FINANCING INSTRUMENTS AND MATURITY PROFILE
ProSiebenSat.1 Group uses various debt financing instruments for the purpose of its Group financing. This Group financing is regularly adjusted with respect to volumes and maturities.
ProSiebenSat.1 Group is currently financed via term loans as part of a syndicated facilities agreement provided by banks as well as various promissory loans.
For short-term or seasonal financing needs, ProSiebenSat.1 Group uses revolving credit facilities under this syndicated facilities agreement. Additionally, various money market instruments are used for this purpose. Borrower of the syndicated credit facilities, the promissory loans and the money market instruments used for Group financing purposes is currently ProSiebenSat.1 Media SE.
In addition, the ProSiebenSat.1 Group has a debt issuance program via ProSiebenSat.1 Media SE in place. This is a flexible financing program for the issuance of fixed and variable interest rate notes with multi-year maturities. The program has a volume of up to 2.5 billion Euros. Volume, tenors, and interest of the notes to be issued are based on the prevailing conditions at the time of issuance. Currently, however, no notes are outstanding under the debt issuance program.
The described debt instruments used to finance the ProSiebenSat.1 Group are all unsecured.
In December 2016, the company issued promissory loans in the amount of 500 million Euros. These consist of two seven-year terms of 225 million Euros with a fixed coupon and 50 million Euros with variable interest rate, as well as a ten-year fixed coupon tranche of 225 million Euros.
In April 2019, the Group extended the maturities of the majority of the term loans and the syndicated revolving credit facility (RCF) to April 2024.
In January 2021, the Group has exercised its early redemption call for its 600 million Euro seven-year fixed-interest notes and prepaid the notes at nominal value from available cash. The notes carried an original maturity in April 2021.
In October 2021, the company issued another set of promissory loans in the total amount of 700 million Euros with tenors of four, six, eight and ten years and respective volumes of 226 million Euros, 346 million Euros, 80 million Euros and 48 million Euros. The issuance consists of four tranches with fixed coupons (four to ten years) and three tranches with variable interest rates (four to eight years). The fixed coupon tranches total 403 million Euros and the floating interest tranches total 297 million Euros.
Subsequently, following the issuance of the 700 million Euros promissory loans in October 2021, the company repaid 900 million Euros of its term loans under its senior facilities agreement and reduced its term loans from 2.1bn Euros to EUR 1.2bn Euros, while further extending and diversifying the maturity profile of the debt financing instruments relevant for the Group-wide financing.
The maturity profile for the above-mentioned debt instruments resulting from these measures as of October 2021 is shown in the chart below.
As part of its strategy the ProSiebenSat.1 Group focuses on sustainable and profitable growth based on three pillars: Entertainment, Dating and Commerce & Ventures. Operating cash flows from current business activities and the use of external financing are part of the financing mix. An important indicator for the corresponding financial planning is the Group's leverage ratio (leverage factor). It indicates the level of net financial debt in relation to LTM adjusted EBITDA – EBITDA adjusted for reconciling items that the ProSiebenSat.1 Group has generated in the last twelve months (LTM = last twelve months). The target for the ratio of net financial debt to LTM adjusted EBITDA is a factor of between 1.5 to 2.5.
At the same time, the ProSiebenSat.1 Group pursues an attractive dividend policy for its shareholders and has also defined clear goals. The target is to distribute a dividend of 50 % of the adjusted net income (Group adjusted net income).
Another key element of its financial target framework and part of the ProSiebenSat.1 Group's growth strategy is to achieve a P7S1 ROCE1) (return on capital employed) of more than 15 per cent in the medium term. P7S1 ROCE is the ratio of the Group's adjusted EBIT to the Group's capital employed.
1) For definition see page 98 of the Annual Report 2020.