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The power of television
Half Year
Report 2006
The power of television
The ProSiebenSat.1 Media AG is the leading electronic media group
in Germany. We provide people with first-class entertainment and
comprehensive information - whenever they need it, wherever they
are.
Key Figures
Business Conditions
Group Performance
Segment Free TV
Diversification
Events Subsequent to the Reporting Period
Outlook
Explanatory Note
Financial Statements
Financial Calendar
Content
4
Key Figures
11
11
11
Business Conditions
13
13
14
14
15
15
16
16
16
16
Group Performance
18
19
20
21
22
Segment Free TV
24
24
24
Diversification
25
26
26
27
Outlook
31
Economic Conditions and the Advertising Market
The Industry
Revenues and Earnings
Expenses
Cash and Equivalents, and Cash flow
Balance Sheet Ratios
Net Financial Debt
Credit Rating
Share Performance
Employees
Research and Development
Sat.1
ProSieben
kabel eins
N24
Transaction TV Segment
Other Diversification Segment
Company Outlook
Programming Outlook
Explanatory Note
32
32
34
36
37
38
39
Financial Calendar
Consolidated Income Statement
Consolidated Balance Sheet
Cash flow Statement
Statement of Changes in Shareholders‘ Equity
Segment Report
3
Key Figures
Business Conditions
Group Performance
Segment Free TV
Diversification
Outlook
Explanatory Note
Financial Calendar
Key Figures for the ProSiebenSat.1 Group
Key balance sheet figures for the ProSiebenSat.1 Group
6/30/2006 6/30/2005
Change
EUR m
2,176.2
1,291.1
769.0
59%
11%
1,027.2
47%
47.2
EUR m
2,030.4
1,060.2
840.0
52%
11%
1,115.9
55%
392.5
7%
22%
-8%
14%
-/-8%
-14%
-88%
Q2 2006
Q2 2005
Change
380.3
421.6
-213.3
208.2
0.6
356.4
346.4
-409.3
-62.9
10.0
7%
22%
48%
431%
-94%
Q2 2006
Q2 2005
Change
Revenues
Gross profit
Operating profit
Financial loss
Pre-tax profit
Consolidated profit
EBITDA
EBIT
EBITDA margin
Pre-tax profit margin
Programming investments
Depreciation and amortization of intangible assets
and property, plant and equipment
550.9
225.3
144.9
-8.4
136.5
83.4
154.8
144.9
28%
25%
210.0
507.8
196.8
118.2
-1.0
117.2
71.7
126.6
118.0
25%
23%
242.6
8%
14%
23%
-740%
16%
16%
22%
23%
13%
7%
-13%
10.0
8.3
20%
Personnel expenses
Employees*
56.7
2,943
52.4
2,761
8%
7%
Total assets
Shareholders‘ equity
Liabilities
Equity ratio
Pre-tax return on equity
Programming assets
Programming assets of total assets
Net financial debt incl. bond
Key cash flow figures for the ProSiebenSat.1 Group
Cash flow
Cash flow from operating activities
Cash flow from investing activities
Free cash flow
Cash flow from financing activities
Key figures for the ProSiebenSat.1 Group
* Averaging full-time equivalent jobs
4
Key Figures
Business Conditions
Group Performance
Segment Free TV
Diversification
Outlook
Explanatory Note
Financial Calendar
Change
Q2 2006
Q2 2005
EUR m
EUR m
510.5
495.9
132.8
139.8
2,572
478.3
467.1
109.8
116.1
2,470
7%
6%
21%
20%
4%
Sat.1
Total revenues
Pre-tax profit
EBITDA
Employees*
231.1
65.1
64.4
254
208.5
43.4
43.8
220
11%
50%
47%
15%
ProSieben
Total revenues
Pre-tax profit
EBITDA
Employees*
192.0
51.4
51.7
262
192.3
58.9
58.8
262
-/-13%
-12%
-/-
kabel eins
Total revenues
Pre-tax profit
EBITDA
Employees*
66.6
20.1
20.4
52
55.7
13.5
13.4
46
20%
49%
52%
13%
N24
Total revenues
Pre-tax profit
EBITDA
Employees*
22.5
2.8
3.0
162
20.0
1.2
1.4
161
13%
133%
114%
1%
Segment Free TV
Total revenues
External revenues
Operating profit
EBITDA
Employees*
Key figures by station
5
Key Figures
Business Conditions
Group Performance
Segment Free TV
Diversification
Outlook
Explanatory Note
Financial Calendar
Q2 2006 June 2005
Change
EUR m
EUR m
22.7
22.3
3.7
5.9
96
8.4
8.2
1.2
2.3
42
170%
172%
208%
157%
129%
Q2 2006
Q2 2005
Change
38.2
32.7
8.6
9.5
275
33.6
32.5
7.1
7.9
249
14%
1%
21%
20%
10%
Key figures for Diversification
Segment Transaction TV
Total revenues
External revenues
Operating profit
EBITDA
Employees* / **
Segment Other Diversification
Total revenues
External revenues
Operating profit
EBITDA
Employees*
** 2005: average of Q2
6
Key Figures
Business Conditions
Group Performance
Segment Free TV
Diversification
Outlook
Explanatory Note
Financial Calendar
Key balance sheet figures for the ProSiebenSat.1 Group
6/30/2006 6/30/2005
Total assets
Shareholders‘ equity
Liabilities
Equity ratio
Pre-tax return on equity
Programming assets
Programming assets of total assets
Net financial debt incl. bond
Change
EUR m
2,176.2
1,291.1
769.0
59%
14%
1,027.2
47%
47.2
EUR m
2,030.4
1,060.2
840.0
52%
15%
1,115.9
55%
392.5
7%
22%
-8%
14%
-7%
-8%
-14%
-88%
H1 2006
H1 2005
Change
674.9
652.5
-468.7
183.8
-2.8
630.6
544.9
-639.2
-94.3
-165.2
7%
20%
27%
295%
98%
H1 2006
H1 2005
Change
1,016.1
368.4
206.0
-19.4
186.6
114.2
225.5
206.0
22%
18%
459.1
937.8
327.5
175.4
-11.1
164.3
100.3
190.8
174.8
20%
18%
465.6
8%
12%
17%
-75%
14%
14%
18%
18%
9%
-/-1%
19.5
15.4
27%
112.7
2,914
103.2
2,730
9%
7%
Key cash flow figures for the ProSiebenSat.1 Group
Cash flow
Free cash flow
Key figures for the ProSiebenSat.1 Group
Revenues
Gross profit
Operating profit
Financial loss
Pre-tax profit
Consolidated profit
EBITDA
EBIT
EBITDA margin
Pre-tax profit margin
Programming investments
Depreciation and amortization of intangible assets
and property, plant and equipment
Personnel expenses
Employees*
7
Key Figures
Business Conditions
Group Performance
Segment Free TV
Diversification
Outlook
Explanatory Note
Financial Calendar
H1 2006
H1 2005
Change
EUR m
EUR m
935.6
909.9
182.3
195.8
2,551
890.9
870.1
163.1
175.6
2,460
5%
5%
12%
12%
4%
Sat.1
Total revenues
Pre-tax profit
EBITDA
Employees*
425.2
97.9
98.0
255
395.4
62.9
65.1
219
8%
56%
51%
16%
ProSieben
Total revenues
Pre-tax profit
EBITDA
Employees*
348.1
58.8
58.6
262
384.7
84.8
84.1
260
-10%
-31%
-30%
1%
kabel eins
Total revenues
Pre-tax profit
EBITDA
Employees*
122.4
31.6
31.8
51
104.8
22.2
21.9
46
17%
42%
45%
11%
N24
Total revenues
Pre-tax profit
EBITDA
Employees*
42.8
4.7
5.0
161
39.9
3.7
4.1
159
7%
27%
22%
1%
Segment Free TV
Total revenues
External revenues
Operating profit
EBITDA
Employees*
Key figures by station
8
Key Figures
Business Conditions
Group Performance
Segment Free TV
Diversification
Outlook
Explanatory Note
Financial Calendar
H1 2006 June 2005
Change
EUR m
EUR m
48.9
48.1
10.4
14.7
97
8.4
8.2
1.2
2.3
21
482%
487%
767%
539%
362%
H1 2006
H1 2005
Change
68.7
58.1
13.7
15.4
266
61.0
59.4
10.9
12.6
249
13%
-2%
26%
22%
7%
Key figures for Diversification
Segment Transaction TV
Total revenues
External revenues
Operating profit
EBITDA
Employees* / **
Segment Other Diversification
Total revenues
External revenues
Operating profit
EBITDA
Employees*
** 2005: average of H1
9
Key Figures
Business Conditions
Group Performance
Segment Free TV
Diversification
Outlook
Explanatory Note
Financial Calendar
ProSiebenSat.1 Group boosts revenues and earnings in first half,
books strong second quarter
Group business performance in the first half of 2006
• Revenues up 8.3 percent, to EUR 1.016 billion
• Group EBITDA up 18.2 percent, to EUR 225.5 million
• Pre-tax profit up more than proportionally, by 13.6 percent, to EUR 186.6 million
• EBITDA margin and return on revenues reach high levels
• Consolidated net profit grows 13.9 percent to EUR 114.2 million
• Stations maintain high audience shares of 29.2 percent.
• Revenues and earnings up in all segments
• Higher advertising revenues push up revenues in Free TV core business
• Diversification unit profits from full consolidation of 9Live
• Outlook for full year continue to be positive
10
Key Figures
Business Conditions
Group Performance
Segment Free TV
Diversification
Outlook
Explanatory Note
Financial Calendar
Business Conditions
Audience share
Percent
Economic conditions and the
advertising market
ProSiebenSat.1 Group*
29.4
30.7
RTL
Growth prospects for the German economy improved
again in the second quarter of 2006. According to
the Ifo Institute’s business climate index, business
attitudes in June were the most positive since 1991.
Consumer spending also continued to improve during
the period. According to the GfK Consumer Index,
from January to May 2006 consumers spent about
3.8 percent more on fast-moving consumer goods
(FMCG) than in the same period last year. In fact, the
stronger inclination to spend actually boosted the GfK
consumer climate index to its highest value since the
end of 2001. Nevertheless, Germans are more skeptical
about the performance of the economy and their own
financial situation. Despite positive signals, conditions
in the labor market remained a problem.
The Industry
Gross statistics for the advertising market
The current improvement in the economy was also
evident in the advertising market. Statistics released
by the Nielsen Media Research institute indicate that
gross advertising spending for conventional media
grew to EUR 9.7 billion in the first half of 2006, a
gain of 5.6 percent from the same period last year.
The fastest growth rate was for telecommunications,
up 36.2 percent. But the financial sector (+10.8
percent), the media themselves (+8.1 percent), and
the automotive market (+5.1 percent) also showed
substantial increases. Once again, retail (total spend
EUR 927 million) and automotive (EUR 726 million)
were the largest advertisers.
The TV advertising market booked gross revenues
of EUR 3.9 billion in the first half of 2006. Gaining
3.9 percent, the TV market performed considerably
better than the same period a year earlier. This was
particularly the case for the two months before the
beginning of the soccer World Cup. TV advertising
spending rose 13 percent in April, and 15.3 percent
in May. But during the World Cup in June, the TV
advertising market declined 12 percent.
15.9
16.0
Sat.1
11.5
12.2
ProSieben
11.2
12.1
ARD
9.3
8.2
ZDF
8.3
7.5
ARD III
7.1
7.6
Vox
6.8
6.4
RTL2
5.9
6.7
kabel eins
5.5
5.5
N24
1.0
0.7
n-tv
0.6
0.6
9Live
0.0
0.2
5.0
10.0
15.0
20.0
25.0
30.0
H1 2006
H1 2005
Basis: All television households [Panel D+EU], viewers 14 to 49:
Source: AGF/GfK Fernsehforschung/pc#tv aktuell/
SevenOne Media
*Sat.1, ProSieben, kabel eins, N24, 9Live
Daily newspapers added 6.8 percent from January
through June, with a gross of EUR 2.6 billion. Generalinterest magazines gained 8.3 percent, and specialinterest magazines gained 8.9 percent. Billboards
gained 6.0 percent, while radio showed the slowest
growth of all the conventional media, 2.1 percent.
However, the gross figures offer no real foothold for
11
Key Figures
Business Conditions
Group Performance
Segment Free TV
Diversification
Outlook
Explanatory Note
Financial Calendar
direct conclusions about actual advertising revenues,
since they include not only self-promotion, but bulk
discounts and agency commissions.
ProSiebenSat.1 Group still the leader in the
advertising market
SevenOne Media, the ProSiebenSat.1 Group’s TV
marketer, had gross revenues of EUR 1.662 billion in
the first half of 2006. This is equivalent to a gross
share of 42.3 percent of the TV advertising market.
The stations marketed by IP Deutschland – RTL, Vox,
Super RTL and n-tv – generated EUR 1.512 billion, a
market share of 38.5 percent for the period. El Cartel,
which markets RTL2, had a 5.6 percent share.
Gross advertising revenues were particularly satisfying
at Sat.1 (+4.4 percent), kabel eins (+10.6 percent) and
N24 (+20.1 percent). ProSieben, by contrast, was down
(–7.1 percent). The figures placed Sat.1 and ProSieben,
with 20.0 percent and 15.7 percent, respectively, in
second and third places in the advertising market. With
a 0.3 percentage-point gain against the first half of
2005, kabel eins expanded its share of the advertising
market to 5.6 percent, to place fifth in the rankings,
alongside RTL2. N24 also improved during the period
(+0.1 percentage point), to hold a 0.8 percent share of
the advertising market.
12
Key Figures
Business Conditions
Group Performance
Segment Free TV
Diversification
Outlook
Explanatory Note
Financial Calendar
Group Performance
Revenues and earnings increase
The ProSiebenSat.1 Group has enjoyed a successful first half in 2006. The Company’s revenues grew
and earnings improved further for both the second
quarter of the year and the full first half. Both of the
company’s business units contributed to this positive
performance – the core business television, and the Diversification unit. Higher advertising revenues provided the main impetus for growth in the Free TV segment. Growth in the Diversification unit was partly organic, and partly the consequence of the full consolidation of 9Live as of June 1, 2005.
The Group’s revenues for the first half, at EUR 1.016 billion, outperformed the equivalent period last year by
EUR 78.3 million, or 8.3 percent. Group revenues for
the second quarter grew 8.5 percent, to EUR 550.9
million. The Diversification unit contributed a total of
EUR 106.2 million in revenues to the Group figure. This
is a relative share of 10.5 percent – up 45.8 percent
from the unit’s contribution to Group revenues in the
first half of last year (H1 2005: 7.2 percent). A major
contributor here was quiz station 9Live, which brought
in EUR 48.1 million in revenues to the Group.
The net financial expense for the first half of 2006 widened by EUR 8.3 million, to EUR –19.4 million, compared to EUR –11.1 million the year before. This is mainly the consequence of a one-time effect last year. In
the first half of 2005, the Group received income of
EUR 9.2 million from a purchase price hedge agreement relating to the acquisition of Euvia. Additionally, the full consolidation of 9Live since June 2005 has
caused net incomes from associated companies to de-
cline in the half-on-half comparison. The figure for the
prior-year period was commensurately higher by EUR
1.9 million than the figure for the first half of 2006.
The full acquisition of 9Live also reduced income from
loans to affiliates by EUR 2.5 million.
Although the Group’s total costs were up and other
operating income was down, the operating profit for
the first half gained 17.4 percent, to EUR 206.0 million.
The change is the result of revenue growth against last
year, which also had a positive effect on pre-tax profits. Pre-tax profits gained 13.6 percent, to reach EUR
186.6 million. EBITDA for the same period also performed well, rising 18.2 percent to EUR 225.5 million. The
profitability figures reflected the rise in earnings by
climbing to high levels. The EBITDA margin maintained
the trend from the prior year, rising to 22.2 percent
(H1 2005: 20.3 percent). The return on revenues grew
to 18.4 percent (H1 2005: 17.5 percent). The consolidated net profit rose 13.9 percent to EUR 114.2 million.
The resulting earnings per preferred share are EUR
0.53, following on EUR 0.47 for the first half of 2005.
The quarter-on-quarter comparison is even better.
High revenues and an optimized cost structure helped
operating earnings to climb 22.6 percent in the second
quarter, to EUR 144.9 million. EBITDA rose EUR 28.2
million to EUR 154.8 million, and the EBITDA margin
rose from 24.9 percent to 28.1 percent. The Group’s
pre-tax profit for April through June was EUR 136.5
million, 16.5 percent above the comparable period last
year. The second quarter contributed EUR 0.39 to earnings per preferred share, compared to EUR 0.34 a
year ago.
Pre-tax profit
Group revenues
EUR m
EUR m
186.6
1,016.1
164.3
937.8
0
250
H1 2006
H1 2005
500
750
1000
0
50
H1 2006
100
150
200
H1 2005
13
Key Figures
Business Conditions
Group Performance
Segment Free TV
Diversification
Outlook
Explanatory Note
Financial Calendar
Costs rise moderately
The ProSiebenSat.1 Group’s operating costs rose moderately for both the first half and the second quarter of 2006. The increase in total costs for the half,
by EUR 46.1 million or 6.0 percent, to EUR 815.7 million, resulted almost entirely from the consolidation of
9Live. Another contributor was a slight increase in the
consumption of programming assets.
These effects also appear in the cost structure for the
second quarter. For this period, total operating costs
came to EUR 408.7 million, up EUR 16.2 million, or 4.1
percent, against the comparable period last year.
In the first half of 2006, administrative expenses
rose 0.8 percent, to EUR 65.0 million. The cost of sales amounted to EUR 647.7 million for January-June
2006. Consumption of programming assets accounted for EUR 477.0 million of this figure, following the
equivalent period’s EUR 452.4 million. Scheduled consumption rose EUR 21.2 million, to EUR 445.9 million,
while unscheduled consumption was up EUR 3.4 million, to EUR 31.1 million. The total cost of sales gained 6.1
percent, or EUR 37.4 million. Selling costs also picked
up in the half-on-half comparison, to EUR 103.0 million, following on EUR 94.8 million for the equivalent
period last year.
Other operating income for the first half of 2006
amounted to EUR 5.5 million, down EUR 1.7 million
from last year’s equivalent.
Cash and equivalents, and cash flow
Cash and equivalents as of June 30, 2006, were EUR
338.6 million, compared to EUR 80.3 million as of
June 30, 2005, and EUR 157.6 million as of December
31, 2005. Cash produced by operating activities for the
first six months was EUR 652.5 million, up 19.7 percent
from the prior year figure (EUR 544.9 million). The increase in operating cash flow from a year earlier results from not only improved profitability, but a slower increase in working capital (non-interest-bearing
receivables less non-interest-bearing liabilities) during
the period.
Cash used in investing activities was EUR 468.7 million
for the first half. The prior year’s higher figure of EUR
639.2 million was significantly influenced by expenditures for the full acquisition of 9Live in June 2005.
Another reason for the decrease in cash used in investing activities during the period was lower expenditures for programming assets. These investments decreased EUR 6.5 million, to EUR 459.1 million, for the
first half. For the above reasons, free cash flow for the
period rose EUR 278.1 million, to EUR 183.8 million.
Movie power at ProSieben:
„Men in Black II“
©2003 Sony Pictures Television
International
14
Key Figures
Business Conditions
Group Performance
Segment Free TV
Diversification
Outlook
Explanatory Note
Financial Calendar
Financing activities used cash of EUR 2.8 million, compared to EUR 165.2 million last year. The high figure
for the first half of 2005 was in part the result of the
dividend payment in May of that year. It also reflects
last year’s repayment of bonds.
Solid balance sheet ratios
The Group’s total assets grew in the first half of 2006,
and the equity ratio rose to a high level. Total assets
gained 7.2 percent against the end of the second half
of 2005, to reach EUR 2.176 billion as of June 30,
2006. The Company’s balance sheet ratios as of the
closing date were solid, with an equity ratio of 59.3
percent.
The increase in total assets was due mainly to a higher figure for cash and equivalents (cash on hand, credit balances at banks), which rose EUR 258.3 million to
reach EUR 338.6 million as of June 30, 2006.
On the equity and liabilities side, the consolidated balance sheet showed equity of EUR 1.291 billion as of
June 30 of this year. Most of the change against last
year of 21.8 percent, or EUR 230.9 million, was the result of the Group’s substantially better profits, as well
as the fact that this year’s dividend payment will not
take place until the third quarter.
Long-term liabilities shrank EUR 216.9 million, to EUR
312.1 million; long-term financial liabilities in particular
were down EUR 196.5 million. By contrast, short-term
interest-bearing liabilities rose EUR 109.3 million. This
contrary motion was the result of the early retirement
of bonds as of July 31, 2006, and the associated shortening of maturities.
Net financial debt down further
Net financial debt was down even further as of June
30, 2006, to EUR 47.2 million, compared to EUR 392.5
million a year earlier.
Most of the substantial 88.0 percent reduction in net
financial debt is the result of the change in credit balances with banks, including cash on hand. This figure rose significantly during the period to reach EUR
338.6 million on June 30, 2006, compared to EUR
80.3 million a year earlier. A further reason was lower
bank debt, which decreased 67.5 percent during the
period, from EUR 132.6 million to EUR 43.1 million.
ProSiebenSat.1 Media AG had two corporate bond issues on the market during the period, with par values
of EUR 150 million and EUR 200 million, and respective maturities of May 2009 and July 2009. The total
bond volume to be reported under IFRS changed only
slightly for the period, and came to EUR 342.9 million
on June 30, 2006, compared to EUR 340.6 million a
year earlier. In June 2006, the ProSiebenSat.1 Group
decided to exercise its right to buy back the EUR 200
million bond issue and retire it in advance of its original maturity of July 2009. The company bought back
this bond effective July 31, 2006, and will thus repay it
in full during the third quarter of the current year.
Credit rating
On March 13, 2006, the Moody’s rating agency upgraded the outlook for ProSiebenSat.1 from Ba1, Outlook
Developing, to Ba1, Outlook Positive. Since June 9,
2006, the Moody’s rating has been Ba1, Outlook Stable. Fitch Ratings upgraded its rating for ProSiebenSat.1
on June 7, 2006, from BBB–, Outlook Positive, to BBB,
Outlook Stable.
Share performance
The generally positive performance of the stock markets in the first quarter of 2006 continued into midApril. In the second half of the month, the DAX reached
its highest level since 2001, at 6,128 points. The stock
markets began to come under heavy pressure in May.
Concerns about inflation and interest rates caused prices to decline significantly, confirming an old traders’
axiom: “Sell in May and go away.” Rising oil prices and
the conflict with Iran prolonged the downtrend into
June. Beginning in mid-month, better economic figures and the strengthening dollar brought a substantial
recovery. The DAX closed at just under 5,700.
ProSiebenSat.1 stock was an outperformer during the
period, gaining 19.4 percent. It closed at EUR 19.53 on
June 30, 2006. Its high for the half was EUR 22.96
on May 8, while the low was EUR 16.02 on January 3.
15
Key Figures
Business Conditions
Group Performance
Segment Free TV
Diversification
Outlook
Explanatory Note
Financial Calendar
In the first quarter, the stock’s performance was significantly influenced by the planned takeover of the
company by Axel Springer AG. In the second quarter,
the price was significantly driven by solid business figures. Despite the weak market in May and June, the
stock remained stable and closed at a high level. Its
total trading volume for the period was 78,019,434
shares, equivalent to an average trading volume of
about 614,326 shares per day.
Group has 2,914 employees
ProSiebenSat.1 share: Price performance
Index
160
140
St
120
M
DA
The ProSiebenSat.1 Group had a workforce averaging
2,914 full-time equivalent employees in the first half of
2006. The figure for the comparable period of 2005
was 2,730, making the new figure a 6.7 percent gain.
The increase in employees resulted primarily from the
expansion of capacity at the Group’s subsidiaries Producers at Work, wetter.com, and SevenSenses. Personnel expenses for the period grew 9.2 percent, from
EUR 103.2 million to EUR 112.7 million.
Research and development
The ProSiebenSat.1 Group is the leader in the German
TV advertising market. This strong position has inspired the Company with the ambition to be a leader in
innovation and in opinion-shaping as well. A special
research unit at marketing subsidiary SevenOne Media constantly studies and evaluates the latest developments in the audience market and the advertising
market. This ensures that the ProSiebenSat.1 Group
will also recognize trends promptly in the future, identify growth fields, and further expand its position as
Germany’s leading TV corporation. Research results
on advertising, target audiences, media and programming also offer an important basis for decisions about
acquiring rights, station scheduling, and pursuing marketing efforts.
Additionally, the Group’s marketing subsidiary Seven
One Media views itself as a service provider that supports its clients in deciding on how to invest in television and online advertising. Its assistance is based on
extensive research that furnishes all the requisite information about scheduling, monitoring options, and
the impact of advertising carried on TV and over the
Internet.
Pr
100
80
3.1
31.12.
30.9.
30.6.
ProSiebenSat.1 Euro Stoxx Media MDAX DAX
Basis: Xetra closing quotes. An Index of 100 = January 3, 2005.
Source: Bloomberg
The Group also invests in new technologies, with ongoing research into where technologies will go next.
This allows the ProSiebenSat.1 Group to tap early into
new fields that can reach a broad public and offer greater value for the television audience. The aim is to
make the Group stations’ fine programming available to viewers even more conveniently, to take advantage of additional distribution channels, and to make
the most of consumers’ new media usage habits.
New cooperative ventures in Q2 2006
In the first quarter of 2006, the ProSiebenSat.1 Group
had already signed IPTV agreements for Germany with
T-Online and Telefónica. In May, the Group continued
its innovation campaign in Internet TV (IPTV). A contract with HanseNet Telekommunikation GmbH now
enables the Group’s stations to be carried over this
telecommunications provider’s DSL cable network,
which is known under the “Alice” brand. IPTV is another building block of the Group’s “triple play world.”
The aim is to use new distribution channels to expand
services, and to offer the Group’s stations over all networks currently available – cable and satellite, digital
terrestrial (DVB-T) and DSL cable.
16
Key Figures
Business Conditions
Group Performance
Segment Free TV
Diversification
Outlook
Explanatory Note
Financial Calendar
ProSiebenSat.1 Group the leader in Mobile TV
The ProSiebenSat.1 Group is the German market leader in Mobile TV. It is currently represented with more
than ten channels and an extensive range of on-demand services available from a variety of mobile telephone operators. Viewers can watch current information or entertainment programming on their cell phones, wherever and whenever they like.
Users can receive mobile television via the Digital Multimedia Broadcasting (DMB) standard. Since Mobile TV
via DMB started regular operation in Germany on June
1 of this year, the ProSiebenSat.1 Group has been offering two TV channels here. Anyone who has the right
cell phone can pick up news channel N24 and a special
entertainment channel, with comedy shows from ProSieben and Sat.1 – mobile and live.
An additional transmission standard is DVB-H (Digital
Video Broadcasting – Handheld). The Group has applied in several regions for appropriate frequencies on
which to broadcast its stations digitally.
ProSiebenSat.1 Group taps Pay TV market
The pay TV market offers new opportunities for the
ProSiebenSat.1 Group to leverage its strong Free TV
brands into new sources of revenue, and thus to expand the Diversification unit. Since July 1, 2006, the
Group offers two Pay TV channels in Germany, with
two channels: kabel eins classics and Sat.1 Comedy.
The first, kabel eins classics, concentrates on classic
films and series. Sat.1 Comedy shows films and comedy programming, from Sat.1 and ProSieben. Both channels are available as part of the digital basic pay packages from cable operators Kabel Deutschland, Unity
Media and Kabel BW.
The Group also offers a broad range of German-language TV programming for subscribers abroad. ProSiebenSat.1 Welt shows a selection of the best from Sat.1,
ProSieben, kabel eins and N24. The international Pay
TV channel made its debut in the United States in February 2005, and went on the air in Canada this past
June.
17
Key Figures
Business Conditions
Group Performance
Segment Free TV
Diversification
Outlook
Explanatory Note
Financial Calendar
Segment Free TV
The Free TV segment is where the ProSiebenSat.1
Group conducts its core business. This segment consolidates four of the Group’s stations (Sat.1, ProSieben, kabel eins and N24), the Sat.1 regional companies,
marketing company SevenOne Media, the subsidiary
ProSiebenSat.1 Produktion, and the Group’s subsidiaries in Austria and Switzerland.
The Group’s core business television generated total
revenues of EUR 935.6 million for the first half, compared to EUR 890.9 million a year earlier – a gain of
5.0 percent. The segment’s externally generated revenues were up 4.6 percent, from EUR 870.1 million to
EUR 909.9 million. Television revenues for the second
quarter rose as much as 6.7 percent. Compared to
EUR 478.3 million for the second quarter of last year,
the segment brought in revenues of EUR 510.5 million this year. The segment’s externally generated revenues were up 6.2 percent on the quarter, from EUR
467.1 million to EUR 495.9 million. Most of the revenue increase came from advertising, where revenues
for April and May in particular were up from the prioryear values.
Operating earnings and EBITDA also performed well
for the half and the second quarter – the second quarter was particularly good. The operating profit for the
first half of 2006 rose 11.8 percent, from EUR 163.1
million to EUR 182.3 million. EBITDA for the half grew
11.5 percent against the first half of last year, from
EUR 175.6 million to EUR 195.8 million. Second-quarter operating earnings grew 20.9 percent, from EUR
109.8 million to EUR 132.8 million. EBITDA was up 20.4
percent, from EUR 116.1 million to EUR 139.8 million.
Audience shares feel impact of major sports
events
In the first half, the Group’s combined audience share
was 29.2 percent (H1 2005: 30.5 percent). Sat.1, ProSieben, kabel eins and N24 earned a combined share
of 28.3 percent for the second quarter (Q2 2005: 30.9
percent). As expected, the two major sporting events
in the first half of 2006 had an impact on overall results. The Winter Olympics in Turin affected February
shares. And the delirium surrounding the soccer World
Cup in Germany lowered audience shares in June
(June 2006: 24.2 percent; June 2005: 30.7 percent).
In this, the Group’s stations were part of the general
trend in June. The other private stations’ shares also
slipped. Even RTL, in Cologne, which carried World
Cup matches for the first three Sundays and thus was
able to profit from the country’s football fever, saw its
share slide 0.6 percentage points in June (June 2006:
15.0 percent; June 2005: 15.6 percent).
By contrast, the audience shares of ARD (June 2005:
8.9 percent; June 2006: 14.3 percent) and ZDF (June
2005: 7.9 percent; June 2006: 12.6 percent) picked up
substantially in June. Yet even the public stations felt
the exceptional effects of the World Cup. Both ARD’s
and ZDF’s shares plunged on days when there were
no soccer matches, while ProSiebenSat.1 Group stations returned to their customary levels on days with
no game broadcasts. All figures refer to the key demographic between the ages of 14 and 49.
N24: Covering great events live for its viewers
18
Key Figures
Business Conditions
Group Performance
Segment Free TV
Diversification
Outlook
Explanatory Note
Financial Calendar
David or Rokko?
In the grand finale of the Sat.1
telenovela „Verliebt in Berlin“
on September 1, 2006 Lisa
Plenske’s fate will be decided.
Sat.1 continues successful course
Sat.1 remained on its successful course for both the second quarter and the full half. First-half revenues rose
to EUR 425.2 million, up EUR 29.8 million, or 7.5 percent, against the prior-year figure. Pre-tax earnings
and EBITDA were up even more sharply. Pre-tax income gained 55.6 percent, to reach EUR 97.9 million.
EBITDA climbed 50.5 percent to EUR 98.0 million, following EUR 65.1 million in the first half of 2005. Most
of this vigorous rise in profits came from increased revenues. But lower costs also helped out. The station’s
high profitability and earning power are reflected in
the EBITDA Margin, which rose to 23.0 percent in the
first half, compared to 16.5 percent a year earlier.
earnings before taxes came to EUR 65.1 million, a 50.0
percent gain. EBITDA also rose sharply, to EUR 64.4
million, compared to EUR 43.8 million a year earlier.
The EBITDA Margin for the second quarter was 27.9
percent, compared to the prior-year period’s 21.0 percent.
In the second quarter, the station boosted its revenues 10.8 percent, to EUR 231.1 million. Compared to
EUR 43.4 million for the second quarter of last year,
Sat.1 earned an audience share of 11.5 percent in the
first half of 2006 (H1 2005: 12.2 percent). The station’s
second-quarter share was 11.0 percent (Q2 2005: 12.6
percent). Sat.1 earned above-average shares in the second quarter with the UEFA Champions League finals
between FC Barcelona and FC Arsenal London (second half: 29.9 percent). The free TV premiere of Sönke Wortmann’s “The Miracle of Bern” drew 27.0 percent of the 14-to-49 demographic. The reliable hit telenovela “Verliebt in Berlin” (H1 2006: up to 27.4 percent) turned in a convincing performance in the second quarter, not only in its familiar early-evening slot
Sat.1: Revenue development
Sat.1: Pre-tax profit
EUR m
EUR m
425.2
97.9
395.4
0
100
H1 2006
H1 2005
200
300
62.9
400
0
20
H1 2006
40
60
80
H1 2005
19
Key Figures
Business Conditions
Group Performance
Segment Free TV
Diversification
Outlook
Explanatory Note
Financial Calendar
„Final Destination 2“: first class movies and series from Hollywood on ProSieben
at 7:15, but with two prime-time broadcasts that earned shares as high as 23.3 percent. The licensed U.S.
series “Navy CIS” set a new record for its run on Sat.1,
drawing shares of up to 22.2 percent. The station also
scored with feature films like “Sister Act 2: Back in the
Habit” (17.6 percent) and “Kick It Like Beckham” (17.7
percent). The improv comedy “Schillerstrasse” remained a steady ratings favorite, earning shares up to
22.0 percent.
ProSieben revenues stabilize in
second quarter
Revenues at ProSieben were down 9.5 percent for the
first half, from EUR 384.7 million to EUR 348.1 million,
mostly as a result of a EUR 28.1 million decline in internal sales of programming assets, to EUR 11.8 million. The decrease is also a consequence of last year’s
weaker ratings, which are showing their impact only
this year. The pre-tax profit on the first half was EUR
58.8 million, 30.7 percent below last year’s equivalent.
The decline in revenues for the half also pulled EBITDA
down, by 30.3 percent, to EUR 58.6 million. The EBITDA Margin was 16.8 percent, compared to 21.9 percent
for the first half last year.
© Warner Bros. Television
A quarter-on-quarter comparison shows that
ProSieben’s improved performance this year is beginning to have a positive effect on revenues. The station booked revenues of EUR 192.0 million for the second quarter, compared to EUR 192.3 million a year
earlier. But net income for April through June of this
year was still below the prior-year equivalents. Pre-tax
earnings were down 12.7 percent to EUR 51.4 million,
while EBITDA declined 12.1 percent to EUR 51.7 million.
The Q2 EBITDA Margin was 26.9 percent, compared to
30.6 percent a year earlier.
ProSieben’s audience share was 11.2 percent for the
first half (H1 2005: 12.1 percent). The station’s secondquarter share was 11.0 percent (Q2 2005: 12.1 percent).
The wider variety of feature films on Sunday evenings ensured strong ratings, with such offerings as
“Men in Black II” (23.5 percent), “Star Wars: Episode
II – Attack of the Clones” (21.4 percent), “Final Destination 2” (24.2 percent), “Blade II” (23.1 percent) and
“Black Hawk Down” (20.2 percent). ProSieben also
turned Wednesdays into a high-ratings day for films,
with blockbusters like the original “Star Wars” (16.4
percent) and “Mission Impossible” (16.0 percent). The
station also scored with a stronger afternoon schedule, showing a distinct uptrend in the time of day between 1:00 and 6:00 p.m., despite the World Cup. The
ProSieben: Pre-tax profit
ProSieben: Revenue development
EUR m
EUR m
58.8
348.1
84.8
384.7
0
100
H1 2006
H1 2005
200
300
400
0
20
H1 2006
40
60
80
H1 2005
20
Key Figures
Business Conditions
Group Performance
Segment Free TV
Diversification
Outlook
Explanatory Note
Financial Calendar
On kabel eins, Crime Friday
guarantees great ratings with
top series, such as „Without a
Trace“.
extended magazine show “We are Family!” drew up to
22.3 percent, the U.S. series “Sabrina” drew as much
as 15.0 percent, and “Charmed” drew as much as 18.8
percent. Another magazine show, “taff.”, also increased its share, booking as much as 19.7 percent.
The knowledge-show genre also scored well with viewers. Aiman Abdallah’s daily “Galileo” show (up to 15.4
percent) enjoys a loyal following, and his special
prime-time editions also did very well, including “Galileo-Spezial: Die Päpstin – Mythos oder Wahrheit?”
(22.3 percent).
Revenues and earnings up at kabel
eins
First-half revenues at kabel eins were up 16.8 percent
to EUR 122.4 million, as the station continues to perform well. Better programming performance and good
market acceptance lent important momentum to the
station’s success. The station’s pre-tax income for the
first half was EUR 31.6 million, 42.3 percent above the
comparable period last year. EBITDA grew 45.2 percent, to EUR 31.8 million. The increase in EBITDA Margin from 20.9 percent to 26.0 percent represents a
24.4 percent gain against the prior-year figure.
The station not only grew its revenues in the second
quarter, but increased both EBITDA and pre-tax income. Compared to EUR 55.7 million for the second
quarter of last year, kabel eins brought in revenues of
EUR 66.6 million this year. Pre-tax earnings and EBITDA for the second quarter were also up against last
year’s equivalents, at EUR 20.1 million (Q2 2005: EUR
13.5 million) and EUR 20.4 million (Q2 2005: EUR 13.4
million). The EBITDA Margin for the second quarter
climbed to 30.6 percent, compared to the prior-year
period’s 24.1 percent.
kabel eins: Pre-tax profit
kabel eins: Revenue development
EUR m
EUR m
31.6
122.4
22.2
104.8
0
30
H1 2006
H1 2005
60
90
120
0
10
H1 2006
20
30
40
H1 2005
21
Key Figures
Business Conditions
Group Performance
Segment Free TV
Diversification
Outlook
Explanatory Note
Financial Calendar
N24: high quality talk shows like „Was erlauben Strunz?“ are a big
success for Germany’s No. 1 news channel station.
percent. On weekdays, “ClipCharts” earned ratings of
up to 6.3 percent in the second quarter.
Revenues and audience shares rise at
N24
In terms of audience shares, kabel eins held steady in the first half at 5.5 percent (H1 2005: 5.5 percent). The station’s second-quarter share was 5.2 percent (Q2 2005: 5.4 percent). “Die besten Filme aller
Zeiten,” major events, new magazine, and light entertainment shows, and top-notch series drew enthusiastic audiences. The “Queen” event evening attracted
10.1 percent of the 14-49 audience, and the “Naturgewalt!” event on tornadoes scored 7.7 percent. The station also earned high ratings in information and magazine shows: its new “Abenteuer Leben – täglich Wissen” knowledge magazine, with Christian Mürau, earned shares as high as 8.2 percent. Crime Friday did extremely well, with new seasons of “Cold Case” (up to
10.2 percent), “Without a Trace” (up to 10.6 percent)
and “Missing” (up to 9.4 percent), as well as the first
showings of “King of Queens,” with up to 14.5 percent.
“Quiz Taxi” has been traveling the streets of prime access on kabel eins since April, with shares of up to 6.6
First-half revenues were up substantially at N24, too,
rising a total of EUR 2.9 million, or 7.3 percent, to EUR
42.8 million. Both pre-tax earnings and EBITDA increased proportionally to revenues. Pre-tax earnings grew
EUR 1.0 million against the first half of 2005, to EUR
4.7 million. EBITDA was up EUR 0.9 million, to reach
EUR 5.0 million for the half. The EBITDA Margin for the
first six months was 11.7 percent, compared to the prior-year period’s 10.3 percent.
The station performed very well in the second quarter.
Compared to EUR 20.0 million for the second quarter
of last year, the station brought in revenues of EUR
22.5 million from April to June of this year, a 12.5 percent gain. Pre-tax income for the second quarter was
up 133.3 percent against the equivalent period last
year, to EUR 2.8 million. EBITDA grew 114.3 percent,
to EUR 3.0 million. The second-quarter EBITDA Margin
rose from 7.0 percent to 13.3 percent.
N24’s audience shares clearly remained on track for
success for both the second quarter and the half.
Germany’s leading news station gained a significant
N24: Pre-tax profit
N24: Revenue development
EUR m
EUR m
4.7
42.8
3.7
39.9
0
10
H1 2006
H1 2005
20
30
40
0
2
H1 2006
4
6
8
H1 2005
22
Key Figures
Business Conditions
Group Performance
Segment Free TV
Diversification
Outlook
Explanatory Note
Financial Calendar
0.3 percentage points for the quarter, to reach 1.1 percent (Q2 2005: 0.8 percent). The first-half figure was
also up a considerable 0.3 percentage points, to 1.0
percent (H1 2005: 0.7 percent). The second-quarter
share was the best quarterly figure in the station’s
history. N24 was particularly successful in the earlymorning time of day from 6 to 9 o’clock, an especially important period for news stations. With current
stock market reports, news from around the world,
and prominent guests in the studio, the Berlin station
earned steadily rising audience shares in both the second quarter and the half. The second-quarter share
for the early-morning time of day climbed 0.6 percentage points in the second quarter, to an average of 2.0
percent.
23
Key Figures
Business Conditions
Group Performance
Segment Free TV
Diversification
Outlook
Explanatory Note
Financial Calendar
Diversification
The ProSiebenSat.1 Group’s Diversification unit pools
the Group’s activities that are not directly connected
with TV advertising. The major revenue drivers here
are Transaction TV and operations in multimedia and
merchandising. By continuously expanding its Diversification activities, the Group further reduced its dependency on the advertising market in the first half of
2006. In addition to organic growth, the full consolidation of 9Live also strengthened the unit significantly.
Transaction TV segment
The revenue engine of the Transaction TV segment is
quiz station 9Live. 9Live is Germany’s leading brand
for interactive TV, and generates most of its revenues
from telephone calls. The ProSiebenSat.1 Group has
fully consolidated 9Live since June 1, 2005.
In January through June of 2006, 9Live contributed
EUR 48.1 million to the Group’s total revenues. Its contribution to revenues for June 2005 was EUR 8.2 million. In all, the Transaction TV segment generated revenues of EUR 48.9 million; the figure for June 2005 was
EUR 8.4 million. The segment’s operating earnings for
the first half were EUR 10.4 million (June 2005: EUR
1.2 million). EBITDA reached EUR 14.7 million, compared to EUR 2.3 million for June 2005. (In the first half
of 2005, the station was fully consolidated only for the
month of June.)
These initial consolidation effects also had an impact
on revenue and earnings performance in the second
quarter of the current year. 9Live’s contribution to
Group revenues for the quarter reached EUR 22.3 million (June 2005: EUR 8.2 million). The segment’s total
revenues for April through June 2006 were EUR 22.7
million (Q2 2005: EUR 8.4 million), and operating earnings were EUR 3.7 million (Q2 2005: EUR 1.2 million).
Quiz station 9Live earned a 0.2 percent share of the
audience between the ages of 14 and 49 for both the
second quarter and the entire first half. The station’s
share for the equivalent period last year was likewise
0.2 percent.
Other Diversification segment
Except for 9Live, all subsidiaries of ProSiebenSat.1 Media whose revenues are not directly related to TV advertising are pooled in the Other Diversification segment. These include SevenOne Intermedia, MM MerchandisingMedia, SevenOne International, SevenSenses and ProSiebenSat.1 Welt.
The Other Diversification segment contributed EUR
58.1 million in revenues to the Group for the half, compared to EUR 59.4 million for the first half of 2005.
This is equivalent to a moderate decrease of 2.2 percent, most of which resulted from a reallocation of
revenues to 9Live within the Diversification unit as
a whole, because of the station’s consolidation as of
June 2005. The change was already evident in the
first quarter of 2006. The segment booked total revenues of EUR 38.2 million for the second quarter,
following on EUR 33.6 million for the same period of
2005. The contribution to Group revenues for the pe-
Not only viewers are winners at Germany’s first quiz station 9Live.
24
Key Figures
Business Conditions
Group Performance
Segment Free TV
Diversification
Outlook
Explanatory Note
Financial Calendar
riod came to EUR 32.7 million, up from the prior year’s
equivalent of EUR 32.5 million.
Important revenue drivers in the Other Diversification
segment during the period were again the established
multimedia operations of SevenOne Intermedia and
the licensing business at Merchandising Media.
Events subsequent to the
reporting date
ProSiebenSat.1 Media AG increases proposed
dividend
In February 2006, ProSiebenSat.1 Media AG announced that it would propose to the Annual Meeting
a dividend of EUR 0.44 per share of preferred stock,
and EUR 0.42 per share of common stock. On June
6, 2006, the Executive Board and Supervisory Board
increased this proposed dividend. At that time it was
clear that no major acquisitions would be planned for
the foreseeable future, making more funds available
for distribution. The revised proposed dividend is EUR
0.84 per share of preferred stock and EUR 0.82 per
share of common stock. This is equivalent to a payout
ratio of 82 percent of the consolidated net profit of
EUR 221.6 million for 2005, or EUR 181.6 million.
Holders of preferred stock received a dividend of EUR
0.30 per share for fiscal 2004, and holders of common
stock received EUR 0.28 per share. In all, 47 percent
of the 2004 consolidated net profit of EUR 133.7 million, or EUR 63.5 million, was distributed in dividends.
The dividend resolution will be put to the vote at the
2006 Annual Meeting of the shareholders of ProSiebenSat.1 Media AG on August 2, 2006, in Munich.
“maxdome” video-on-demand portal makes
debut
On July 27, 2006, the ProSiebenSat.1 Group launched
the “maxdome” video-on-demand portal in a strategic cooperative venture with United Internet AG. “maxdome” allows the Group to mine yet another level of
economic benefits from its programming. Video on demand is a whole new market for the company.
“maxdome” offers an extensive range of films, comedies and series. In addition to Hollywood films, it
also offers successful shows from Sat.1, ProSieben, kabel eins and N24. Viewers can download content either under a package subscription or as streaming video under a pay-per-view option. The content can be
used for 24 hours. “maxdome” is accessible both via a
broadband connection on a PC and from a set-top box
on a conventional television.
Over 50 new shows presented at “The Big
Picture 2006”
At its third German programming launch event, “The
Big Picture 2006,” the ProSiebenSat.1 Group and its
marketing company, SevenOne Intermedia, presented
the schedules of Sat.1, ProSieben, kabel eins and N24
for the upcoming 2006-2007 season. At this key client
event at Düsseldorf’s Tonhalle on July 27, SevenOne
Media offered 1,600 representatives from the advertising industry a first look at more than 50 new programs that the broadcasting group will be carrying
this fall and next year. The new shows ranged from comedies and major TV films to new series and political
talk shows on current events.
In addition to pay TV and new programming, The Big
Picture 2006 also presented one more premiere for
the advertising market: Visible World. Beginning with
the first quarter of 2007, advertising clients will be
able to customize their digitally produced spots and
respond flexibly to varying conditions. A second step
is planned for 2008 – regionalization of TV advertising.
ProSiebenSat.1 Group retires bond issue early
On June 27, 2006, ProSiebenSat.1 Media AG announced that it would retire a EUR 200 million bond issue early, effective July 31, 2006. The bond issue was
placed in July 2002, at a fixed interest rate of 11.25
percent, and was to mature in July 2009. In conformity with the bond terms and conditions, the redemption price for early retirement of the bonds on July 31,
2006, was 105.625 percent of the par value.
25
Key Figures
Business Conditions
Group Performance
Segment Free TV
Diversification
Outlook
Explanatory Note
Financial Calendar
On August 1, Dr. Marcus Englert joined the Executive Board at
ProSiebenSat.1 Media AG. He will be responsible for Diversification.
ding has risen. And according to a survey, consumer
confidence is higher than it has been at any time in the
past five years. A variety of indicators, such as the Ifo
business climate index, suggest that the upswing will
continue in the second half.
Dr. Marcus Englert joins Executive Board at
ProSiebenSat.1 Media AG
Effective August 1, 2006, Dr. Markus Englert was appointed as the new Executive Board member in charge
of Diversification at ProSiebenSat.1 Media AG. He becomes a fourth member of the formerly three-member Board, and will hold his new position while still remaining the managing director of SevenOne Intermedia. He has been managing director at SevenOne Intermedia since 2001, and additionally the ProSiebenSat.1
Group’s Diversification Director since 2004.
Creating a new Diversification area as a matter for direct responsibility of the Executive Board is another
indication of the strategic importance that the Group
attaches to its new business models, and especially to
digital TV services.
Outlook
Company Outlook
Though it is still impossible to say for sure how the
German TV market will evolve during the rest of the
year, current economic conditions are generally positive. The mood of the German economy has improved
significantly since the year began. The economic research institutes have revised their forecasts upward.
After last year’s slack performance, consumer spen-
But for the ProSiebenSat.1 Group, the critical factor
is how overall economic growth will affect the TV advertising market. The ZAW – Germany’s national advertising association – anticipates that the advertising
market in Germany as a whole will grow 2 percent. The
World Advertising Research Center (WARC) expects
net growth of 2.2 percent for the advertising market, and ZenithOptimedia expects 1.8 percent. Based
on present knowledge, the ProSiebenSat.1 Group assumes that net spending on television advertising will
grow about 2 percent this year. That would mean the
TV advertising market would perform about the same
as the German economy is expected to do as a whole.
Developments in the second half of July and in August
suggest that business conditions in the TV advertising
industry are picking up again, after the pause for the
World Cup. If that trend continues, the German TV advertising market still could have further potential in
2006. A more accurate projection will not be possible
until the beginning of October.
Despite this year’s major sports events, the ProSiebenSat.1 Group is aiming to achieve slightly aboveaverage growth in advertising revenues. The growth
rate for the Group’s total revenues will be between
four and five percent, assuming growth of two percent
in the TV advertising market. Alongside growth in the
core business TV, the Group’s new business models in
the Diversification unit and the new acquisition, 9Live,
will provide for these gains. The Group’s still rigorous
cost control will mean that profits will also improve.
Activities in Diversification – the Internet, merchandising, licensing, music, added-value telephone services,
26
Key Figures
Business Conditions
Group Performance
Segment Free TV
Diversification
Outlook
Explanatory Note
Financial Calendar
mobile services – can be expected to perform better
than average again this year. 9Live will build further
on its effective business model as an interactive
brand. Above and beyond its own programming, 9Live
also produces a variety of call TV shows for Sat.1, ProSieben and kabel eins, and thus generates additional
revenues for the other stations.
Following the launch of the pay TV channels Sat.1 Comedy and kabel eins classics in Germany, and the extension of the reach of the international pay TV channel ProSiebenSat.1 Welt, in the second half the media
corporation will also begin tapping the video on demand market with “maxdome.” In such a setting, the
Group is well positioned to increase the contribution
to revenues from Diversification activities once again,
and to draw about 12 percent of consolidated revenues
from its new business models by year’s end.
As expected, the excitement surrounding the soccer
World Cup in Germany had an adverse impact on the
Group’s audience shares in June. The Group also held
no rights for the Winter Olympics in February. As a result, the Group’s stations will not be able to increase their audience share for 2006 as a whole. But
the Group expects to maintain its position at around
30 percent of the key demographic between the ages
of 14 and 49.
The ProSiebenSat.1 Group is going into the second half
of the year with an attractive line-up of programs to
strengthen its position as Germany’s leading TV corporation.
Programming outlook
Sat.1
Following the 90-minute finale “Verliebt in Berlin –
Das Ja-Wort” with Alexandra Neldel, to be shown on
Sat.1 at 8:15 p.m. on September 1, 2006, the hit telenovela “Verliebt in Berlin” will start a new story line on
September 4, with a new star, Tim Sander. At the end
of August, in the early-evening slot at 6:45, a new telenovela, “Schmetterlinge im Bauch,” will debut with
Alissa Jung and Raphaël Vogt in the leads. The new
show will fill out the new Sat.1 telenovela hour in prime access. Starting in mid-August, the station will be
trying a new track in Sunday prime time: the licensed
U.S. series “Navy CIS,” which earned consistently rising ratings and audience shares as high as 22.2 percent on Thursday evenings over the past few months,
will premiere in its new slot at 8:15 Sunday evenings.
Next, at 9:15 p.m., will be “Criminal Minds,” an exciting
and lavishly produced new U.S. series that has drawn
up to 20 million viewers in the United States. Under
its new “Sat.1 Montagsmovie” banner, every Monday
evening the station will be showing top-notch film entertainment made in Hollywood. Tuesdays beginning
in mid-August, immediately after the “Grosser Sat.1
Film,” the licensed series “Commander-in-Chief” (retitled “Welcome, Mrs. President”), starring Oscar winner Geena Davis, will provide another very promising
chance for entertainment. The new family documentary “Hilfe! Zu Hause sind die Teufel los”, with host
Barbara Eligmann, will debut in July, followed at the
end of August by the new documentary series “Wie die
Wilden – Deutsche im Busch,” which follows three German families’ stays with tribes living traditional lifestyles in Togo, Indonesia and Namibia. On Thursdays,
“Schillerstrasse” will still be the mainstay for outstan-
„Schmetterlinge im Bauch“, Sat.1’s new telenovela will wow viewers from September 4.
27
Key Figures
Business Conditions
Group Performance
Segment Free TV
Diversification
Outlook
Explanatory Note
Financial Calendar
Top quality inhouse productions such as „Tornado“ have made ProSieben a leader in the genre.
ding comedy – and Cordula Stratmann will return to
the show in September.
ProSieben
ProSieben is better prepared than ever for the 20062007 TV season. Starting this fall, series fans will enjoy a strong schedule on ProSieben. Mondays will be
treats for those who like mysteries, with new episodes
of “Lost” and a whole new series, “Invasion.” Tuesday
evening series are especially for women. Wisteria Lane
will yield up the latest dramas in the lives of “Desperate Housewives,” the final season of “Charmed” will
cast its spell, and on “Grey’s Anatomy,” young doctors
will do their best to make sure that their own fluttering
hearts don’t interfere with their patients’ survival. Saturdays, ProSieben will be focusing more on contests
and other light entertainment: following “Extreme Activity” with Jürgen von der Lippe, in September Oliver Pocher will host “Die grossen ProSieben-Bundesjugendspiele.” Stefan Raab will show up in “Schlag den
Raab.” Other entertainment highlights will include new
episodes of “Die ProSieben-Märchenstunde” and “Bully & Rick.” On Thursdays, ProSieben will be seeking for
the successors of No Angels on “Popstars.” An extraordinary two-part event on ProSieben this September
will be the teamworx production “Tornado.” Anyone
who enjoys movies will have a fine time on ProSieben
this fall: the September line-up includes “Bad Boys II”
with Will Smith, “xXx” with Vin Diesel, “The Transporter,” “I Spy,” “The Crimson Rivers 2,” and “S.W.A.T.”
Later in the year, the schedule will include “Pirates of
the Caribbean – The Curse of the Black Pearl,” “The
Matrix Revolutions,” “Der Wixxer,” “Kill Bill, Vol. 1” and
“(T)Raumschiff Surprise.”
„Commander in Chief“: Geena
Davis stars as the first female
President of the US on Sat.1.
28
Key Figures
Business Conditions
Group Performance
Segment Free TV
Diversification
Outlook
Explanatory Note
Financial Calendar
ProSieben IS cinema: with blockbusters like „Pirates of the Carribbean“ in the autumn.
kabel eins
Along with its time-tested, popular classics, kabel eins
will have a strong line-up of current series, free TV
premieres, and new light entertainment shows and
events again in the third quarter of 2006. Since July,
the station’s special-reports series “Mein neues Leben” has tracked German emigrants as they make the
change to another country. Starting August 2, kabel
eins will add a new prime time attraction on Wednesdays, with the German TV premiere of “Ghost Whispe-
© Disney/ Jerry Bruckheimer
rer,” the hit US mystery series with Jennifer Love Hewitt, and (starting August 16) “Buffy the Vampire Slayer.” Viewers can also look forward to new episodes of
the hit sitcom “King of Queens” – on prime time for the
first time, starting at the end of August. The station’s
successful “Crime Fridays” will also be bringing the
German premieres of new episodes in September. And
at 8:15 p.m. beginning the evening of September 13, on
the new comedy panel show “Darf man das?,” Ingolf
Lück will look at the lighter side of the law, with witty
court decisions and scurrilous legislation.
N24
In the third quarter of 2006, N24 will expand both its
business and stock-market reporting and its line-up
of talk shows. The new program “Make Money – Die
Markus Frick Show” offers a unique new way of conveying stock-market know-how. Markus Frick will show
how viewers can put their money to work better. The
Jennifer Love Hewitt has a special take on the mysteries of the beyond:
from August on kabel eins.
29
Key Figures
Business Conditions
Group Performance
Segment Free TV
Diversification
Outlook
Explanatory Note
Financial Calendar
„Make Money – The Markus
Frick Show“ will turn viewers
into stock exchange pros.
station will also be expanding its successful line-up of
talk shows. The new political talk show “Links-Rechts”
will join the station’s line-up of “Was erlauben Strunz,”
“Studio Friedman” and “Arabella Kiesbauer” during
the third quarter. Political pundits Hajo Schumacher
and Hans-Hermann Tiedje will debate current topics of
the week with a guest, on a show where opinions will
run strong and polarization will be encouraged.
30
Key Figures
Business Conditions
Group Performance
Segment Free TV
Diversification
Outlook
Explanatory Note
Financial Calendar
Explanatory Note
Notes to the Q2 2006 interim report of
The consolidated interim report was prepared in compliance with the International Financial Reporting
Standards of the International Accounting Standards
Board (IASB) that were in effect on the reporting date,
June 30, 2006. All applicable readings and interpretations of the International Financial Reporting Interpretations Committee (IFRIC) up to that date have been
applied, as has IAS 34 (“Interim Financial Reporting”).
During the period covered by this interim report, there
were no changes in accounting principles from those applied in the annual financial statements as of December 31, 2005.
This report contains forward-looking statements that
reflect the current views of the management of ProSiebenSat.1 Media AG regarding future events. These
forward-looking statements include any statement
in this report that reproduces or is founded upon intentions, expectations or predictions of the company.
These statements are based on plans, estimates, and
projections currently available to the management of
ProSiebenSat.1 Media AG. They therefore refer only
to the date on which they are made. Forward-looking
statements are inherently subject to risks and uncertainties (for example, owing to future developments
in the German advertising market) that may cause actual outcomes to differ materially from such forwardlooking statements or the results they imply. ProSiebenSat.1 Media AG assumes no obligation to update
such statements to reflect new information or future
events, nor does it intend to provide such updates.
31
Key Figures
Business Conditions
Group Performance
Segment Free TV
Diversification
Outlook
Explanatory Note
Financial Calendar
Consolidated income statement for ProSiebenSat.1 Media AG
Change Change in %
Q2 2006
Q2 2005
Revenues
550,875
507,818
2.
Cost of sales
-325,543
-311,071
14,472
5%
3.
Gross profit
225,332
196,747
28,585
15%
4.
Selling expenses
-49,329
-48,443
886
2%
5.
Administrative expenses
-33,849
-33,025
824
2%
6.
Other operating income
2,719
2,960
-241
-8%
7.
Operating profit
144,873
118,239
26,634
23%
8.
Expenses due to transfer of losses
-100%
9.
Income from securities and loans of financial assets
10.
EUR k
1.
43,057
8%
-/-
-452
-452
38
1,032
-994
-96%
Income from equity interests in associated companies
1,588
365
1,223
335%
11.
Write-downs of financial assets and current securities
-/-
-227
-227
-100%
12.
Net interest and similar income
43%
13.
Net interest and other expenses
14.
Income from financial instruments
15.
Other financial expenses
16.
Financial loss
17.
Income from ordinary business activities
18.
19.
1,730
1,212
518
-11,028
-11,519
-491
-4%
-/-
9,213
-9,213
-100%
-693
-635
58
9%
-8,365
-1,011
-7,354
-727%
136,508
117,228
19,280
16%
Income taxes
-51,910
-45,087
6,823
15%
Consolidated profit
84,598
72,141
12,457
17%
83,429
71,654
11,775
16%
1,169
487
682
140%
attributable to
Shareholders of ProSiebenSat.1 Media AG
Minorities
EUR
Basic and diluted earnings per share of common stock according to IAS 33 *
0.38
0.32
0.06
19%
Basic and diluted earnings per share of preferred stock according to IAS 33 *
0.39
0.34
0.05
15%
* thereby accounted for net profit for the period: 83.4 EUR m [previous period: 71.7 EUR m]; thereby accounted for
number of common and preferred shares: 218,797 thousand [previous year: 218,797 thousand]
32
Key Figures
Business Conditions
Group Performance
Segment Free TV
Diversification
Outlook
Explanatory Note
Financial Calendar
Consolidated income statement for ProSiebenSat.1 Media AG
H1 2006
H1 2005
1,016,141
937,775
Change Change in %
EUR k
1.
Revenues
78,366
8%
2.
Cost of sales
-647,745
-610,315
37,430
6%
3.
Gross profit
368,396
327,460
40,936
13%
4.
Selling expenses
-102,950
-94,806
8,144
9%
5.
Administrative expenses
-65,008
-64,458
550
1%
6.
Other operating income
5,512
7,184
-1,672
-23%
7.
Operating profit
205,950
175,380
30,570
17%
8.
Expenses due to transfer of loss
9.
Income from securities and loans of financial assets
10.
-/-
-452
-452
-100%
43
2,523
-2,480
-98%
Income from equity interests in associated companies
1,540
3,421
-1,881
-55%
11.
Write-downs of financial assets and current securities
-/-
-594
-594
-100%
12.
Net interest and similar income
13.
Net interest and other expenses
14.
Income from financial instruments
15.
Other financial expenses
16.
Financial loss
-19,350
17.
Income from ordinary business activities
186,600
18.
Income taxes
-70,962
19.
Consolidated profit
2,411
2,211
200
9%
-22,034
-25,997
-3,963
-15%
-/-
9,213
-9,213
-100%
-1,310
-1,391
-81
-6%
-11,066
-8,284
-75%
164,314
22,286
14%
-63,213
7,749
12%
115,638
101,101
14,537
14%
114,161
100,340
13,821
14%
1,477
761
716
94%
Basic and diluted earnings per share of common stock according to IAS 33 *
0.52
0.45
0.07
16%
Basic and diluted earnings per share of preferred stock according to IAS 33 *
0.53
0.47
0.06
13%
attributable to
Shareholders of ProSiebenSat.1 Media AG
Minorities
EUR
* thereby accounted for net profit for the period: 114.2 EUR m [previous period: 100.3 EUR m]; thereby accounted for
number of common and preferred shares: 218,797 thousand [previous year: 218,797 thousand]
33
Key Figures
Business Conditions
Group Performance
Segment Free TV
Diversification
Outlook
Explanatory Note
Financial Calendar
Consolidated balance sheet of ProSiebenSat.1 Media AG
ASSETS
EUR k
6/30/2006 6/30/2005
Change 12/31/2005
Change
A. Noncurrent assets
I.
Intangible assets
327,417
329,994
-2,577
329,772
-2,355
230,634
237,703
-7,069
235,664
-5,030
4,895
3,332
1,563
3,864
1,031
IV. Programming assets
247,305
230,920
16,385
253,596
-6,291
V. Accounts receivable
and other long-term
assets
2,463
4,484
-2,021
3,298
-835
II. Property, plant and
equipment
III. Financial assets
VI. Deferred taxes
6,155
14,560
-8,405
-/-
6,155
818,869
820,993
-2,124
826,194
-7,325
779,931
884,969
-105,038
803,888
-23,957
5,453
6,062
-609
4,473
980
III. Accounts receivable
and other short-term
assets
233,124
237,724
-4,600
222,019
11,105
IV. Marketable securities
258
359
-101
2,446
-2,188
338,563
80,321
258,242
157,556
181,007
1,357,329
1,209,435
147,894
1,190,382
166,947
2,176,198
2,030,428
145,770
2,016,576
159,622
B. Current assets
I.
Programming assets
II. Inventories
V. Cash, cash at bank
Total assets
34
Key Figures
Business Conditions
Group Performance
Segment Free TV
Diversification
Outlook
Explanatory Note
Financial Calendar
LIABILITIES AND SHAREHOLDERS‘ EQUITY
EUR k
6/30/2006 6/30/2005
Change 12/31/2005
Change
A. Shareholders‘ equity
I.
Subscribed capital
II. Capital reserves
III. Group equity generated
IV. Accumulated other
Group equity
V. Minority interests
218,797
218,797
-/-
218,797
-/-
580,719
579,284
1,435
579,965
754
500,839
266,079
234,760
386,678
114,161
-8,867
-2,857
-6,010
4,224
-13,091
-411
-1,067
656
-1,915
1,504
1,291,077
1,060,236
230,841
1,187,749
103,328
188,717
385,165
-196,448
382,658
-193,941
B. Noncurrent liabilities
I.
Long-term financial
liabilities
II. Provisions
4,888
17,309
-12,421
6,521
-1,633
III. Other liabilities
118,460
126,531
-8,071
123,046
-4,586
IV. Deferred taxes
-/-
-/-
-/-
450
-450
312,065
529,005
-216,940
512,675
-200,610
197,291
87,995
109,296
4,577
192,714
111,185
112,909
-1,724
49,701
61,484
264,580
240,283
24,297
261,874
2,706
573,056
441,187
131,869
316,152
256,904
2,176,198
2,030,428
145,770
2,016,576
159,622
C. Current liabilities
I.
Short-term financial
liabilities
II. Provisions
III. Other liabilities
Total liabilities and
shareholders‘ equity
35
Key Figures
Business Conditions
Group Performance
Segment Free TV
Diversification
Outlook
Explanatory Note
Financial Calendar
ProSiebenSat.1 Group cash flow statement
EUR k
H1 2006
H1 2005
Consolidated profit
114,161
100,340
Depreciation, amortization and impairment/write-ups of noncurrent and current assets
19,508
15,078
477,523
452,418
61,004
68,755
354
-1,491
1,616
-5,279
Consumption/write-ups of programming assets
Change in tax provisions (incl. change in deferred taxes)
Change in other provisions
Result from equity accounting and other noncash relevant changes within financial assets
Result from sale of fixed assets
-35
-48
Other noncash income/expenses
754
863
674,885
630,636
Cash flow
Change in inventories
-980
-1,074
Change in non-interest-bearing receivables and other assets
-8,082
-40,225
Change in non-interest-bearing liabilities
-13,297
-44,415
652,526
544,922
Proceeds from disposal of noncurrent assets
Expenditures for intangible assets and property, plant and equipment
Expenditures for purchase of financial assets
Proceeds from disposal of programming assets
Expenditures for programming assets
Effects of changes in scope of consolidation and other changes in equity
Free cash flow
Dividend
157
2,409
-12,205
-9,826
-2,687
-1,550
3,735
3,632
-459,121
-465,641
1,387
-168,238
-468,734
-639,214
183,792
-94,292
-/-
-63,451
Change of interest-bearing liabilities
-2,785
-101,705
-2,785
-165,156
181,007
-259,448
Change in cash and cash equivalents
Change in scope of consolidation in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents as of June 30
-/-
45,034
157,556
294,735
338,563
80,321
-47,582
-41,826
-17,314
-27,577
2,294
1,432
The cash flow from operating activities includes the following receipts and payments according to IAS 7:
Cash flow from income taxes
Cash flow from interest expenses
Cash flow from interest income
36
Key Figures
Business Conditions
Group Performance
Segment Free TV
Diversification
Outlook
Explanatory Note
Financial Calendar
Statement of changes in shareholders‘ equity of the ProSiebenSat.1 Group for First Half 2005
EUR k
Subscribed
capital
Capital Group equity
reserves
generated
Accumulated other
Group equity
Minority
interests
Shareholders‘
equity
1,334
1,004,103
-63,451
Valuation
Foreign
from cash
currency
translation flow hedges
adjustment
December 31, 2004
218,797
578,421
229,190
-135
-23,504
Dividends paid
-/-
-/-
-63,451
-/-
-/-
-/-
Changes in scope of consolidation
-/-
-/-
-/-
-/-
-/-
-3,162
-3,162
Other changes
-/-
863
-/-
-9
20,791
-/-
21,645
Consolidated profit
June 30, 2005
-/-
-/-
100,340
-/-
-/-
761
101,101
218,797
579,284
266,079
-144
-2,713
-1,067
1,060,236
Statement of changes in shareholders‘ equity of the ProSiebenSat.1 Group for First Half 2006
EUR k
Subscribed
capital
Capital Group equity
reserves
generated
Accumulated other
Group equity
Minority
interests
Shareholders‘
equity
-1,915
1,187,749
Valuation
Foreign
from cash
currency
translation flow hedges
adjustment
December 31, 2005
218,797
579,965
Other changes
-/-
754
Consolidated profit
-/-
-/-
218,797
580,719
500,839
June 30, 2006
386,678
-250
4,474
-/-
-116
-12,975
27
-12,310
114,161
-/-
-/-
1,477
115,638
-366
-8,501
-411
1,291,077
37
Key Figures
Business Conditions
Group Performance
Segment Free TV
Diversification
Outlook
Explanatory Note
Financial Calendar
Segment reporting of the ProSiebenSat.1 Group
EUR k
Revenues
Free TV
Transaction TV
Other
Diversification
Transitions
Total
consolidated financial
statement
H1 2006
935,576
48,877
68,738
-37,050
1,016,141
External revenues
909,899
48,122
58,120
-/-
1,016,141
Internal revenues
25,677
755
10,618
-37,050
-/-
Operating profit
182,286
10,390
13,652
-378
205,950
EBITDA
195,836
14,679
15,407
-464
225,458
Transaction TV
Other
Diversification
Transitions
Total
consolidated financial
statement
H1 2005
Segment reporting of the ProSiebenSat.1 Group
EUR k
Free TV
Revenues
890,879
8,413
61,002
-22,519
937,775
870,110
8,238
59,427
-/ -
937,775
External revenues
20,769
175
1,575
-22,519
-/-
Operating profit
Internal revenues
163,060
1,158
10,881
281
175,380
EBITDA
175,586
2,309
12,644
280
190,819
38
Key Figures
Business Conditions
Group Performance
Segment Free TV
Diversification
Outlook
Explanatory Note
Financial Calendar
Financial Calendar
Finanzkalender
Press Conference/IR Conference
Preliminary Figures 2005
Februar 21, 2006
Quarterly Report January to March 2006
Mai 11, 2006
Annual Shareholders‘ Meeting
August 2, 2006
Interim Report January to June 2006
August 2, 2006
Nine-Month Report January to September 2006
November 9, 2006
Contact
Press
Unternehmenskommunikation
Medienallee 7
85774 Unterföhring
Tel. +49 [89] 95 07 – 1 1 64
Fax +49 [89] 95 07 – 911 64
Investor Relations
Medienallee 7
85774 Unterföhring
Tel. +49 [89] 95 07 – 15 02
Fax +49 [89] 95 07 – 15 21
Imprint
Published by
Medienallee 7
85774 Unterföhring
Tel. +49 [89] 95 07 – 10
Fax +49 [89] 95 07 – 11 22
HRB 124 169 AG München
Conception and Content
Corporate Office
Design
Corporate Office
Share Information
Medienallee 7
85774 Unterföhring
Tel. +49 [8000] 777 117
Fax +49 [89] 95 07 – 15 21
E-mail: [email protected]
Internet
www.ProSiebenSat1.com
39

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