A HALF-YEAR IMPACTED BY COVID-19
- Consolidated revenue: €557.3m (down
€157.2m)
- EBITA: €84.4m (down €63.9m)
- Operating margin: 15.1% (20.7% in H1
2019)
Implementation of an exceptional savings
programme, which offset 59% of the fall in revenue
Regulatory News:
M6 Métropole Télévision (Paris:MMT):
At its meeting held on 28 July 2020, the Supervisory Board
reviewed the 2020 half-year financial statements approved by the
Executive Board.
H1 (€ millions)
2020
2019
change (€m)
change (%)
Consolidated revenue1
557.3
714.6
-157.2
-22.0%
Group advertising revenue
400.6
539.3
-138.7
-25.7%
- of which TV advertising revenue
338.6
454.3
-115.7
-25.5%
- of which other advertising revenue
62.0
85.0
-23.0
-27.0%
Group non-advertising revenue
156.7
175.3
-18.5
-10.6%
Consolidated profit from recurring operations
(EBITA)2
84.4
148.3
-63.9
-43.1%
Operating income and expenses related to business
combinations
(5.9)
(6.5)
+0.6
-9.0%
Capital gains on disposals of equity investments
120.9
0.4
+120.5 n.a
Operating profit (EBIT) from continuing
operations
199.4
142.2
+57.2
+40.2% Net financial income/(expense)
(2.4)
(2.8)
+0.4
-14.8%
Share of profit/(loss) of equity-accounted entities
(3.0)
3.1
-6.1
n.a Deferred and current tax
(31.7)
(53.8)
+22.0
-41.0%
Net profit/(loss) of operations sold / held for sale
0.0
(0.3)
+0.3 n.a
Net profit
162.3
88.4
+73.9 +83.6% Net profit for the period - Group share
162.3
88.4
+73.9 +83.6%
Net profit before capital gains on disposals
of equity investments
42.7
88.0
-45.3
-51.5%
The lockdown of the French population and the near total
shutdown of the economy have severely impacted the Group’s various
activities, both in terms of multimedia advertising (down €138.7
million) and non-advertising activities (down €18.5 million). For
the first six months, M6 Group posted consolidated revenue of
€557.3 million, a decline of €157.2 million (down 22.0%).
Within this context, the Group successfully and rapidly adjusted
its level of operating expenditure, making savings of €92.2
million, comprising €49.1 million across programmes and €43.1
million in other costs, thus successfully offsetting 59% of the
decline in revenues through cost savings. Demonstrating once again
its agility, the Group posted a consolidated profit from
recurring operations (EBITA) of €84.4 million, compared with
€148.3 million in the 1st half of 2019, representing a fall of
€63.9 million and an operating margin of 15.1%.
Furthermore, over the course of this turbulent half-year, the
Group completed two major transactions, with the combination of
iGraal with Global Savings Group, which reinforces the Group’s
positioning in digital marketing by becoming the principal
shareholder in the new structure, and the opening up of the share
capital of its technology subsidiary Bedrock to RTL Group, in order
to accelerate its innovation capacity in streaming for on-demand
television. These two transactions generated capital gains of
€119.6 million over the half-year. Net profit for the period
thus stood at €162.3 million (up 83.6%).
Excluding capital gains, net profit totalled €42.7
million, down €45.3 million or 51.5%.
*
* *
In accordance with IFRS 8, the contribution of the Group’s 4
operating segments to consolidated revenue and EBITA was as
follows:
Q1 Q2 H1 (€ millions)
2020
2019
%
2020
2019
%
2020
2019
%
TV
228.9
238.6
-4.1%
157.7
250.9
-37.1%
386.6
489.5
-21.0%
Radio
31.5
35.5
-11.2%
28.4
46.8
-39.2%
59.9
82.3
-27.2%
Production & Audiovisual Rights
15.9
19.7
-19.5%
13.4
20.4
-34.2%
29.3
40.1
-26.9%
Diversification
44.9
51.9
-13.5%
36.3
50.7
-28.4%
81.2
102.5
-20.9%
Other revenue
0.2
0.1
n.a
0.2
0.1
n.a
0.4
0.2
n.a
Consolidated revenue
321.3
345.7
-7.1%
236.0
368.8
-36.0%
557.3
714.6
-22.0%
TV
66.2
113.5
-41.6%
Radio
(2.2)
12.0
n.a Production & Audiovisual Rights
14.4
11.4
+26.9% Diversification
8.2
15.9
-48.5%
Unallocated revenue
(2.3)
(4.5)
n.a
Consolidated profit from recurring operations
(EBITA)
45.6
64.2
-29.0%
38.8
84.1
-53.9%
84.4
148.3
-43.1%
Operating margin
14.2%
18.6%
16.4%
22.8%
15.1%
20.7%
The fall in revenue had an impact on both quarters, whilst the
savings programme was primarily implemented in the second quarter,
which explains the improvement in operating margin.
TELEVISION
The TV advertising market, which began 2020 on a relatively
stable note, plummeted in March due to the introduction of lockdown
measures, with the trend remaining extremely challenging until
mid-May. The market then saw a gradual sequential improvement, with
a recovery in consumer spending.
Within this unprecedented environment, TV advertising revenue
fell 25.5% over the half-year (down 28.1% at constant scope),
including a fall of 41.7% over the second quarter (down 43.6% at
constant scope).
Conversely, TV viewing (live and on-demand) surged during the
pandemic. Average Individual Viewing Time rose by 27 minutes year
on year (up 13%) in the first half of 2020, standing at 3 hours 56
minutes, and even reaching 4 hours 34 minutes (up 56 minutes) over
the entire lockdown period, representing its highest ever
level3.
Against this backdrop, the range of event-driven and family
friendly programming broadcast by M6 Group’s channels proved
popular.
- The M6 channel retained its position as the 2nd largest
national channel on the commercial target across the entire day
with an audience share of 14.1%. With an average of 2.9 million
viewers, in the 1st half of 2020 M6 delivered a solid performance
in the strategic access prime time slot (7.45pm-10.30pm) with
strong ratings amongst women under 50 responsible for purchases
(18% audience share). Some of its leading brands continued to grow,
such as Top Chef (4.0 million viewers, its best ever season amongst
the under 50s with a 26% audience share), Mariés au premier regard
(3.0 million viewers, its best ever season amongst WRP<50 with a
26% audience share) and Pékin Express (3.2 million viewers, its
highest audience figures in eight years).
- W9 consolidated its ranking as the second largest DTT
channel amongst WRP<50 throughout the entire day (3.9% audience
share). The channel provides the most powerful reality TV range on
television, attracting a wide and young access prime time audience
every evening.
- 6ter, with its wide range of programmes for the entire
family, consolidated its position as the fifth largest DTT channel
for all generations combined on the commercial target (2.8%
audience share).
- Gulli, the leading children’s channel for both 4-10 year
olds and 4-14 year olds, posted growth amongst WRP<50 (up 0.2
percentage points) and achieved a 1.7% audience share. This
performance was a result of the initial content synergies with the
Group’s other channels.
- 6play, showcasing the event-based line-up of the Group’s
channels, also benefited from a dedicated range of programmes
enabling it to support the strong growth of its audience. During
lockdown, the platform recorded an increase of 43% in the
consumption of its content, with the number of videos viewed
reaching 715 million (up 15%)4 over the first half-year as a
whole.
Moreover, M6 Group’s pay channels consolidated their positions
amongst the leading channels in the pay-TV environment5: Paris
Première confirmed its status as the most watched pay-TV
channel (13 million viewers each month) and Téva regained
its leadership amongst WRP<50.
Programming costs stood at €192.8 million compared with €241.9
million over the first half of 2019, representing savings of €49.1
million in response to the record slump of the advertising market.
The Group quickly managed to adapt its range of programmes, notably
drawing on its catalogues of films and launching new tailored
programmes, such as the successful Tous en cuisine.
The TV division thus contributed €66.2 million to
consolidated EBITA, against €113.5 million for the six months
to 30 June 2019. The margin from recurring operations for the
Group’s core business remained at a high level, at 17.1%.
RADIO
After experiencing slight growth at the start of the year, the
radio advertising market fell sharply from March onwards due to the
sudden decline in consumer spending following the introduction of
the lockdown measures. Against this backdrop, Radio revenue
stood at €59.9 million, a decline of 27.2% in relation to the
1st half of 2019.
The results of the two audience waves for the 1st half of 2020
confirmed the RTL Radio division as the leading private radio group
in France6.
Over the January to March wave, the division posted the
strongest growth of all major industry players. In this way, its
audience share amongst listeners aged 13 and above recorded
year-on-year growth of 0.7 percentage points to 18.9%.
- RTL, France’s leading radio station (equal with France
Inter), saw its audience share increase by 1.6 points to 13.4%. The
station achieved its highest ever level across all waves
combined.
- RTL2, whose breakfast show Le Double Expresso posted
record audience figures, maintained its audience share at 2.9% for
the entire day.
- Fun Radio achieved an audience share of 2.6%, a
year-on-year decline of 1 percentage point.
Over the atypical May-June wave (Médiamétrie was unable to
conduct its surveys during the lockdown), the RTL Radio division
reached a high level with an audience share of 19.5%. RTL posted an
audience share of 13.4% and retained sole leadership of the market
with a 1 percentage point lead over France Inter.
Negative EBITA of €2.2 million was recorded, compared
with positive EBITA of €12.0 million for the first six months of
2019, reflecting the sharp decline in advertising activity.
PRODUCTION & AUDIOVISUAL RIGHTS
In the 1st half of 2020, revenue from Production and
Audiovisual Rights operations totalled €29.3 million, down
26.9% year on year, primarily due to the closure of cinemas between
15 March and 21 June. Films distributed by SND only recorded
1.6 million admissions over the first half of 2020, compared with
4.7 million over the same period last year.
Conversely, the division’s EBITA grew €3.1 million to €14.4
million, due to the very strong growth in sales of catalogue
films, both to the Group and to its external customers.
DIVERSIFICATION
Over the first half of 2020, Diversification revenue totalled
€81.2 million, a fall of €21.4 million, €18.9 million of which
was due to negative base effects related to the deconsolidation of
iGraal (€9.5 million) and the termination of the M6 mobile by
Orange contract (€9.4 million).
Diversification EBITA was €8.2 million, compared with
€15.9 million for the 1st half of 2019. This fall of €7.7 million
was primarily due to the lack of contribution by the M6 mobile by
Orange contract (€9.4 million) and the recovery of the Ventadis
division.
As a result, across the scope of continuing operations, revenues
recorded a slight decline of €2.5 million, or 3.4%, while EBITA
grew €3.4 million (up 93.8%).
- Amongst Ventadis’ operations, Home Shopping
Service stood out due to its wide range of household products,
which proved popular with larger numbers of viewers during the
lockdown, while Best of TV suffered from the closure of its
points of sale. It should be noted that, in a longer term context,
the Group has begun exclusive negotiations with the company Stars,
the parent company of Teleshopping, with a view to the sale of its
entire share capital in Home Shopping Service.
- During the pandemic, M6 Digital Services saw significant
increases in the traffic on its websites, such as CuisineAZ.com,
now the second largest player in the Cooking and Recipe sector,
with 12.5 million unique visitors each month (up 67% year on
year)7. Nevertheless, digital advertising revenue suffered from the
worsening economic situation.
FINANCIAL POSITION & OUTLOOK
The Group had shareholders’ equity of €941.2 million at 30 June
2020, compared with €772.9 million at 31 December 2019, an increase
of €168.3 million, reflecting the performance of the 1st half of
2020 as well as no dividend payments being made in 2020 for
2019.
Over the course of the first half of 2020, the Group also drew
down on its bank credit facilities and benefited from the
contribution of the disposal of iGraal (€35 million collected).
Through strict control of its operating cash flows, at 30 June 2020
the Group had a net cash position of €1.9 million8 and has
sufficient liquidity to withstand the fall in receipts that will
impact the next quarter.
Within a context of fragile and uncertain economic recovery
since the end of the lockdown, the Group will make every effort to
capitalise on the potential continuation of the upturn in the
advertising market in the autumn, thanks in particular to a
competitive range of programmes. It will also continue its cost
control efforts.
GOVERNANCE
At its meeting of 28 July 2020, M6 Group’s Supervisory Board
appointed Régis Ravanas as member of the Executive Board,
responsible for the Radio Stations, Music and Events.
The Executive Board of M6 Group is now comprised of five
members:
- Nicolas de Tavernost, Chairman of the Executive
Board,
- Thomas Valentin, Vice-Chairman of the Executive Board in
charge of Programmes and Content,
- Régis Ravanas, Member of the Executive Board in charge
of the Radio Stations, Music and Events,
- Jérôme Lefébure, Member of the Executive Board in charge
of Finance and Support Functions,
- David Larramendy, Member of the Executive Board in
charge of Sales Activities.
CORPORATE RESPONSIBILITY
Having mobilised its employees and shareholders in order to deal
with the crisis, the Executive Board did not consider it fair to
allocate any performance-based shares in respect of 2020, and, in
response to the sector-specific state support introduced, it
decided on the rapid launch of a significant recruitment programme
for young graduates.
Neuilly-sur-Seine, 28 July 2020
A conference call will be held on 28 July 2020
at 6.30pm (CEST). A webcast will be broadcast on the site
www.groupem6.fr (Finance section).
Details on how to access the conference call
are available at the same address. Both the slideshow presentation
and the consolidated half-year financial statements will be
accessible online from 6.00 pm, it being specified that the
Statutory Auditors have completed a limited review of the financial
statements and issued an unqualified report.
Next release: Third quarter financial
information on 27 October 2020 after close of trading
M6 Métropole Télévision is listed on Euronext
Paris, Compartment A.
Ticker: MMT, ISIN Code: FR0000053225
1 The information provided is intended to highlight the
breakdown of consolidated revenue between advertising and
non-advertising revenue. Group advertising revenue includes TV
advertising revenue (advertising revenue of free-to-air channels
M6, W9, 6ter and Gulli, and the 6play and Gulli Replay platforms,
as well as the share of advertising revenue from pay channels) and
the advertising revenue of radio stations RTL, RTL2 and Fun, and
the share of advertising revenue generated by diversification
activities (mainly Internet). 2 Profit from recurring operations
(EBITA) is defined as operating profit (EBIT) before amortisation
and impairment of intangible assets (excluding audiovisual rights)
related to acquisitions and capital gains and losses on the
disposal of financial assets and subsidiaries. 3 Source:
Médiamétrie Médiamat 4 Source: Heartbeat 5 Source: Médiamétrie
Médiamat Thématik, - wave 39 (January-June 2020) 6 Source:
Médiamétrie 126,000 7 Source: Médiamétrie (May 2020) 8 The net cash
position does not take into account rental liabilities resulting
from the application of IFRS 16 - Leases
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version on businesswire.com: https://www.businesswire.com/news/home/20200728005748/en/
INVESTOR RELATIONS Guillaume Couturié +33 (0)1 41 92 28
03 / guillaume.couturie@m6.fr
PRESS Paul Mennesson +33 (0)1 41 92 61 36
/ paul.mennesson@m6.fr
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