Overall Assessment of the Opportunity and Risk Situation — Management View

The digital development opens up growth prospects for all of our segments. However, the media industry is subject to constant market change and intense competition, not least as a result of global digitalization. Therefore, the identification and management of potential opportunities is just as important for our Group as the recognition and controlling of potential risks. ProSiebenSat.1 Group has effective control systems to deal with risks early and consistently. We estimate that there are no risks for either year covered by the forecast that, individually or in combination with other risks, could have a material or lasting adverse effect on the earnings, financial position and performance. The identified risks pose no threat to the Company as a going concern, even looking into the future. As of the date of the preparation of this report, therefore, the Executive Board still considers the overall risk situation as limited and manageable. There has been no fundamental change in the overall risk situation compared to December 31, 2015; we still rate the majority of the issues presented in the latest Annual Report as low risk. The overall opportunity situation has not changed either.

ProSiebenSat.1 Group is the market leader in the German TV market, successfully uses its high reach as an investment currency, and is adding value by expanding its value chain with digital offers in all segments. Our digital business developed dynamically and profitably in 2016 and its contribution to revenues is expected to increase by EUR 1.7 billion by 2018. We are also diversifying our value chain with the sale and production of programming content. At the same time, we are recording solid growth in the free TV business and anticipate a EUR 375 million increase in revenue in the Broadcasting German-speaking segment in the medium term. The Company is thus characterized by a broad revenue base.