Euro ad recovery buoys RTL

Group delivers best-ever half-year result

BERLIN — Europe’s biggest entertainment company, RTL Group, on Wednesday posted its best-ever half-year result due to a stronger than expected rebound in Europe’s TV ad markets and improved business in key territories.

RTL’s net profit reached $325 million compared with a net loss of $133 million a year ago, while revenue climbed 7.5% to $3.36 billion.

Contributing significantly to RTL’s overall performance was Germany’s Mediengruppe RTL Deutschland, which achieved a combined record market share of 34.8% in the country and saw operating profit climb 63% to

$325 million.

Robust performances by Groupe M6 in France and Dutch unit RTL Nederland also buoyed the Luxembourg-based company’s results.

RTL chief exec Gerhard Zeiler said: “The stronger than expected rebound seen in the Western European TV advertising markets is the result of the overall economic recovery, but it also demonstrates the strength of television, as many advertisers have re-discovered its unique value for building brands and reaching mass audiences.”

According to RTL’s estimates, the U.K. saw the biggest ad market growth with 15%, followed by Belgium (14%), France (11%) and Germany (9%). Even Spain saw strong 7.5% growth despite its continuing economic woes.

Majority owned by German media conglom Bertelsmann, RTL operates 43 TV channels and 31 radio stations in 10 countries.

Among its subsidiaries is FremantleMedia, producer and distributor of franchises such as “Idols,” “Got Talent” and “The X Factor.”

Zeiler said cost-cutting measures implemented last year, coupled with the improved ad market and increased TV auds in Germany helped the company achieve record results.

Speaking in a conference call, Zeiler said there was “a positive and healthy trend in the third quarter” in Western Europe and while he expressed optimism for the full year, he added that visibility for the important fourth quarter remained low due to the fact that ad bookings are done on a very short-term basis.

Despite vast improvements in Western Europe, Zeiler pointed out that there were “no signs yet of recovery in the TV advertising market in Central and Eastern Europe.”

Zeiler said the group was looking to further optimize its core broadcasting business by strengthening its family of channels, seek expansion in high-growth regions and develop future growth by investing in production, on-demand platforms and mobile services.

In July, RTL sold U.K. broadcaster Five to British publishing mogul Richard Desmond for some $157 million.

FremantleMedia, which saw operating profit climb 3.4% to $114 million, has made a number of acquisitions this year. In March, it increased its 75% share in Swedish production company Blu — now known as FremantleMedia Sweden — to 100%. The following month it took over 100% of Netherlands-based independent production company Four One Media.

RTL’s strong showing follow similarly positive results among other major European TV players, including German rival ProSiebenSat.1, which saw a 64% rise in net profit last month that sent its shares soaring.

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