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European Media Giant RTL Sees Revenue Rise 3.4% to Record $6.59 Billion

RTL Group on Thursday posted a record operating profit of €1.2 billion ($1.27 billion) as sales increased 3.4% to €6.24 billion ($6.59 billion), its highest-ever revenue.

The company attributed its record performance primarily to increased sales at Mediengruppe RTL Deutschland, its German division and main revenue engine, which has generated a record profit for the fifth consecutive year, as well as to dynamic growth in digital revenue.

RTL Group’s net profit, however, fell from €789 million ($833 million) in 2015 to €720 million ($760 million), due mainly to higher tax charges.

Mediengruppe RTL Deutschland closed the year with a 3.1% increase in operating profit (before interest, tax and amortization) to €705 million ($744 million) and continuing impressive growth. The division has more than doubled its operating profit over the past decade.

The group’s two other main units, Groupe M6 in France and U.K. content division FremantleMedia, likewise reported higher earnings.

Groupe M6 achieved an operating profit of €252 million ($266 million), up from €205 million ($216 million) the previous year, driven mainly by a positive one-off effect that amounted to €42 million ($44.3 million), “which more than compensated for the impact of the higher programming costs for the Uefa Euro 2016 live broadcasts,” the company stressed.

FremantleMedia performed in line with previous forecasts, increasing operating profit by 6.8% to €110 million ($116 million), “reflecting higher profit contributions from content coming through the pipeline as a result of recent acquisitions and investments,” the company said.

RTL Nederland’s saw its operating earnings drop from €101 million ($107 million) to €85 million ($89.7 million) year on year due to lower TV ad sales, higher program costs and start-up losses related to its Videoland subscription VOD platform.

RTL Group described its revenue as well diversified, with 52.1% stemming from television and radio advertising, 21.2% from content, 10.7% from digital activities, 4.5% from platform revenue and 11.5% from other revenue.

In a joint statement, co-CEOs Anke Schaeferkordt and Guillaume de Posch said, “We are a very cash-generative business, giving us all financial means for both — further investments and attractive dividend payments to our shareholders.”

The chief execs added that while they were currently reviewing options for broadband TV, the group’s overall strategy — broadcast, content, digital — and main investment goals remained unchanged. The company plans to further expand and develop its “digital businesses where global scale in content aggregation and advertising technology becomes ever more important.”

RTL Group is also aiming to further grow content production.

“FremantleMedia is making sound progress with its push into high-end drama,” the co-CEOs said. In addition to HBO’s “The Young Pope,” which launched in January, the company is premiering “American Gods” on Starz on April 30.

“Exclusive content like this is the power engine for everything we do in the total video universe,” Schaeferkordt and de Posch added.

RTL Group expects total revenue for this year to grow between 2.5% and 5%, again driven by the group’s digital businesses and Mediengruppe RTL Deutschland, with operating profit to remain broadly stable, ranging from a decline of 1% to an increase of 1%.

On Wednesday RTL Group announced Schaeferkordt would be stepping down from her post to focus on Mediengruppe RTL Deutschland and her seat on the executive board of RTL Group parent Bertelsmann. Bert Habets, CEO of RTL Nederland, will replace her next month as co-CEO alongside de Posch.

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