Ad Hoc Publication Pursuant to Sec. 15 German Securities Trading Act (WpHG)
Munich, April 24, 2008. Based on preliminary figures for the first quarter of fiscal 2008, ProSiebenSat.1 Group has increased its revenues by 45.5 percent to EUR 729.1 million and recurring EBITDA by 7.8 percent to EUR 88.5 million due to the first time consolidation of SBS Broadcasting Group. However, on a pro forma basis for the combined Group, revenues decreased by 2.0 percent or EUR 14.9 million to EUR 729.1 million in Q1 2008 versus Q1 2007, recurring EBITDA declined by 25.1 percent to EUR 88.5 million.
Pro-forma results in Q1 2008 have been impacted primarily by the segment Free TV German speaking region which saw a reduction in external revenues of 4.9 percent to EUR 417.1 million. Recurring EBITDA of the segment decreased accordingly by 18.4 percent to EUR 57.6 million. The decrease in revenues and earnings is due to uncertainties linked to the implementation of the new advertising sales model introduced at the end of 2007 as a consequence of proceedings of the German Federal Cartel Office and to a time-lag effect of the weak ratings of Sat.1 in 2007.
International TV advertising markets of the former SBS countries again showed stronger dynamics than Germany. External revenues of the Groups segment Free TV International grew by 1.3 percent and reached EUR 176.0 million (pro forma Q1 2007: EUR 173.7 m). Recurring EBITDA showed a decrease of 28.6 percent to EUR 27.5 million partly due to start-up costs for new TV channels in Sweden (Kanal 9) and Norway (FEM).
External revenues in the Diversification segment rose 3.1 percent to EUR 135.9 million (pro forma combined). Recurring EBITDA decreased by EUR 5.1 million to EUR 4.0 million due to lower call TV revenues of 9Live in Germany and to start-up costs for new services in Pay TV and Video-on-Demand as well as for the internationalization of 9Live.
The Group has taken decisive accelerated steps in the execution of its strategy by implementing an action plan. The advertising sales model for the German market has been adjusted to increase its competitiveness. The Company is confident that it will regain market share with the adjusted model in H2 2008. The Group has also decided to reorganize the German advertising sales organization to more optimally address the German market following the changes in the advertising sales model, as well as to better position the business for the challenges and opportunities of digitization.
Due to the issues related to the advertising sales model in Germany, which will also affect Q2 2008, the Group has decided to implement a cost savings plan of EUR 70 million in 2008 versus its original budget for 2008. Savings will come from a reduction of Selling, General and Administrative Expenses and better use of the Groups existing programming inventory. The Group continues to actively invest in new programming developments.
In this regard, the Group has devoted particular attention to Sat.1 over recent months. The station has been able to increase its average audience to 11.0 percent YTD 2008 vs. 10.5 percent in the same time period in 2007 (14-49).
Finally, the Group has initiated the first steps in the digitization of ProSiebenSat.1 Production by outsourcing its IT services to IBM.