RTL Group Announces its Audited Preliminary Results for the Year 2002

RTL Group, Europe’s leading broadcaster and content provider, announces its audited preliminary results for the year ended 31 December 2002.

EUR, million	Year  to 31 Dec 2002	Year  to 31 Dec 2001	Per cent change  (%)
Revenue	4,362	4,054	7.6
Adjusted EBITA	477	361	32.1
Restructuring costs	38	36	5.6
Non-recurring items	-	27	-
Start up losses	15	22	(31.8)
Reported EBITA	424	276	53.6
Adjusted EBITA margin (%)	10.9%	8.9%	-
Reported EBITA margin (%)	9.7%	6.8%	-
Goodwill impairment	(70)	(2,562)	n.a
Profit/Loss for the year	(56)	(2,499)	n.a
Earnings per Share, EUR	(0.37)	(16.27)	97.7
Adjusted earnings per share, EUR	1.61	0.90	78.9
Dividend per Share, EUR	0.70	0.50	40.0

Adjusted earnings per share represents the net profit for the year adjusted for amortisation and impairment of goodwill and gain or loss from sale of subsidiaries, joint ventures and other investments, net of income taxes
 

Business Headlines
  
Increased efficiency within core businesses

• Adjusted revenue growth of 1.6 per cent reflects continued success in maintaining or increasing audience and advertising share in our markets
• Costs firmly under control, underlying cost base down 3.1 per cent. Further efficiency savings and synergies identified
• Adjusted EBITA margin up 2.0 percentage points to almost 11 per cent

Out-performance in a tough market 

• Advertising markets remain tough, so advertisers look to prime time leadership to deliver mass audiences  
• RTL Group channels in Germany, France and the UK continue strong performances and ratings success    
• Number one position of German family of channels boosted as margins increase despite decline in revenue 
• French radio EBITA up on increased efficiency and increased competitive advantage over nearest commercial rivals

Production business success and diversification boosts non-advertising revenues

• FremantleMedia EBITA up over 50 per cent due to restructuring measures taken in 2001 and 2002
• Pop Idol format has been an international smash hit for Fremantle; launched in eight territories with huge audience success. Format demonstrates the creativity within FremantleMedia 
• Non advertising revenue now accounts for 38 per cent of total Group revenue 
• M6 sets standards for diversified revenues

Robust finances and strong cash generation

• EBITA cash flow conversion 140 per cent
• Proposed dividend EUR 0.7 per share (2001 : EUR 0.5 per share) up 40 per cent, sustainable dividend policy to pay out 35-50 per cent of earnings  

​Gerhard Zeiler, Chief Executive Officer (CEO) of RTL Group, said: “These figures show that I am assuming responsibility for RTL Group at a time of great stability when many of our peers are struggling. They are a tribute to my predecessor Didier Bellens and the team he has built within the Group, and I am looking forward with confidence to the challenge of taking the company forward from such a strong starting point. This is a pan-European operation that is based on creativity where synergies have grown naturally and profitably, rather than being imposed. Looking ahead we will continue to build the successful partnerships within the Group, we will continue to control our costs carefully without detracting from our schedules and we will also continue to develop our diversification businesses.”

Thomas Rabe, Chief Financial Officer (CFO) of RTL Group, said: “These strong results demonstrate our ability to drive both top line growth and operating profitability. We have improved the efficiency of the business over the past year by identifying cost savings across the Group and by successful restructuring.  These savings have resulted in a reduction in the cost base of over 3%.  As a result, there has been an improvement in EBITA in all segments and strong cash conversion across the Group. The net result for the year is EUR minus 56 million due primarily to a goodwill impairment of EUR 70 million and write-downs on financial assets of EUR 49 million.

Management will continue to drive efficiencies and synergies across the Group exploiting its unique pan-European position. Through these ongoing measures the management is confident that the business is well positioned to bring improved revenue and earnings performance.”

Outlook

Based on forward bookings to date, advertising market conditions continue to be difficult in 2003, with low visibility throughout RTL Group’s operations. RTL Group continues to develop non-advertising related revenue streams and can already say, after the first two months of 2003, that it is having some worthwhile success.  However, the economic and political environment adds to the uncertainty.

The RTL Group stations are well positioned to cope with these challenges due to the continued investment in programming that will drive audience share. The cost containment measures implemented since 2001 have already shown significant positive effects. RTL Group will continue to focus on cash generation, thereby increasing flexibility for the funding of internal and external growth.

A conference call for analysts and investors will proceed at 09:30h London time on Monday, March 17, 2003. The dial in number is + 44 20 7162 0179 and password RTL. A recording of this meeting will be available on + 44 20 8288 4459 and passcode 433862 from March 17, 2003 for 7 days.