Overall Assessment of the Business Performance - Management View

2016 marked another record year for ProSiebenSat.1 in which we achieved our profitability targets. However, 2016 was a successful year not only on the basis of growth figures. We also developed positively from a financial perspective, took advantage of financial market conditions and further optimized our capital structure. We remained within our target range for the leverage ratio. At the time the Group Management Report was compiled, ProSiebenSat.1 Group is characterized by overall very good earnings, financial position and performance.

The German economy continued to grow in 2016, which encouraged our advertising customers to invest. At the same time, the market data for our digital portfolio was very positive: The in-stream advertising, video-on-demand and digital commerce industries grew significantly. In this market environment, the Group closed 2016 with record figures for revenues and operating earnings figures once again. All segments contributed to this dynamic revenue performance.

Our TV business is highly profitable and is generating ongoing and solid growth. We have highlighted our leading position among viewers in a highly competitive environment and grown in the advertising market at the same time. In addition to the positive economic situation in Germany, we also benefited from ongoing structural changes on our core market, Germany. Many print customers are shifting their advertising budgets to television. At the same time, we invested in new markets and increased our reach via new digital platforms and also by launching another free TV station. Our successful M&A strategy, which focuses on synergies between TV and digital assets, has also strengthened the Group’s growth in the long term. For instance, we have tapped a new growth area with PARSHIP, a provider of online dating services. PARSHIP’s platforms already have leading market positions, but their success can be further increased with TV advertising. We are also growing profitably in the program production and distribution business: Red Arrow has established itself as an important driver of growth for the Group and is pressing ahead with its dynamic development, especially in the US, which is a strategically important market.

This positive annual record and the good start into the financial year 2017 confirm our strategy: We are transforming ProSiebenSat.1 from a traditional TV provider into an omnichannel entertainment & commerce brand powerhouse with a global presence.