Business Activities and Segments

Corporate Profile and Market Position

ProSiebenSat.1 Group is one of the most successful and most diversified media companies in Europe. Advertising-financed free TV is ProSiebenSat.1 Group’s core business. Here, the Group is a leading player on the German TV market. At the same time, ProSiebenSat.1 Group is one of Germany’s leading video marketers on the Internet and one of the most successful providers of digital entertainment in German-speaking Europe.

Our aim is to offer viewers and users entertainment on all screens and thus to serve various media usage interests. However, digitalization is not only influencing and increasing video use. Instead, the Internet is now firmly integrated into our everyday lives and has changed our entire behavior as consumers. This is why ProSiebenSat.1 Group has invested in leading digital commerce platforms in recent years, which are suitable for marketing on our channels. This entertainment and commerce portfolio is supplemented by an international production and distribution network under the umbrella of Red Arrow Studios. Red Arrow Studios produces entertainment content for TV broadcasters and digital platforms around the world, both for the ProSiebenSat.1 stations and for third-party providers.

On this basis, ProSiebenSat.1 Group will continue to make selective investments — in the Group’s programming, in expanding our data activities and in digital platforms. In doing so, we aim to strengthen our position as one of Europe’s leading entertainment and commerce companies and to remain the number one choice for our audiences and clients going forward.

ProSiebenSat.1 Group’s largest revenue market is Germany, where it also has its main headquarters. The Group also runs TV stations in Austria and Switzerland. Red Arrow Studios is internationally established; an overview of the production and distribution network with all relevant sales markets and locations can be found below and Notes page 256.

Segments and Brand Portfolio

The digital transformation is under way at a rapid pace and offers us new growth opportunities for all of our segments. ProSiebenSat.1 Group is therefore promoting digitalization throughout the Group and diversifying the portfolio with commerce offerings that complement the entertainment profile. Part of this strategy is the dovetailing of the business areas. We laid the foundation for strong Group synergies in 2018 by bundling TV and digital entertainment offerings in one segment. Since then, the Group has reported in the three segments of Entertainment, Content Production & Global Sales and Commerce.

Entertainment segment: ProSiebenSat.1 Group offers best entertainment – whenever, wherever and on any device. We are able to reach 45 million TV households in Germany, Austria and Switzerland with our 14 free and stations. At the same time, the Group has a monthly reach of around 34 million with its marketed online offerings.

Shows such as “Germany’s next Topmodel” and “The Voice of Germany” are successful formats with which we delight audiences on TV and via digital offerings. At the same time, the Company is investing in the fields of and data in order to generate additional revenues with innovative, data-driven offerings and to customize advertising ever more precisely. ProSiebenSat.1 Group thus offers the advertising industry added value. The two sales subsidiaries SevenOne Media GmbH and SevenOne AdFactory GmbH support advertising customers and agencies by finding ideas and concepts and implementing them across platforms on TV, online and via mobile devices.

This range is also reflected in the Entertainment segment, which includes the TV Broadcasting, TV and Online Marketing, Distribution, Advertising Platform Solutions (AdTech), SevenVentures and Digital Platforms businesses.

Content Production & Global Sales segment: In this segment, ProSiebenSat.1 Group combines the international TV production and distribution business with the global digital studio Studio71 under the umbrella of Red Arrow Studios. Thanks to this tight bundling of know-how in the areas of program distribution and production, the Group benefits from synergies and has access to talents as well as platforms in the digital sector via digital studio Studio71. This is an important competitive advantage to meet the growing demand for content on all channels. In 2018, Studio71 achieved an average of 9.2 billion video views per month.

Shows such as “Bosch”, “Married at First Sight” and “Germany’s next Topmodel” are examples of successful productions from Red Arrow Studios. In order to increase the proportion of local programming on its own stations, the Group intends to significantly increase Red Arrow Studios’ share in the content commissioned locally by the Entertainment segment.

Commerce segment: The Group bundles the Commerce business in NCG – NUCOM GROUP SE, Unterföhring (“NuCom Group”). This comprises eleven market-leading and overwhelmingly digital commerce platforms in the fields of consumer advice (e.g. Verivox, Aroundhome), matchmaking (Parship Elite Group, eHarmony), experience & gift vouchers (Jochen Schweizer mydays Group), and beauty & lifestyle (e.g. Flaconi).

Commerce business is the Group’s biggest growth driver, making a significant contribution to the expansion of digital revenue sources. At the same time, the expansion of our commerce portfolio reflects the Group’s high potential for synergy: Thanks to advertising on our stations, we are boosting the growth of our commerce brands while these in turn generate valuable customer information for targeted advertising products on TV and digital platforms. We aim to establish NuCom Group as a leading European omnichannel platform for consumer services and lifestyle brands.

034 / Strategic Brand Portfolio of ProSiebenSat.1 Group

034 / Strategic Brand Portfolio of ProSiebenSat.1 Group (Graphic)

As of February 2019 / 1 Joint venture / 2 Associated company

Management and Control

ProSiebenSat.1 Group is managed centrally by ProSiebenSat.1 Media SE. The organizational structure at Group level did not change materially in 2018, either structurally or legally.

ProSiebenSat.1 Media SE is listed in Germany at the stock exchange in Frankfurt am Main and at the stock exchange in Luxembourg (Bourse de Luxembourg). ProSiebenSat.1 Media SE has three governing bodies (as did ProSiebenSat.1 Media AG until it was converted into an SE in 2015): the Annual General Meeting, the Executive Board (managing body) and the Supervisory Board (supervisory body). The decision-making powers of these governing bodies are strictly demarcated from each other.

035 / Corporate Governance Structure of ProSiebenSat.1 Media SE As of December 31, 2018

035 / Corporate Governance Structure of ProSiebenSat.1 Media SE As of December 31, 2018 (Graphic)
  • The shareholders of ProSiebenSat.1 Media SE exercise their rights of joint administration and oversight at the Annual General Meeting. Each share grants the same legal rights and obligations in addition to one vote each at the Annual General Meeting.
    The ProSiebenSat.1 Media SE Share
  • The Executive Board is responsible for the overall performance of ProSiebenSat.1 Group, and has both professional and disciplinary authority over the managers of the business segments and holding company units.
  • The Supervisory Board monitors and advises the Executive Board on its conduct of business, and is thus directly involved in all corporate decisions of major importance.

The basic rules for this dual management and supervisory system are defined in the articles of incorporation of ProSiebenSat.1 Media SE and in the rules of procedure for the Executive Board and Supervisory Board. The articles of incorporation also define the business purpose. In accordance with Article 18 (2) of the Company’s articles of incorporation, this may be changed by a majority resolution of the Annual General Meeting if at least half of share capital is represented when the resolution is passed (Section 59 (2) SE Regulation and Section 51 Sentence 1 of the German SE Implementation Act (SE-Ausführungsgesetz — SEAG)). Otherwise, this requires a resolution by a majority of two thirds of the votes cast, that the law does not provide or permit a larger majority (Section 59 (1) SE Regulation). However, changes to the corporate objective still require a majority of at least three quarters of the valid votes cast in accordance with Section 179 (2) Sentence 1 of the German Stock Corporation Act (AktG) in conjunction with Section 59 (1) and (2) SE Regulation and Section 51 Sentence 2 SEAG.

We do not report on personnel changes in the Executive Board in this management report. However, further information is contained in the Report of the Supervisory Board.

Corporate Structure and Investments

The economic development of ProSiebenSat.1 Group is determined primarily by the subsidiaries, held both directly and indirectly. ProSiebenSat.1 Media SE is the Group’s holding company. In this function, its tasks include central financing, Group risk management and the ongoing development of the corporate strategy. These Consolidated Financial Statements include ProSiebenSat.1 Media SE and all significant subsidiaries — meaning entities in which ProSiebenSat.1 Media SE directly or indirectly holds a majority of voting rights, or whose relevant activities it is otherwise able to control.

The Group has an integrated portfolio that is also reflected in the investment structure. For example, ProSiebenSat.1 Media SE holds 100% of the shares in ProSiebenSat.1 TV Deutschland GmbH. The free TV stations of ProSiebenSat.1 Group and the pay TV channels (ProSiebenSat.1 Pay TV GmbH) work usnder its umbrella. ProSiebenSat.1 Media SE also indirectly holds a 100% stake in the sales companies SevenOne Media GmbH and SevenOne AdFactory GmbH. This results in advantages with regard to the stations’ programming and the sale of advertising time. The global film and TV distribution companies and the international television production companies both belong to Red Arrow Studios GmbH as a wholly owned subsidiary of ProSiebenSat.1 Media SE.

As of December 31, 2018, General Atlantic PD GmbH, Munich (“General Atlantic”), a globally leading growth investor, held a 25.1% stake in NuCom Group. Its companies benefit from the considerable TV reach of the parent company and of mutual synergies, for example in the areas of data and technology.

A detailed overview of the shareholding structure in ProSiebenSat.1 Group can be found in the Notes from page 256.

Pay TV
Television programming that can only be received if additional fees are paid. Special equipment (a decoder) is usually required.
Unique User
The unit “unique user” expresses how many people in a given period were exposed to an advertising medium or individual booking units and equates to net reach. The unique user is the basis for the calculation of the reach and audience structure of online advertising media and the regulation of essential factors for media planning such as weekly consumption, monthly consumption or building exposure.
The umbrella term AdTech refers to all products, providers, systems, and tools relating to advertising technology. AdTech forms the basis for programmatic advertising, for data-based, automated, and individualized buying and selling, and for real-time adjustment of advertising space. The entire process – from commissioning to performance of the service – takes places within the technology platforms provided for programmatic advertising. As such, AdTech replaces manual buying and selling of online advertising space and instead establishes a more efficient and flexible form of advertising dynamics for marketers and advertisers. Viewers can be targeted in an even better optimized way and with even greater target group focus, for example by means of individualized, real-time topic management. ProSiebenSat.1 Group currently sells around 50% of its digital display advertising via programmatic advertising systems.