RTL GROUP TV stands for Total Video Deutsche Bank London, 8 - PowerPoint PPT Presentation

RTL GROUP TV stands for Total Video Deutsche Bank London, 8 September 2016 Guillaume de Posch

Highlights Record interim operating results +3.2 % € 2,878 million € 1.00 87 % Revenue Cash conversion rate Interim dividend 20.2 % 19.4 % +8.6 % EBITA Margin EBITA Margin € 580 million € 341 million Reported EBITA Net profit 2

Agenda 1 STRATEGY Introduction to Total Video Content FINANCIALS Ad Tech INVESTMENTS APPENDIX 3

Overview ‘Total Video’ describes the dynamic expanding TV universe TV as we know it … … evolving to Total TV … … as an integrated eco -system Non-linear Linear Linear Linear Data Content Ad tech Now non-linear offers grow in quantity TV landscape has been fragmenting Digital tech, data and new types of and quality, moving closer to generation by generation content are embedded in Total TV traditional TV as TV-like offers 4

TV universe Linear TV universe has expanded for generations and this will continue … 4th programmes Fragmentation expected to Long form 3rd 8bn accelerate Pay TV FTA Families 3.5bn Adv. 2nd TV … targeting more niche TV 1 st Generation audiences or business models programmes Short form Niche Channels 600m Adv. ( e.g. News / Music) … via new distribution platforms Lower programme investment Higher programme investment Est. Market Size (GER/F/NL) Definitions: Long-form is > 30 minutes, Short-form is < 30 minutes, Lower invest is defined as content x in € produced <50K per hour. Higher invest is defined as content produced for >50k. 5 Source: Market sizes are internal estimations from a combination of internal business unit estimations and research sources

TV universe … expanding from linear to non -linear – illustrated in four ‘Quadrants’ Audiences expect… Families of  More choice SVOD / Long form channels …viewing pay online  More as catch- video experience better up offer personalized than “just” linear  viewing TV  Less advertising, Pay TV FTA better experience TV Non-linear Linear Advertisers expect…  Higher ROI (driven by Niche … digital efficiencies) Short form Digital first Channels YouTube standards to rise video /  Fully transparent (Aggre- to TV level, but Niche reporting gation) Content pricing to remain  Innovative cross-  low platform or cross- market campaigns Higher invest Lower invest Linear TV Non-linear 6

Viewing time ‘Total Video’ is currently not fully measured Total video viewing time Minutes per user per day / estimated Germany France USA Online short-form Online long-form (SVOD/Catch-up TV) 328m Time-shifted (DVR) Online long-form Linear TV 249m 11 232m +16min “Leakage” can 25 9 +10min only be estimated – TV +5min 6 Linear Time- measurement 10 3 29 TV shifted systems only slowly catching 6 13 up 264 Online short-form 210 -5min -4min +3min 224 Vs. 2012 Vs. 2012 Vs. 2012 2015 2015 2015 7 Source: IHS May 2016, user defined as internet user between 18-64 evenly balanced by demographic, age, gender and income

Our strategic priorities across the 4 quadrants Follow the viewers and explore presence in all video segments… Our ambition for … audience 4 1 Long form Continue to Explore Capture growth in total expand family of potential video, regain younger channels and SVOD audiences, prevent catch-up TV / OTT offerings unmeasured viewing offers … advertisers 3 2 Expand our Short form Invest in digital presence in Offer wider scope of first content and MCNs advertising products in brands globally and ‘Total Video’ monetize Lower invest Higher invest 8

Strategic priorities …while investing in key success factors: exclusive content, ad -tech and data Unique content remains Capture growth in essential in a ‘Total Video’ Long form total video, regain universe Invest in content 5 younger audience, business prevent unmeasured viewing Digital technology will be key Build out ad-tech 6 enabler Short form Offer wider scope of advertising Ability to unlock data is going to Extend data skills 7 products in whole be key video universe Lower invest Higher invest 9

Agenda TV Broadcast Family 1 1 STRATEGY 2 MCN Originals 3 FINANCIALS Content 4 Ad tech 5 INVESTMENTS APPENDIX 10

1 Broadcast family Expansion of RTL broadcast family – linear and non-linear 1 Continue to Investing in our family of 4th expand channels remains top-priority broadcasting family – 3rd especially in Catch-up is now an integral non-linear part of our family – and is 2nd treated as its own brand TV Continue to optimize channel 1 st Generation portfolio & launch new channels Non-linear Linear 11

2 MCNs Short-form business expanding beyond YouTube 2 TV New platforms are gaining 1 st Generation Extend leading scale – driving growth and MCN position monetisation opportunities and drive monetization 2nd Our MCNs enjoy high audience growth 3rd New short-form video platforms 4th Continue to build the RTL Group Digital Hub Non-linear Linear 12

3 Digital first brands We are building digital brands in key verticals… 3 Invest in digital first #1 IN #1 IN #1 IN PRE-SCHOOL FASHION/BEAU HIP-HOP brands, KIDS TY expand web original content Gaming Music Sport News Entertainme Kids Lifestyle Fashion nt & beauty & Comedy Examples: non-exhaustive Partners 13

3 Digital first brands … as well as ramping -up our web original content Illustrative examples only RTL Group web original content Purely commissioned for web, excl. branded content Estimate ~2400hrs BBTV incl. YB & 1,764 Stylehaul 1h15 movie on YouTube #1 Pre-school Kids MCN on   FM ~500  75% of budget covered by YouTube product placement  Creating in-house kids content Broadcasters 130  3.3 million views at scale FY 2015 14 Source: Web original content is still a rough estimation, Broadcasters includes web original content from GE, FR, NL

4 Strategic priorities in content Fremantle is positioning itself in all ‘Total Video’ quadrants  Keep existing hits on B A air Maintain the Long form A Develop the core business  Roll out formats to new territories pipeline and maximize the network  Create new formats Content B  Accelerate the scripted strategy C Short form  Expand across value Build a scalable digital business chain C  Strengthen off- YouTube distribution Higher invest Lower invest  Develop new verticals 15

4 Develop pipeline Our scripted strategy is showing growth potential Major series American Gods Continued success in non- Wide range of new 1 2 3 and Young Pope progressing English language commissions / developments American Gods (Starz)  First subtitled drama Hard Sun (BBC/Hulu) ever to be aired in the Euston Films’ first commission.   Casting for major roles US In pre-production complete  Highest rated subtitled Wentworth (SoHo Aus)  Filming started, launch in drama in UK history 2017  S4 launching, two more commissioned  Amazon Prime deal just #1 in the Scandinavia  2 international remakes  signed  Season 2 in development Picnic at Hanging Rock The Young Pope (HBO/Sky/Canal+) (Foxtel) Season 2 in production  FM Australia adaptation of 1970  Paolo Sorrentino mini-   UK adaptation in series starring Jude mystery film development (Euston) Law and Diane Keaton Ruby King (ITV)  Produced by Wildside  Successful launch Euston Films legal drama  season on Canal+  Launches this October  At script stage with Graham Mitchell following special 2 part  Second season Baghdad Central (C4) premiere at Venice Film commissioned Festival in September  Euston Films post-war Iraq drama At script stage with Stephen Butchard  16

5 Ad tech Offering publishers ‘Total Video’ monetisation capabilities at scale Demand-side Ad- Supply Side Advertiser Publisher platform (DSP) server platform (SSP) Multi-screen delivery / ad-serving SSP / Yield optimisation Booking, reporting and forecasting tools 1,300 Addressable TV (Connected TV / HbbTV) PUBLISHERS Cross-screen optimisation GLOBALLY Programmatic ad sales for linear TV  Expansion and roll-out in Europe and Asia Strategic  Grow premium private market places goals  Building fully integrated ad stack 17

RTL GROUP TV stands for Total Video Deutsche Bank London, 8 September 2016 Guillaume de Posch