Company Outlook

Forecast for 2019

In accordance with the outlook for 2019 which the ProSiebenSat.1 Group presented at the Capital Markets Day in November 2018, the Group still aims for revenue growth in the mid single-digit percentage range and an adjusted EBITDA margin between 22% and 25% on a whole-year basis. This target includes at least stable or only slightly declining TV advertising revenues in the Entertainment segment and is based on a stable macro environment. Should the general conditions deteriorate beyond the assumptions made, this would have a negative impact on profitability in the Entertainment segment and at Group level.

As already announced at the Capital Markets Day, the planned investments recognized as expense in the Entertainment segment will impact the Group’s profitability and earnings performance on a full-year basis. These investments will be spread primarily across the first three quarters, with a focus on the second and third quarter, and will lead to declines in earnings in each case. Provided stable to only slightly declining TV advertising revenues in the Entertainment segment, as already communicated, the ProSiebenSat.1 Group still anticipates that the impact of the planned investments recognized as expense on adjusted EBITDA of the Group in the full-year 2019 will restrict to a mid double-digit million EUR amount compared to the previous year. In addition, the investments in the joint streaming platform with Discovery Communications will burden the financial and net result.

At segment level on a full-year basis, the ProSiebenSat.1 Group anticipates the revenues in the Entertainment segment to be approximately in line with those of the previous year, provided stable to only slightly declining TV advertising revenues as well as an offsetting positive development of other Entertainment revenues. In the Content Production & Global Sales segment as well as in the Commerce segment, the Group anticipates a dynamic growth (both reported and organic) in each case. The Commerce segment is even expected to achieve significant double-digit percentage revenue growth on a full-year basis. The Group will benefit here accordingly from the initial consolidation of the matchmaking provider eHarmony and of Aroundhome.

The leverage ratio, i.e. the ratio of net financial liabilities to LTM adjusted EBITDA of the Group, should be within the range of 1.5 and 2.5 at the year-end of 2019. At the year-end of 2018, the leverage ratio was 2.1 (previous year: 1.6).

We also still expect to maintain our leading position with regard to audience shares in the advertising-relevant target group of 14- to 49-year-olds at a high level.

DIVIDEND PROPOSAL

In November 2018, ProSiebenSat.1 Group presented a “Total Shareholder Return” concept (based on the average annual shareholder return). In this context, the Group presented an adjustment of its dividend policy: From financial year 2018, we will pay out 50% of adjusted net income as a dividend (previously 80% to 90%). The Group will primarily use the funds thus released for earnings-increasing investments in organic and inorganic growth. The Executive Board is therefore advising the Supervisory Board to propose a dividend of the amount of 50% of adjusted net income or respectively of EUR 1.19 per share (previous year: EUR 1.93) to the Annual General Meeting for the financial year 2018. This corresponds to a dividend yield of 8% (previous year: 6.7%) of the closing price of the ProSiebenSat.1 Media SE share at the end of 2018.

Mid-term financial targets

Over the next around five years, the ProSiebenSat.1 Group intends to increase revenues to EUR 6 billion (2018: EUR 4,009 million) and adjusted EBITDA to EUR 1.5 billion (2018: EUR 1,013 million). We want to increase the share of revenues of the non-advertising business (2018: 44%) and the digital business (2018: 29%) each to over 50%. The financial targets reflect our strategy of expanding the entire Group into a diversified and fast-growing digital corporation.