Release Date: March 20, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- RTL Group SA (RGLXF, Financial) demonstrated resilience and achieved solid results in 2024 despite a challenging market environment, particularly in Germany.
- Streaming services continued to grow dynamically, with a 42% increase in streaming revenue and a significant reduction in start-up losses.
- The German family of TV channels increased its audience lead over competitors and maintained stable TV advertising revenue across the group.
- Fremantle, the global content business, reached a record result in 2024 with significant overhead reductions and improved operating margins.
- Strong cash flows enabled RTL Group SA (RGLXF) to propose an attractive dividend of EUR2.50 per share, representing an 83% payout ratio.
Negative Points
- The TV advertising markets in key territories like Germany and France were slightly down or flat, impacting overall revenue growth.
- Adjusted EBITA decreased to EUR722 million, mainly due to lower profit contributions from Groupe M6.
- The international market for content production was impacted by the 2023 US strikes and budget cuts from streaming services.
- The geopolitical and macroeconomic environment remains volatile, making the impact on RTL Group SA (RGLXF)'s business hard to predict.
- The planned sale of RTL Nederland is still under investigation by the Dutch Competition Authority, delaying the transaction closure.
Q & A Highlights
Q: Can you provide insights into the first quarter TV advertising environment in Germany?
A: Thomas Rabe, CEO, stated that the German TV advertising market was broadly stable in January and February, weaker in March due to Easter, and slightly stronger in April. RTL expects its advertising revenue to be flat for the full year, gaining market share despite a slightly down market.
Q: What is the rationale behind RTL Group's recent share purchases in M6?
A: Thomas Rabe explained that the opportunity arose because M6's audience share dropped below 8%, allowing RTL to increase its shareholding above 50% without a takeover bid. This move is seen as a good investment due to the low share price and is intended to cement RTL's control position.
Q: Why is there a margin gap between Fremantle and other production companies like Banijay?
A: Thomas Rabe noted that comparing margins is complex due to different accounting practices. Fremantle's EBITDA margin is 11.5%, and when adjusted for accounting differences, the margin gap with competitors is minimal. The exception is ITV Studios, which may have higher margins due to related party transactions.
Q: Could you provide updates on advertising trends in France, Hungary, and the Netherlands?
A: Bjorn Bauer, CFO, mentioned that France is expected to have broadly stable advertising revenues in Q1, while Hungary is expected to see an increase. The Netherlands was not specifically addressed due to the ongoing sale process.
Q: Has the EUR3 billion revenue target for Fremantle been pushed back?
A: Thomas Rabe confirmed the target has been delayed due to market dynamics and a selective approach to M&A. The focus has shifted to margin improvement, with AI expected to play a significant role in enhancing efficiency and profitability.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
