During the last four years, Ralf Schremper has positioned the ProSiebenSat.1 Group’s portfolio for strong growth. Since April 2015, he manages the Company’s investment strategy as a member of the Executive Board.
You will be responsible for the newly created “Corporate Strategy and Investments” executive department from April 2015. Is this the starting signal for an offensive acquisition phase?
Ralf Schremper: It’s a sign that ProSiebenSat.1 is continuing to pursue a consistent mergers and acquisitions growth strategy. The focus is on the Digital & Adjacent and Content Production & Global Sales segments.
ProSiebenSat.1 has significantly boosted its digital commerce business in the last few years with an innovative idea: You offer start-ups advertising space on your stations and in return receive a share in equity and / or revenues. How has this model turned out?
Ralf Schremper: Excellently. We’re a pioneer on the German media market with the media-for-equity and media-for-revenue-share deals, and have built up several e-commerce verticals such as Travel, Home & Living, Fashion & Lifestyle, Beauty & Accessories or Online Comparison Portals. We’re gradually rounding these off with acquisitions. Each vertical has the potential to generate over EUR 100 million in revenues in the medium term. The model is working so well that we now want to internationalize it.
With your investments in start-ups, you sometimes pursue exit strategies, like with lieferando.de and Tirendo. When is the optimum time for an exit?
Ralf Schremper: When there’s a favorable opportunity, we’ll use it. We expect to generate exit proceeds of EUR 10 million per year. As an active investor, however, we basically want to help build up a business without any time pressure and to increase the enterprise value.
With the sale of its TV and radio stations in Belgium, the Netherlands as well as Northern and Eastern Europe, the Group has gained more financial scope again. Is this now the era for M&A in cash?
Ralf Schremper: An acquisition isn’t just a question of financial scope for us, but above all of quality. The investment must always lead to clear growth in value for the Group and must generate concrete synergies with TV and other areas of business. We carry out cash acquisitions with strategic investments in particular. In 2014, for example, we acquired a stake in the multi-channel network Collective Digital Studio and strengthened the English-language production business of the Red Arrow Entertainment Group with targeted investments such as the takeover of Half Yard.
»Each vertical has the potential to generate over EUR 100 million in revenues.«
What funding do you have available?
Ralf Schremper: On the debt side, the corridor is at a leverage between 1.5 and 2.5. The dividend payment of 80 % to 90 % of the underlying net income defines the volume on the income side. We adhere strictly to these financial guard rails.
Do you have a motto to support you in your professional life?
Ralf Schremper: With each acquisition, I’d like to have a good feeling that I would also invest as a private investor. If you’re completely convinced of a decision in life, it’s the right way.