Prosieben Sat 1 Media

Good morning, ladies and gentlemen, and let me continue in English, by the way, and welcome to the conference call on the occasion of ProSiebenSat.1 Group's financial results for the first quarter of 2021.

As in previous quarters, today's conference call will be hosted by Rainer Bourgeon, Chairman of the Executive Board, and Ralf Gierig, Deputy CFO of ProSIM Z1. After an introduction by Rainer, Ralf will give an update on the development of the financial figures in the first quarter. Rainer will then provide further details on the operational development and comment on the increase of the financial targets for the full year 2021. The presentation will be followed by a Q&A session. As always, all relevant reporting documents can be found on our website in the investor relations section. With these opening remarks, I now hand over to Rainer.

Good morning also from my side and welcome to our analyst and investor call on the occasion of our 2021 first quarter results. Rosibensat 1 made a good start into the financial year 2021 despite the ongoing pandemic. Our cost measures our clear focus, and in particular our diversification strategy have proven right and clearly helped us to minimize or even overcompensate the financial impact of COVID-19 on our business. We are convinced that our strategy, which we have been consistently pursuing since last March, is our big advantage. Our Q1 results have shown again that we are well positioned not only in order to overcome the current lockdown challenges, but also in order to realize our sustainable and profitable growth objectives. Besides our successful diversification efforts, growing synergies between our businesses become even more relevant in this context. What are we talking about today? We will start with a short overview of what shaped our first quarter before covering our group financials. We will then give you an update on our operational and strategic highlights and close this presentation with an outlook regarding our performance in the second quarter as well as the full year. Let's turn to slide number three and jump right into it. Our diversification strategy is our key springs in this COVID-19 shaped environment and enables us to successfully defy the pandemic. First, Despite the demanding market environment and subsequent decreasing advertising revenues, we managed to grow our group revenues in Q1 by 1% to 938 million euros. This was driven by our diversification efforts, especially by the strong underlying dating performance, as well as the solid growth of our commerce and venture segment on an organic basis following the WinStar disposal. Both segments are thus proving their value for the entire group. Second, as already announced during our full year 2020 results call in March, the COVID-19 pandemic impacted our advertising business in the entertainment segment in Q1. But we already saw the first signs of a recovery in March and continue to expect a significant improvement in the second quarter. Third, while the revenue decline in our high margin advertising business also had a negative impact on group adjusted EBITDA, our dating and commerce and venture segments recorded strong growth rates here. Besides our strict cost discipline, we were thus able to compensate to a large extent for the COVID-19 related declines in the advertising business. Our group adjusted EBITDA declined by only 9% to €143 million in the first quarter. Furthermore, our EBIT stabilized at €80 million in this demanding market environment. Overall, we were able to reduce our net debt by €295 million versus the end of the previous year's first quarter. Fourth, we are now approaching our annual general meeting on June 1st. In line with our general dividend policy, we will propose to resolve a dividend of 49 cents per share for the financial year 2020, which equals 50% of our adjusted net income. Fifth, last but not least, following our good performance in Q1 and our expectations for the coming months, we are able to increase our full year outlook for revenues and adjusted EBITDA. I will provide you with more details on this later. Before we dive into the operational and strategic highlights, our Deputy CFO, Ralf Gehrig, will now give you more details on our group financials in this first quarter.

Thank you, Rainer. Good morning, ladies and gentlemen, and a warm welcome also from my side. Let me start my part of the presentation with the Q1 revenue overview for the group and our three segments. As you know, our focus is on ensuring that each part of the group contributes to increasing the value of Poseidon Set 1 with the businesses supporting one another. As such, as you already know, we have changed our segment reporting at the beginning of full year 2021. And we are from now on reporting our figures based on the three segments entertainment, dating, and commerce and ventures. Please be therefore reminded that the Red Arrow Studios portfolio companies, as well as Studio 71, are from January 1st on reported in the entertainment segment. Our commerce and venture segment includes Nucum Group and its portfolio companies, as well as Seven Ventures, Bettercom, Mark Guru, and our minority equity portfolio, which until December 31st of last year were reported in entertainment. Our dating segment is unchanged. With this resegmentation, we aim to make our company more synergistic, diversified, and profitable, generating sustainable growth in all business areas. Now let's talk about our revenues in the first quarter. Thanks to the group's good progress in terms of diversification, Group revenues even grew in a quarter where especially advertising revenues have declined as a result of a COVID-19 related lockdown. And still, the business of many of our advertising customers was negatively affected. Nevertheless, group revenues increased by 1% to 938 million euros. Please remember that the first quarter last year was largely unaffected by the COVID-19 pandemic until mid-March. As expected and indicated in our full year 2020 results conference call in early March, group advertising revenues declined low double-digit percent by 13% to 472 million euros. However, as the group continued to further strengthen its businesses outside of the advertising business, This decline could be more than compensated by all other businesses combined. Entertainment revenues decreased by 8% to 610 million euros on a portfolio and currency adjusted basis, i.e. adjusted for the disposal of MILOC and primarily US dollar-related currency effect. The decrease amounted to 6%. Segment advertising revenues fell by 14% due to the persistent pandemic restrictions whereas content revenues increased dynamically by 20% after numerous productions were postponed or stopped due to the pandemic last year. In the dating business, we recorded very dynamic revenue growth of more than 100% or 82 million euros. This development was driven by the first-time consolidation of the meat group, which grew strongly compared to last year. Although organic revenues of the existing matchmaking business declined by 2%, the pro forma revenue growth of 36% of the combined dating business shows the strong performance of the meet group with its live video business as a major revenue driver. Please also note that when commenting on organic growth, we usually only focus on the already existing businesses, i.e. excluding growth contributions of acquisitions. However, given the outstanding growth of the meat group, we have decided to show this as an additional information to provide some color regarding the performer organic revenue growth, including the growth contributions of the meat group in Q1 2021 versus Q1 2020. Please be reminded that we consolidate the meat group since September 2020. Revenues of the commerce and venture segment declined by 8% to €187 million, mainly as a result of the deconsolidation of WinStar Medical. As you might recall, we disposed our 92% stake in early December 2020 at an enterprise value of €280 million. In the first quarter 2020, WinStar Medical still contributed €32 million, which means that revenues of the commerce and venture segment would have amounted to 171 million euros on a like-for-like basis. This being said, on an organic basis, segment revenues grew by 10% supported by the dynamic growth of the beauty and lifestyle business. The online car rental platform billiger-mietwagen.de around home and the experiences business developed notably behind prior year's figures as the prior year's quarter was still largely unaffected by COVID-19 pandemic. Please turn to page six. Group adjusted EBITDA only declined by 9%, which can largely be attributed to the lower revenues of the high margin advertising business. However, this could largely be compensated by content, dating, and the commerce and ventures business, which all achieved a very satisfying earnings development in Q1 2021. In addition, the implementation of several cost and cash saving measures at the beginning of the crisis had a positive impact on the group's profitability. Adjusted EBITDA of the entertainment segment declined by 32% to 97 million euros in Q1 2021. As already mentioned, This development has mainly been the result of lower advertising revenues. In contrast, continued strong growth of the distribution business driven by solid HD subscriber growth and the positive development of the content business had a positive impact on the entertainment segment's adjusted EBITDA. Let me now highlight the dating business, which has become the second largest earnings contributor of the ProSiebenZ1 group. Due to the acquisition of the meat group in September 2020, adjusted EBITDA more than doubled by 17 million euros to 33 million euros. Like the revenue performance, this was also the result of a strongly growing business of the meat group. The adjusted EBITDA of the commerce and venture segment also improved significantly in the first quarter of 2021. Due to strict cost management, all businesses within the commerce and venture segment except for our car rental platform billiger-mietwagen.de improved their earnings contribution. This led to an adjusted EBITDA of 17 million euros compared to 6 million euros in the prior year and, thus, more than compensated the deconsolidation of WinStar Medical. Finally, the reconciliation result which also includes the holding costs improved by 4 million euros to minus 4 million euros in Q1 2021. This can mainly be attributed to the costs related to board changes in the same period last year. Please turn to page 7. Despite a group-adjusted EBITDA below prior year, the EBIT remained unchanged at 80 million euros. Here, lower reconciling items as well as an improvement in depreciation and amortization had an effect. Net income increased by 77% to €66 million, primarily reflecting an improved financial result, which was supported by valuation effects in our minority equity and PE fund portfolio. Adjusted net income, on the other hand, fell by 37% to €37 million, mainly reflecting the decline of the group's adjusted EBITDA, as well as an increase of minority interest on an adjusted basis. Let me now draw your attention to the adjusted operating free cash flow, an important KPI which we introduced from financial year 2021. This metric is defined as operating free cash flow before interest in taxes. It is calculated from adjusted EBITDA adjusted for cash-neutral expenses and income and reduced by capital expenditure and changes in working capital. Since 2021, adjusted operating free cash flow has replaced free cash flow before M&A as the group's relevant cash flow performance indicator. The adjusted operating free cash flow increased from 19 million euros in Q1 2020 to 82 million euros in Q1 2021. This positive development was largely due to timing effects related to program CAPEX and improved working capital. In terms of free cash flow, we recorded an improvement by 25 million euros to minus 25 million euros despite a meaningful increase in cash interest payments due to the prepayment of the 600 million euro notes as well as an increase in cash taxes resulting from a better earnings development at the end of last year. Let us now have a look how this translated into change in net debt on page 8. At the end of the first quarter 2021, the group's net debt amounted to €1,999,000,000. This means an only slight increase compared to year-end 2020 and a meaningful reduction by €295,000,000 compared to the end of Q1 last year. The net debt reduction has been a result of cash generated from our operating businesses. It also reflects the Group's M&A activity over the past 12 months, especially the acquisition of the MEAT Group and the disposals of WinStar Medical and MILOG. As already mentioned, in our full year 2020 results call, the Group made use of a three-month early redemption call according to the terms and conditions of the nodes and prepaid the €600 million senior nodes outstanding at nominal value already on January 15, 2021. As a result, the group's gross debt position could be reduced by 600 million euros from 3.2 billion euros to currently about 2.6 billion euros.

With this, I hand back to Rainer. Thank you, Ralf.

Our financial results in this quarter are underlying, again, to which extent O7S1 benefits from the strategy we are pursuing. Thanks to our clear synergistic group setup and focus, we are strengthening the profitability of our company, enhancing the value of the entire group, and last but not least, passing the macroeconomic challenges in a more robust and successful way than pure media players. With this strategic focus on diversification, we believe that Ainz is thus so much more than a poor media company. And this is exactly what distinguishes us from the European poor players who still need to define their growth path. In this context, let's take a look at the entire strategic picture on page number 10. As you all know, with our segments entertainment, dating, and commerce and ventures, we now have a very synergistic group structure for ProSiebenSat.1. We systematically and synergistically connect these businesses so that they support each other. In short, our foundation for value creation has been laid. Within our entertainment segment, we are fully concentrating on producing relevant local and live content, which we distribute across all platforms. With this platform-independent approach, we are matching the changing consumer preference. This will help us to grow our revenues and earnings in the long term, as will the synergies which we are leveraging within the segment. Our dating segment fuels our diversification. Here, we focus on building an ecosystem of matchmaking, dating, and social entertainment, leveraging synergies within the Parship meet group companies, as well as with our entertainment business. In commerce and ventures, we bundle our entire investment portfolio of digital companies, hence our growth businesses, which we promote by using our unique media power and advertising expertise. Part of all this is an active portfolio management across the entire group, which contains both acquisitions and disposals, once the contribution of a business to increase ProSiebenSat1's group value becomes limited. To sum it up, we are able to drive ProSiebenSat.1 forward by our own power. Let's now take a closer look at our three segments and see how they develop. Slide number 11 shows the overall development of TV advertising revenues in Germany in Q1 2021 compared to the non-COVID-influenced Q1 2019. In total, the TV ad market is in good shape. despite the challenging macroeconomic situation. As this graph highlights, the decline is mainly driven by only three industries, which are clearly impacted by COVID-19 related lockdown measures, whereas the other industries combined are at their respective 2019 level in gross advertising revenue terms. This proves that TV advertising by and large remains structurally unaffected. And the market holds good catch-up potential. Once the sector's services, automotive, as well as tourism pick up again, we will also see a noticeable upward trend within our ad revenue. On slide number 12, we are seeing how this current marketed development translated into our entertainment advertising revenue. While in Q1 the pandemic led to a decline in our entertainment segment advertising revenues of minus 16% in the German-speaking region, we saw first signs of recovery starting in March, leading to a substantial increase of about 40% in April compared to the previous year. In other words, our strong April performance already nearly compensated for the decline in the first quarter. and we even foresee a stronger increase in May, both in absolute terms as well as percentage-wise. These very strong catch-up effects are coming from the food, farmer, as well as the automotive industries in particular, and we are very optimistic that this recovery will further continue and positively influence our second quarter. Slide 13 gives a summary of our operational achievements in the entertainment sector. Q1 proved in a great way how we align our content according to the maximum local life relevant. Our lighthouse shows such as The Voice Kids or Germany's Next Top Model by Heidi Klum were able to increase the individual market shares and to raise our overall prime time viewing time by 1% compared to Q1 2022. We launched successful new shows such as Dealing the Show, and we are more and more focusing on sport. This year, we already aired the UEFA Under-21 Championship Games, and we are currently broadcasting the Formula E races, which not only attracted new target groups, especially the younger ones, but also new advertising customers. Furthermore, we made important steps with regards to advertising technology that will become more and more relevant in the future. On the one hand, our teams are introducing the license-based total video product solution, Seaflight. Seaflight offers new principles and high-quality standards for cross-media campaigns and makes the different media qualities of TV and digital for the first time directly comparable. This technology has been a desire of our customers for a long time. On the other hand, with our new waterfall targeting, we are making ourselves less dependent on browser cookies. This three-step model is based on sociodemographic targeting criteria and combines concrete registration data with added predictions. Here, we are using for the first time The data which we collected via our in-house registration was seven parts in order to improve our advertising product using the higher quality data. And this very successfully. Since its launch in January, the in-target rate has already increased by 40%. And last but not least, our unique content offerings are driving our distribution business. our revenues in this business area grew by 8% in the first quarter. On to slide number 14. Since January, our content production and global sales business of Red Arrow Studios forms an integral part of our entertainment segment. When creating our own content, we are thus benefiting from significant synergies. Best example is our hit social experience format, Married at First Sight. The format has been created by our subsidiary Snowman Productions in Denmark, distributed by Red Arrow Studios International to 30 TV markets worldwide, and produced by our own production unit, Red 7 Entertainment for the German market. We air the show successfully on Sat.Einz, the seventh season last autumn, even for the first time in primetime, and, of course, also on the webpages of ZEINZ and our streaming platform, JOIN. This example underlines how important it was to unite our production business under one roof within the entertainment sector. And we are working hard to fully leverage the synergy potential in this segment. Now on to our dating segment and partnership meet group on slide 15, which we consider our key driver for diversification and future growth. As you all know, the meet group's expertise in live video streaming was one of our key reasons for the transaction. Live video streaming is seamlessly linking our dating with our entertainment business in a very synergistic and value-creating manner. We are providing social entertainment and live formats to engage the audience on our dating platforms and are constantly integrating innovative new live games. While many people do not wish to pay for a subscription, they are willing to spend money on virtual gifts. To give you a feeling for the underlying potential, users spend more than 1 billion minutes per month in the meet group's video streams and played 250,000 dating games every day. This gamifying approach is a powerful engine driving monetization. Already now, live video streaming accounts for more than one third of our dating revenue. And the trend continues. Another important aspect going forward, by providing the technology behind our live video streaming solution, VPaaS, is evolving into a lucrative business and is already implemented with major players within the dating industry. We are hereby developing a business with major revenue potential. Let's move to slide number 16. Next to dating, our commerce and venture segment is also benefiting from synergies with our entertainment business. The online beauty shop Flaconi, for example, grew its revenues by 69% in the first quarter 2021, also thanks to its involvement in Germany's Next Top Model by Heidi Klum as the show's official partner and co-sponsor, whilst Amorelie increased its revenues by 16%, supported by a convincing Valentine's campaign on our channel. While these growing businesses helped to compensate for the COVID-19-related impacts, we also laid the foundation for a post-lockdown recovery of those assets related to tourism and leisure. Our car rental company Billiger Mietwagen, for instance, raised its stock of camping vehicles by more than half. And Regiondo, our booking software company, which is part of Jochen Schweitzer Mayday's group, gained more than 400 new partners that now offer their free time activities using our booking system. In other words, once the current lockdown is history, we are ready to speed up at the fastest possible pace. Slide number 17 summarizes the strategy behind the segment. In Commerce & Ventures, we unite all forms of investment offerings from seed financing and media for revenues or equity deals to our majority in strategic investment. We support these companies with our advertising expertise and the strength of our digital and TV reach. And at the same time, we can gain insights into new market and business models without high entrepreneurial risk. In general, our investment companies focus on business segments from e-commerce and food tech to digital entertainment, e-health, and well-being, as well as data, IoT and insurtech. All of them have in common a promising growth potential, a strong online presence and a high TV affinity. And we are actively developing this portfolio. For instance, we just recently invested or increased our investment in Wellster HealthTech Group, Sanity Group, and Explorer, and are now building up these brands with our media reach. Let us continue with our financial outlook regarding our performance in the second quarter and the full year. ProSiebenzeit 1 Group anticipates a significantly more positive development in the second quarter than in the previous year's quarter, despite the ongoing lockdown measures. We continue to expect advertising revenues to recover strongly in the second quarter, also due to the heavily impacted previous year's quarter in the initial phase of the COVID-19 pandemic, as well as also to continued positive development in the entertainment segment outside the advertising business and in the segment dating as well as commerce invention. As we expect this positive trend to be continued, we have decided to increase our target ranges for revenues and adjusted EBITDA in full year 2021 compared to the outlook published in the 2020 annual report on March 4th, 2021. In total, we are now targeting for full year 2021 without further portfolio changes revenues of 4 billion 250 million at the lower end and revenues of 4 billion 450 million euros at the upper end of the target range after a previous year figure adjusted for currency and portfolio effect of 4 billion 55 million euros. In financial year 2021, group revenues growth would thus be in a range between 5% and 10% compared to the previous year. Based on the revenue assumptions above, for the full year of 2021, we now anticipate a group adjusted EBITDA without further portfolio changes of 750 million euros at the lower end and 800 million euros at the upper end of our target range after a previous year figure adjusted for currency and portfolio effect of 708 million euros. By the way, This increase of our revenues in adjusted EBITDA target ranges also has a positive effect on all the group's other most important financial performance indicators. And let me remind you, if our assumption at the higher end for the German TV advertising market is 4% is too conservative, we remain with our rule of thumb Every increase of another 1% of the TV advertising market means on top sales of 20 million euros as well as on top adjusted EBITDA numbers of the same amount. I hope we could show you today we have managed to actively transform ProSiebenSat.1 over the last year and are seeing the first results now. We are much more focused on our core topics in our local markets. We are creating value and we are much more resilient thanks to our new group setup. We are concentrating on leveraging synergies within and between our segments, and we are raising our profitability step by step, which will become even more visible within the course of this year. With our strategic focus on diversification and digital businesses, we are not oriented towards poor TV broadcasters, but will continue to drive forward our digital business model spanning from Studio 71 to our Commerce Asset and Parship Meet Group. ProSiebenSat.1 is so much more than a poor media company and we are very satisfied with the path we have chosen and the progress we are making. We are convinced that this is the right way for ProSiebenSat.1's future and we will continue to consistently execute the strategy. Thank you very much for your attention. We are now looking forward to your questions.

If you would like to ask a question, please signal by pressing star 1 on your phone keypad. If you are using speakerphone, please make sure your mute function is turned off. Again, press star 1 to ask a question.

We'll now take the first question from Julian Rock from Barclays.

Yes, good morning. Thank you for taking my questions.

The first one is, what was the year-on-year decline of smart advertising in Q1 as a percentage of the absolute amount? It was 39 million last year, I believe, in Q1. Second question, on advertising, you said April up 40%. What was it versus 2019? And you say made more optimistic. So what does it mean up 50, up 60? And again, how much versus 2019? That's my second question. And the third one, dating 2% organic and 36% pro forma. But if I do the difference between organic and pro forma, I mean, there's some overlap, but it gives you a good indication that It looks like meat group was up about 80%, which seems quite a lot. So is there some M&A from meat in the 36% pro forma, or is the 36% pro forma entirely organic, looking at both power sheep on an organic basis and meat on an organic basis?

Those are my three questions. Thank you.

Hi, Julian. I will be taking the first one, Ralph, speaking here. I think your first question was related to digital and smart advertising. This grew double digitally in the first quarter.

Nice double digit. Let me start with the last one.

In the partnership meat segment, the meat group is up 80%. There is no further M&A included in that. If you look on the performer number and have in mind organic and performer is different, the growth is 36% for the meat group, which also supports the clear idea what we did last year when we bought them, that especially the social entertainment piece, video content and so on, and especially also the synergistic approach which we further will work out during this year, to the entertainment business is a very good reason why this is really value creating for us in that situation. So vice versa for the matchmaking business in that, you know, for sure this was not growing a lot. And please have in mind, especially in the German market, the situation that our lockdown still is the case in the first quarter. So if you want to do serious matchmaking, you have to meet people and this wasn't possible in Q1. It's getting better and better. So Germany is ramping up pretty fast and we are very optimistic that when this is happening that we also will see better numbers in that situation too. So when we talk about the advertising performance, right, April was up 40% and by the way, at least what we learned also from several analysts talking to RTL, I think that's a number, you know, which is pretty similar to what we've also seen from them. For May, I clearly have to say it looks very, very good currently. There, we are a little bit more optimistic what we have heard than RTL. And I would say we are clearly, you know, somewhere around above 60% currently compared to last year. And that means that we are also above in May 2019, right? And that's, you know, similar to the situations which you have seen, for instance, from ITV in the UK market, which are a little bit earlier in their lockdown measurements, you know, and getting back to normal. We expect a similar situation for Germany, and we see advertisers to come back currently. And I clearly have to say, TV is really strong overall, ProSieben, that one's a little bit stronger than the other in the market due to the change of our program due to the situation. But, you know, we have to see how this will work out at the end of the year. But we are currently very optimistic that we have done a lot of things right here. That's it, I would say.

Okay, yep. Very good. Thank you very much.

All right. Our next question comes from Anik Mas from Exane BNP Paribas.

Good morning. My first question is on Flaconi. I understand this asset is not up for sale anymore. Can you maybe give us the thought process behind that decision? Is it a delayed sale? Is it no sale at all? Why is that? And staying on Flaconi, maybe if you could give us an indication on Q2 trends as well. And then following on to Julian's question, just around dating and Q2 trends, I guess I understand that trends should improve as markets open. Maybe could you give us an indication of how eHarmony and Parship have developed in Q1, and what do you expect at this stage for Q2? I guess comps are not getting easier, so... Would we expect more declines or how are you thinking about those two subdivisions? Thank you.

We'll start with the second one. For sure, you know, the dating business is getting better in Q2 when the market will open. That's also our assumption. Matchmaking means, you know, eHarmony as well as, for sure, the Elite as well as Parship Meatbrand. On the other side, we have tough comps then for social entertainment of the meat group from last year because the growth directly went into it. But currently, we don't see their decline. So we have to see how this will develop. I think we can discuss it further on when we have finished the second quarter because we have to see, especially in Germany, how the lockdown measures work. And what we have learned in the U.S. is you know that there is a reluctancy of getting the second shot. We won't have that situation in Germany because Germans are very disciplined. You know, even if you're a little bit late, everybody has already their second date in their calendar of those who got the first shot. So that will happen. So I think Germany will ramp up pretty fast when it gets to getting more medicine in. And I can tell you from the region I live, you know, that's now going to the local doctors and that's ramping up really fast. So I'm very optimistic that, you know, the situation will change, but we have to see that in North Rhine-Westphalia, which is the biggest part in Germany from the population, vacation starts at the 5th of July. And, you know, up to this point, we will see, in my opinion, how the situation is. I'm very optimistic for North Rhine-Westphalia that, nearly everybody gets the possibility to get their first shot. And that would mean a major change. We're already discussing in Germany if, you know, the school kids, you know, above the 12 years will get their vaccination, the first vaccination in our summer vacation. So, you know, it's getting up. It's getting better. Yes, we were behind. That's what you can see in Q1. But, you know, very optimistic that this will change. And that would mean, especially for matchmaking teams, and all this kind of stuff that we then also should have a better ground that people will meet again. Flaconi, we never said that we have a process running. I know that there are a lot of speculations, but it's like always. If somebody reached out to us and we clearly said that especially beauty and lifestyle is an area where there could be a possibility that we are in a certain time of period not anymore the best owner. But currently, when you see our growth rates, perhaps we are a very good owner with 68% growth. And honestly, you can see the synergies. The main reason, by the way, was, and we tested it the first time, that we made Flaconi the main sponsor of Germany's next top model via Heidi Klum. and that's clearly one of the push you know we get out of that and for lots of advertisers also listening to our calls you know a good sample of how strong TV can be and now we have to see how this will develop on further and you know we are not ruling out that if the right one comes along with the right price that we could discuss but you know currently that's not the case so that's the reason why we keep on moving and let the company grow.

That's great. And so how should we think about the growth rate for Flaconi in Q2, given now the comps are really going to be super tough and there's no Adi Klum in Q2?

Annick, I will take this question. I mean, you should expect from Flaconi in Q2, again, solid double-digit growth percentage-wise. But maybe not as strong as Q1. But very, very good growth.

Yeah, we're not speculating on that because it's too early. And again, what we haven't seen is a decline. People learned that e-commerce is an important factor. People figured out it's working. We have the pandemic currently still there, so in Germany especially, and that's the reason why we're not expecting a major change. That's the good thing about the April numbers already because In April, in Germany, there is a lockdown. It's still existing. In the Bavaria region where we live, up to yesterday night at least, you're not allowed to be out of house beyond 10 o'clock in the evening. You have to do click and collect. At the end of the day, the situation hasn't changed a lot. Therefore, especially the numbers for May are very convincing. for the TV advertising because it shows, you know, how people have built up trust in these kind of advertising and that gives me a positive momentum and now we have to see how this will develop going on further. And yeah, we are very happy with what we've reached up to now.

Okay, thank you.

Our next question comes from Connor O'Shea from Kepler Chevron.

Yes, good morning, everybody. Thanks for taking my questions. Three questions for me as well. First, Rana, I wonder if you could just remind us on the month-on-month declines in Q2 last year, April, May, June, just so we get a sense of that, and whether you think this year's strength in May has a little bit of... avoidance of the Euro 2021 on public stations in June and July? Is there perhaps an impact on that, on your market share, a temporary boost? Secondly, can you just update us on the impact on TV viewing, linear and otherwise, in the first quarter with the lockdowns? And then final question, just in terms of what you're thinking about full-year programming costs. Obviously, after a longer lockdown than expected in Q1 and a softer ad market in Q1. Are you sort of rethinking a little bit your full year programming costs and that maybe you might have made some temporary savings during lockdowns that will not necessarily cycle back in later in the year?

So let me start with the last two questions and let's talk a little bit about TV viewing. What we have learned during the first quarter is due to the pandemic situation that especially news were very successful. That's the reason why the RDA and ZDF were very successful. We were stronger than RTL, so we gained market share here. But you know that you can see out of that, you know that our strategy to be more relevant, more local, getting news in source is totally right. especially the young people are very interested in that and you could see that also that you know several of the politicians who want to be Chancellor in Germany now coming to ProSieben to present themselves because here at ProSieben they reach the young target groups. This is like you know a very strong and good positioning of our TV channels and that has to do And that's very successful. Again, you know, we had the situation, especially with news and all the others, that people were informing themselves via TV, also with all the fake news in the Internet and so on, you know, also is one of the main reasons for that, for sure. And we all learned that. And that doesn't mean for us, you know, that we have to increase our programming costs about that what we have already announced. So we said, you know, in our guidance at the Iran, and that's not changing, that we will spend approximately a billion and that we have the opportunity to have a variance in that of approximately 50 million. But the 50 million is that what we can discuss, but the rest not. So at the end, because the year is planned and month to month declining Q2 2020, You know, let me remind you a little bit. I think on average it was minus 40%. We had in April and, you know, I take it all off my head. It's approximately minus 36%. May was minus 41%. And June was approximately minus 33% because it was already getting better a little bit. May is a very important month. It's a big month. So at the end, you know, this is relevant for the European Championship. Honestly, yeah, this is like, you know, I think when... And I can say personally, I'm really a soccer fan. But if I have the opportunity to go in a restaurant and to eat with my family and meet some friends, I think... Besides seeing Germany, I'm not watching so many games in June. Because after more than 15 months at home, I would be happy to go out. So I'm happy that I don't have the rights. We will see if I'm right or wrong. What we see currently is that especially beverage advertisers come back to us because they are preparing themselves. Also, everybody has the hope that in the summer months, you know, people can sit outside, eat and drink, which I'm also looking forward to. So at the end of the day, we will see. I don't think that, you know, that we will have a huge decline in that in June. We will see. I believe that in the summer vacations, when people then have the opportunity to go out that we will see that. But you know that normally July, August, September are always summer months which is from a performance point of view always our weakest quarter. So therefore we are not expecting that this will have a huge influence. Most decisive will be again the fourth quarter because that's normally in a normal year 40% last year fourth quarter if you remember that was very strong and we have to see if we can repeat that and that's the reason why we stay conservative in the entertainment business even having provided you with our rule of thumb which is that every percentage point above the upper end of the 4% market as well as our growth you know will create 20 million euros more in our revenues and 20 million euros more on our profitability. So if some analysts are right, you know that this could be 5% or 6% for sure, that will increase our guidance again. We will know that better when we discuss the next time after Q2.

Okay, very clear. Thank you. Thank you, Arne.

Again, if you would like to ask a question, please signal by pressing star one. Our next question comes from Nizal Nizer from Deutsche Bank.

Great. Thank you. I have two questions for Mayan, actually three. The first one is on the Parshit Meet group and the social video streaming that seems to be doing really well. Could you remind us again how you monetize this particular business and also how do you monetize it when you do share the technology with other parties? Some color there would be great. And secondly, you mentioned that focusing more on sport would be important going forward. Would that come up with a step up in investments from your end or is that already baked into the programming spend that you've targeted for this year? Some color on how you're thinking even beyond 2021 would be great. And my last question is on Flaconi. Could you remind us again about the profitability profile of Flaconi at the moment, where they are geographically and are you planning to take it to more markets in the near future? Thank you.

First of all, sports is already included in our guidance. You know that we will start with several games of the Bundesliga. So we have the Super Cup, we have the opening of the Bundesliga and we also have then in 2022 the relegation games between first and second league we have the start of the rematch you know the 19th day of the you know the first Bundesliga as well as the second Bundesliga and then we have another two games so overall events that's all priced in that's all included in our guidance for the investment same for Formula E and all the other stuff. So that's all there. The PMG, by the way, you have, you know, in our presentation there is a QR code in the presentation where you can easily figure out how the monetization and the products look like. Perhaps that's very helpful to give you a feeling. It's most of the case in the social entertainment area gifting. means that you have the possibility, for instance, to book a limousine for your most loved or most interested in. And so that's, at the end of the day, how it works. But I think QR code is great, and that's how it works. I don't want to be too precise, as I said. You know that we are planning... GA is planning to sell their stakes at the beginning of next year and when it comes closer for sure we also will then give more guidance on how that works. So beginning means beginning next year is the current timeline as we already announced in the past. I've also seen rumors we were asking for that we can do that faster but that's not our timeline. Our timeline stays based on the numbers of 2021, 2020, and 2019 that we perform the IPO beginning of next year. Profitability profile of Flaconi. Yeah, we are break even, a little bit above. And what we do currently is we let the company grow because we want to take market share from all the others. Regional-wise, it's a platform business. So that means we are in different countries for sure most successful in Germany. That's the majority, but we also are in other countries based on the platform. We also discussed in the past that we increased our inventory storage possibilities to a huge amount because we believe that there is huge growth going on further. And as we said before, we can see that also double-digit growth, as I was mentioning before, is happening already in Q2. It's Poland, Austria, it's all small currently, but the platform is developing and we are going into these countries.

Great, thank you.

Ladies and gentlemen, this was the last question for today's call. As always, my colleagues in the Investor Relations team and myself will be available for any follow-up questions shortly. Thank you and goodbye.