Prosieben Sat 1 Media

Good morning, ladies and gentlemen, and welcome to the Q3 9-month 2020 results call for ProSiebenSat-1 Media FE. This conference is being recorded. Today's call is hosted by Mr. Dirk Voigtlander. Please go ahead, sir.

Yes, thank you, Operator, and good morning, ladies and gentlemen, and welcome to our Q3 2020 results conference call. As always, today's call is hosted by Rainer Boujean, Chairman of the Executive Board and Group CFO, as well as Ralf Gehrig, Deputy CFO of the group. Rainer and Ralf will first present the group's financial results for the third quarter 2020 and provide an update in terms of the operational development as well as recent portfolio changes. The presentation will be followed by a Q&A session. Web links, dial-ins, and the presentation material were made available via email this morning. The presentation can also be accessed on our website under the section Investor Relations. With these opening remarks, I now hand over to Rainer.

Good morning also from my side and welcome to our Q3 analyst and investor call. We are still in the midst of the COVID-19 pandemic with challenging macroeconomic conditions. In the third quarter, we however saw a recovery in the German economy and in the advertising market from which we at ProSiebenSat.One were able to benefit. This is also reflected in our financial figures. And we were busy in the past months to further build the strategic foundation for continued value creation now and in the future. Let's have a look at today's agenda. We will start with a quick overview of our Q3 highlights and then continue with our group financials. Given the circumstances, we recorded satisfying results and saw recovery in our revenues and earnings compared to the heavily COVID-19-influenced second quarter. In the third section of this presentation, we will talk about some of our key projects this quarter that will be important for our strategic way ahead. And, as announced during our last call, we will also be discussing our financial outlook for the full year 2020. Let's start on slide number three. Q3 was a quarter of financial rebound and long-lasting strategic actions. ProSiebenSat.One is an early cycle company, meaning that we felt the COVID-19 influence on the economy and thus on our business considerably in the second quarter. But we now benefited from the economic recovery much faster than other companies in the third quarter. Despite the still ongoing COVID-19 effects, our group revenues were at previous year level Besides the initial consolidation of the meat group, also recovering advertising markets since July played an important role. Whereas in the second quarter, our 7-1 Entertainment Group showed a revenue decline of 34%, we now recorded a decrease of only 5%. Our cost-saving measures paid off. Our adjusted EBITDA was increasing in this quarter by 13% and for the first time since Q1 2018. My executive board colleagues, Christine Scheffler, Wolfgang Link and I made a clear commitment to build a more profitable, more focused, more diversified and more synergistic company. We made important step towards reaching this objective in this quarter. We continued our group reorganization in our newly created 7.1 Entertainment Group. Our content, digital and sales teams are now working in an integrated way to make our entertainment business fit for the future. And with the launch of our partnership meet group, we created one of the leading global online dating players that will significantly support our diversification. We made progress in our portfolio management where we analyze regularly if we are still the best owner for the different portfolio companies. By selling the hosting solution provider Mylock in September and the sale of the healthcare product provider Winstar Medical signed in October, we took another step towards a more sharpened and synergistic portfolio. So while successfully steering ProSiebenSat.1 through the COVID-19 pandemic, we also worked hard on executing our strategy for long-lasting value creation. Let's now take a closer look at how the different sectors developed in the advertising market in the third quarter. Please turn with me to slide number four. You all know that entire industries cut their advertising spending in the second quarter's economic downturn provoked by COVID-19. Just take the travel, events or beverage industries, for example. But as you can see in this graphic, first sectors recovered in the third quarter, and came back strongly, such as the automotive sector, with its new electric vehicles. Also, the food industry will be returning before Christmas. And the new PlayStation and iPhone are being launched. Nevertheless, other key advertising sectors like tourism and the beverage industry still reflect the COVID-19 impact. Within this market environment, we can be satisfied with our performance in the advertising business in this quarter. The development in the fourth quarter will highly depend on the further development of the pandemic and whether our country will manage to get the rising numbers of daily new infections under control again. We trust in the German federal government and the state authorities to do their best to prevent a second nationwide complete lockdown. But there is of course a higher uncertainty today than it was some weeks ago. Just to remind you the importance of this for our full year results. In the fourth quarter, we traditionally generate around 40% of the adjusted EBITDA for the entire year, even in a normal year unaffected by a crisis like the COVID-19 pandemic. With this, I hand over to my deputy CFO, Ralf Gierig, who will explain how our advertising business is reflected in our group financials and who will run you through our results in the third quarter and the first nine months of this year.