–81

Taxes

 

186

 

172

 

172

Income after taxes

 

330

 

434

 

434

Profit of the year

 

330

 

434

 

434

Profit carried forward

 

1,533

 

1,486

 

1,486

Balance sheet profit

 

1,863

 

1,920

 

1,920

Due to the first-time adoption of the requirements of the German Accounting Directive Implementation Act (BilRUG) in 2016, ProSiebenSat.1 Media SE’s earnings of the financial year 2016 are only partly comparable to the previous financial year. In accordance with BilRUG, prior year’s figures have not been adjusted retrospectively. BilRUG changed the presentation of revenues, which has consequences for the corresponding presentation of expenses. To make the earnings comparable, a “2015 as per BilRUG” column has been included in the table above. This column shows previous year’s figures in accordance with the requirements of BilRUG. The following explanations regarding the profit situation are based on the comparison of the financial year 2016 and the adjusted values of the previous year. For further information on BilRUG, please refer to the comments in the Notes for ProSiebenSat.1 Media SE.

Revenues of ProSiebenSat.1 Media SE increased in financial year 2016 by EUR 7 million or 8 % to EUR 99 million. The year-on-year revenue growth resulted primarily from higher revenues from the sale of ancillary programming rights as well as revenues from barter transactions.

Other operating income fell by 24 % or EUR 21 million year-on-year to EUR 66 million. This development was mainly due to the decline in income from currency translation.

Operating expenses amounted to EUR 293 million (previous year: EUR 265 million). On the one hand, this was mainly due to EUR 30 million higher personnel expenses resulting from a significant increase in employee numbers and higher expenses from long-term incentive share-based payment plans. On the other hand, depreciation increased. This increase primarily resulted from a reduction of useful lives of installations and modifications due to the planned new construction of the office in Unterföhring. The decrease in other operating expenses was mainly due to lower expenses from currency translation.

Investment income, consisting of income from profit transfer agreements and expenses from loss absorption, decreased by 7 % or EUR 51 million to EUR 722 million. Income from profit transfer agreements of EUR 753 million (previous year: EUR 897 million) was partly offset by expenses from loss absorption of EUR 31 million (previous year: EUR 124 million).

In financial year 2016, the financial result (interest income netted against interest expenses) improved by EUR 3 million to minus EUR 78 million.

Tax expenses amounted to EUR 186 million in financial year 2016 compared to EUR 172 million in the previous year.

For financial year 2016, ProSiebenSat.1 Media SE reported a profit of the year of EUR 330 million which was 24 % or EUR 104 million below previous year.

ProSiebenSat.1 Media SE had no material off-balance-sheet financing instruments during the period under review.

ProSiebenSat.1 Media SE has concluded rental contracts for property at the Unterföhring site classified as operating leases according to the German Commercial Code (HGB). These contracts will not expire before 2019.

Net Assets of ProSiebenSat.1 Media SE

Balance sheet in accordance with German GAAP (HGB) — executive summary (Fig. 81)

 

 

 

 

 

EUR m

 

12/31/2016

 

12/31/2015

ASSETS

 

 

 

 

Intangible assets

 

4

 

1

Properties

 

53

 

56

Financial assets

 

6,201

 

5,638

Non-current assets

 

6,258

 

5,695

Receivables and other assets

 

1,092

 

1,162

Cash and cash equivalents

 

1,042

 

524

Current assets

 

2,134

 

1,686

Prepaid expenses

 

4

 

4

Active difference resulting from offsetting

 

0

 

0

Total assets

 

8,396

 

7,385

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

Equity

 

3,216

 

2,778

Provisions

 

159

 

91

Liabilities

 

4,998

 

4,500

Deferred tax liabilites

 

23

 

16

Total liabilities and equity

 

8,396

 

7,385

As of December 31, 2016, the total assets of ProSiebenSat.1 Media SE increased by 14 % or EUR 1,011 million to EUR 8,396 million.

Non-current assets increased by 10 % or EUR 563 million year-on-year to EUR 6,258 million as of December 31, 2016. The increase primarily resulted from capital increases at direct subsidiaries in the period under review.

On December 31, 2016, current assets amounted to EUR 2,134 million. The increase of 27 % or EUR 448 million was primarily due to the EUR 518 million rise in cash and cash equivalents. The cash inflows form the capital increase and the issuance of promissory notes of EUR 500 million were partly offset by the cash outflows for dividends and capital increases at direct subsidiaries. In addition, advance payments for programming assets increased by EUR 28 million. This was partially offset by the decline in intercompany receivables of EUR 97 million.

As of December 31, 2016, the equity of ProSiebenSat.1 Media SE increased to EUR 3,216 million. On the one hand, the increase by 16 % or EUR 438 million resulted from the profit of the year of EUR 330 million in the financial year 2016. On the other hand, the capital increase led to an inflow of EUR 515 million (before costs). However, this was partly offset by the dividend distribution of EUR 386 million in July 2016 and the cumulative effects of the change in the mode of settlement of the share-based payment arrangements from equity-settled to cash-settled. In the context of this change, EUR 30 million were reclassified from capital reserves to provisions.

As of December 31, 2016, the equity ratio remained unchanged at 38 %.

Provisions increased by EUR 68 million to EUR 159 million as of December 31, 2016. This was due to the EUR 45 million increase in personnel provisions mainly resulting from the change in the mode of settlement of share-based payment arrangements of EUR 30 million and the EUR 16 million increase in tax provisions.

Amounting to EUR 4,998 million, liabilities as of December 31, 2016, were EUR 498 million higher than the previous year’s figure of EUR 4,500 million. This development resulted mainly from the issuance of promissory notes of EUR 500 million and the EUR 70 million increase in trade accounts payable. In contrast, liabilities to affiliated companies decreased by EUR 75 million to EUR 1,416 million.

Financial Position of ProSiebenSat.1 Media SE

Cash management is performed centrally with Group cash flows being pooled by an implemented cash pooling system at ProSiebenSat.1 Media SE as the holding company. Therefore the cash flows of the Group affect the liquidity of ProSiebenSat.1 Media SE to a large degree.

For Group companies, especially the German TV stations, ProSiebenSat.1 Media SE acts as purchasing agent for programming assets. In financial year 2016, EUR 539 million (previous year: EUR 469 million) have been spent on investments in programming assets. ProSiebenSat.1 Media SE received EUR 509 million (previous year: EUR 486 million) from Group companies from the internal transfer of programming assets. As of December 31, 2016, the total future financial obligations from programming purchase agreements already concluded amounted to EUR 2,791 million (previous year: EUR 2,962 million).

In the period under review, cash outflows for purchases of tangible fixed assets at ProSiebenSat.1 Media SE amounted to EUR 17 million. This is a year-on-year increase of EUR 2 million.

For further information on the balance sheet and income statement, refer to the Notes to the Annual Financial Statements of ProSiebenSat.1 Media SE.

Development of Employee Numbers

In financial year 2016, on average 651 people were employed at ProSiebenSat.1 Media SE; 570 employees and 81 apprentices, trainees and interns. In the previous year, on average 564 people were employed at ProSiebenSat.1 Media SE, 79 of whom were apprentices, trainees and interns.

Risks and Opportunities

The business performance of ProSiebenSat.1 Media SE is fundamentally subject to the same risks and opportunities as that of ProSiebenSat.1 Group. ProSiebenSat.1 Media SE participates in the risks of its subsidiaries and investments in line with its respective ownership interest. The risks and opportunities are described in the Risk and Opportunity Report.

Outlook

Because of the interrelations between ProSiebenSat.1 Media SE and its subsidiaries, the outlook for ProSiebenSat.1 Group also largely reflects the expectations of ProSiebenSat.1 Media SE. The earnings development of ProSiebenSat.1 Media SE should remain in alignment with the development of the Group in the future, since the results of the subsidiaries will influence the investment result to a large degree. Therefore, the remarks in the Outlook also apply to ProSiebenSat.1 Media SE. We assume that the investment result will have a substantial influence on the profit of ProSiebenSat.1 Media SE.