Business Development of the Segments
- The Broadcasting German-speaking segment is growing profitably with a constantly high margin of 33.0 %.
- The Digital Entertainment segment is developing positively and dynamically in strategically relevant business areas.
- The Digital Ventures & Commerce segment is again the Group’s most important revenue driver. Acquisitions are complementing the commerce portfolio with added value.
- The Content Production & Global Sales segment accelerated its profitable growth.
Broadcasting German-speaking Segment
In the financial year 2016, external revenues in the Broadcasting German-speaking segment increased to EUR 2,210 million. This equates to an increase of 3 % or EUR 58 million compared to the previous year. The positive revenue development is based on higher TV advertising revenues, which increased both in the core market of Germany and in Austria and Switzerland. In addition, distribution revenues continued to rise dynamically. The distribution of TV stations in HD quality and via mobile streaming providers made a particular contribution to the revenue growth here.
Revenue growth with efficient cost management led to a rise in the earnings figures: Recurring EBITDA adjusted for reconciling items increased by 3 % to EUR 760 million (previous year: EUR 734 million). The recurring EBITDA margin remained constantly high at 33.0 %. EBITDA increased by 4 % or EUR 31 million to EUR 747 million. This reflects the high level of profitability of the TV business.
Digital Entertainment Segment
In the Digital Entertainment segment, external revenues increased by 19 % to EUR 442 million (previous year: EUR 371 million). In the financial year 2016, the ad video-on-demand (ad VoD) business developed dynamically due to acquisitions, while the advertising-financed multi-channel network (MCN) Studio71 contributed the highest amount to revenue growth. Moreover, the Group developed its expertise in the area of digital advertising technology in the second half of 2015 by acquiring the companies SMARTSTREAM.TV and Virtual Minds. In addition, the revenues of the pay VoD offering maxdome are increasing. In contrast, revenues from the Adjacent business developed below the previous year’s level as expected. At the same time, revenue performance was characterized by the deconsolidation of the Games business at the end of the second quarter of 2016.
The acquisitions also affected cost development. Furthermore, the individual business areas have different margin structures and growth momentum, resulting in recurring EBITDA of EUR 37 million, at the level of the previous year (previous year: EUR 37 million). The corresponding recurring EBITDA margin decreased to 7.9 % (previous year: 9.8 %). By contrast, EBITDA increased by 25 % or EUR 7 million to EUR 37 million as a result of income adjustments. This occurred within the context of portfolio measures.
Digital Ventures & Commerce Segment
In the financial year 2016, external revenues in the Digital Ventures & Commerce segment increased significantly to EUR 768 million. This equates to an increase of 65 % or EUR 303 million compared to the previous year. Due to acquisitions, the strongest revenue drivers were the travel and commerce activities. Here, the online travel portal etraveli and the online comparison portal Verivox made the highest contributions to growth. Moreover, ProSiebenSat.1 Group established another successful commerce vertical last year with Beauty & Accessories. In the reporting period, the online perfume shop Flaconi primarily contributed to organic revenue growth here.
As the individual business areas have different revenue dynamics and cost structures, the recurring EBITDA margin decreased to 23.0 % (previous year: 28.8 %). However, recurring EBITDA adjusted for reconciling items increased by a dynamic 33 % to EUR 180 million (previous year: EUR 136 million). EBITDA likewise grew by double digits: It increased by 37 % or EUR 46 million to EUR 168 million.
Content Production & Global Sales Segment
In the Content Production & Global Sales segment, external revenues increased by 38 % or EUR 99 million to EUR 362 million. In addition to the initial consolidation of 44 Blue Studios in July 2016, Dorsey Pictures and Karga Seven Pictures contributed to revenue growth. Revenues also increased organically, with the US production company Left/Right making the biggest contribution to growth. The distribution business also had a positive impact: In October, Red Arrow licensed exploitation rights for the crime series “Bosch” to companies of Amazon Group.
Due to the significant increase in revenues, key operating earnings figures also grew dynamically: Recurring EBITDA increased by 87 % or EUR 22 million to EUR 47 million. As a result, the recurring EBITDA margin improved considerably to 11.2 % (previous year: 7.9 %). EBITDA likewise grew by double digits, doubling to EUR 44 million (previous year: EUR 22 million).