Prosieben Sat 1 Media

Good morning, ladies and gentlemen. Welcome to our second quarter 2025 result conference call of Proceed & Set 1 Media SE. Today's conference is being recorded. Today's call is hosted by Mr. Dirk Verlander. Please go ahead, sir.

Good morning, everyone, and thank you for participating in Proceed & Set 1's investor and analyst conference call covering our second quarter and first half results for 2025. Today, the call will be hosted by Bert Havertz, our CEO, together with Martin Mildner, our CFO. Bert and Martin will begin by reviewing our financial and operational performance over the reporting period. Bert will then close the presentation with remarks on our specified outlook for the current financial year. After the presentation, we will be happy to take your questions during the Q&A session.

With that, I now pass the floor to Bert.

Thank you, Dirk. Thank you for joining us today for our ProSiebenSat.1 Mediat SE half-year results conference call. Before we turn to our financial and operational performance for the second quarter and the first half of the year, I would like to begin by briefly addressing the increased voluntary takeover offer that was published by MfE earlier this week. We believe This enhanced offer clearly reflects MFE's sustained commitment as a long-term investor and their trust in the future of ProSiebenSat.1. As a management team, we are carefully reviewing the details of the revised offers, as well as the potential avenues for value creation mentioned by MFE. We continue to strongly support collaboration within the media industry and believe that partnerships, such as the ongoing cooperation with MFE, are important to driving growth and strengthening the sector overall. We look forward to ongoing constructive dialogue and joint discussions for the benefit of all stakeholders. Please also note that we will publish our reason statement next week, in which we will also provide a detailed assessment of the increased offer consideration. Let me now turn to the key highlights of our business in the second quarter and the first half of 2025. The macroeconomic environment has shown little to no recovery so far this year. This continues to weigh heavily on the overall advertising market, particularly the TV advertising segment. On an organic, life-for-life basis, meaning adjusted for portfolio changes and currency effects, group revenues declined by 2% to €1,695,000,000 in the first half of this year. This is a solid outcome given the overall weak TV ad market development. At group level, adjusted EBITDA came in at 99 million euros in the first half of 2025, a 40% decline year on year. This was largely driven by the expected drop in high margin advertising revenues and the deconsolidation of Verivox following its sale in Q1 2025. Despite these challenges, we made operational and strategic progress, especially in our core business entertainment segment. In Q2, Join Avot revenues grew substantially by 62% year over year. With our clear focus on local and live content, we also recorded a positive trend in all the market shares. Join celebrated another successful quarter with strong growth in both users and viewing time. Furthermore, we are consistently working to position the group cost efficiently and ensure its long-term financial stability. We have just taken a significant step in this direction by extending 1.25 billion euros of our senior facility agreement, which would have matured in 2027 until 2029 at attractive terms. Martin will go into more details later. Revenues and adjusted EBITDA developed as expected, below prior year levels. However, we anticipate a recovery in the advertising business in the second half of the year. We therefore confirm our target ranges for full-year revenues and adjusted EBDA. However, adjusted EBDA is expected to come in below the midpoint of the range due to development in the high-margin TV advertising business. Let me now hand over to Martin for further details on the financials.

Thank you, Bert, and a warm welcome also from my side. As Bert already mentioned, the demanding economic environment and the effects resulting from our strategic portfolio adjustments, in particular the sale of Rarivox, impacted our results for the second quarter and first half of 2025. Group revenues in the second quarter of 2025 amounted to 840 million euros, representing a 7% decline compared to the same quarter last year. For the first half of the year, revenues declined by 4%, leading to a total of 1,695,000,000 euros. As anticipated, the decline in group revenues in Q2 was driven by lower TV advertising revenues and weaker performance in the dating and video segment. In contrast, the commerce and venture segment continued to deliver strong organic growth. Adjusted for currency effects and portfolio changes, group revenues declined by 3% in the second quarter and by 2% in the first half of 2025. Adjusted EBITDA declined by 40% in both the second quarter and the first half of this year, leading to a total of 55 million euros and 99 million euros respectively. The decline is mostly due to lower highly profitable TV advertising revenues and the sale of Verivox MQ1 2025. Adjusted net income decreased to 14 million euros in Q2 and to zero million euros in the first half of the year due to revenue and adjusted EBITDA development. Here, the decline in operating profits was partially offset by positive tax income of 19 million euros and 22 million euros respectively. Adjusted operating free cash flow was minus 6 million euros in the second quarter of 2025. In addition to the decline in earnings, higher investments in programming assets had an impact as well. Against this backdrop, adjusted operating free cash flow also declined in the first half of 2025 and amounted to minus 50 million euros. This all said, the current economic environment remains difficult, and we are responding to this uncertainty by focusing on consistent cost management as well as further improving our operating business. At the same time, we are also confident that we will quickly and directly benefit from a potential economic recovery in the second half of the year. So, let me now guide you through our individual segments by starting with the entertainment segment. In our entertainment segment, revenues were down by 7% to 570 million euros in the second quarter and by 4% to 1 billion and 113 million euros in the first six months. Entertainment advertising death revenues declined by 10% in Q2 2025. This decline was mainly due to the weak performance of the TV advertising business. Although some early indicators suggested that the economy might be stabilizing, many of our advertising customers still remained cautious about the advertising spending. Despite the aforementioned challenges, digital and smart advertising revenues in the DACH region increased by 2% in Q2 2025. This was mainly due to the dynamic growth of Cloyne's AWOT revenues, which increased by 62%, in which again offset declines in other digital activities. Our distribution business performed well again, achieving strong revenue growth of 10% in the second quarter and 8% in the first half of 2025. This growth was mostly linked to new corporation agreements and, in particular, a further increase in the number of HD subscribers. Our content business declined by 13% in the second quarter due to lower production volumes. For the first six months, however, the business grew by 4% through 69 million viewers. In our other revenue stream, we recorded revenue growth of 14% in both the second quarter and the first six months of the year. This growth was also driven by our super streamer join, which achieved double digit percentage revenue growth in the export business. Adjusted EBITDA in the entertainment segment decreased by 42% to 41 million euros in Q2 and by 44% to 65 million euros in H1 2025. This decline reflects the drop in high margin advertising revenues. Please now turn to page eight, where we now review the performance of our commerce and venture segment. Revenues in the commerce and venture segment remain stable in Q2 2025, despite the deconsolidation of Reryworks at the end of the first quarter. In the first half of 2025, we recorded revenue growth of 6%. Adjusted for portfolio and currency effects, the segment grow an impressive 23% in Q2 2025 and by 16% in the first half of the year. These figures highlight the strength of our organic growth in the commerce and venture segment. We are also pleased to report that our advertising revenues within this segment recovered in Q2 2025, growing by 2% and partially offsetting the decline in Q1. Within the digital platform and commerce business, the beauty and lifestyle vertical with Flaconi remained the main revenue growth driver. The decline in the consumer advice vertical reflects the decontamination of Railworks at the end of the first quarter. The online comparison portal still contributed revenues of 35 million euros into two of the previous year. The adjusted EBITDA of the commercial venture segment declined by 32% in Q2 2025 and by 17% in H1 2025. However, on a like-for-like basis, means adjusted for the portfolio effect from the sale of Railwalks, the adjusted EBITDA increased by 89% in Q2 and by 14% in H1 2025. Please turn to page number nine to take a look at the performance of our dating and video business in Q2 and H1. As the figures show, we again faced challenges during the reporting period. In Q2 2025, revenues of dating and video declined by 27%, leading to a decline of 24% in the first half of the year. These figures reflect a combination of different sectors, including softer trends in the dating and video sectors, as well as currency headwinds residing from a weaker US dollar. Adjusted for currency and portfolio changes, revenues decreased by 24% in both Q2 and H1. Let's look at the performance of each business. Dating revenues decreased by 20% in Q2. This was mainly driven by negative consumer sentiment impacting the overall dating market. eHarmony experienced particular pressure after strong growth in the past, while LaVue demonstrated more resilience, remaining largely stable in absolute terms. Video revenues declined by 35% in Q2. This reflects the business continued sensitivity to economic developments, particularly in the US. The declining US advertising market, impacted by tariffs and consumer restraints affecting virtual goods revenues, were only partially offset by slightly growing subscription revenues driven by our platform migrations in the first half of 2025. Adjusted EBITDA amounted to 13 million euros in Q2 2025, which shows stabilization compared to last year. This is largely due to the decisive actions we took to improve profitability. The revised marketing strategy within dating introduced at the end of Q1, as well as personal measures that took effect in late May 2025 both effectiveness and stabilize the group profitability, residing in an adjusted EBITDA margin on prior year level. Let me now move on the measures we have taken with regard to our joint platform. In order to further advance ProSiebenSat1's digital transformation and leverage synergies with our traditional TV business more effectively, we have decided to streamline the group's structure. In July 2025, the executive board and the supervisory board resolved to merge the 7-1 Entertainment Group GmbH into the joint GmbH. This merger will become effective retroactively as of 1st of January 2025. Moreover, this merger not only streamlines the corporate structure to accommodate the integration of linear TV into the streaming business, but it also provides a tax advantage. As a result of the merger, JOIN's income tax loss carry-forwards can now be offset against the profits of 7-1 Entertainment and its tax group subsidiaries rising after the 31st of December, 2024. JOIN will be able to use existing tax loss carry-forwards in the amount of approximately 160 million euros. The utilization of these loss carry forward is expected to reside in the recognition of a deferred tax income in the amount of 125 million euros for the first time in the third quarter of 2025, which under consideration of counterbalancing effects will benefit our net income by a mid to high double-digit million-euro amount. Corresponding tax cash savings are expected with a low single-digit million euro amount already in this year, a low double-digit million euro amount in each of 2026 and 2027, and a mid-double-digit euro amount in each of 2028 and 2029. As a result, we expect positive effects on our cash flows, totaling 110 million euros for the financial years until 2029. So while all this indicates a potentially substantial positive development, we would like to point out in particular that the utilization of these tax loss carry-forwards in the amounts stated before depends clearly on the achievement of corresponding profits. In addition, the assumed cash tax savings might also be at risk in case of a change of control event in the ownership structure of ProSiebenSat1 of more than 50%. I will now continue with our debt maturity profile and the financial leverage development on page number 11. ProSieben.Eins Group uses various debt financing instruments for the purpose of its group financing, which are regularly adjusted with respect to volumes and maturities. Currently, the group is financed via two term loans and an undrawn revolving credit facility under a syndicated facility agreement and on top on various promissory loans. I am pleased to announce that we just recently, at the beginning of this week, were successful on the extension of our senior credit facility agreement, including the revolving credit facility, which were both originally maturing in 2027. This extension will take effect on the 5th of September 2025, but provided that no change of control event has occurred by that date. If a change of control event happens before the 5th of September, the extension will not come into effect and the senior facility agreement and the maturities there under will remain unchanged. But, of course, the change of control event still would trigger an extraordinary termination right of each creditor. The extension of the agreement will now result in term loans of 810 million euros and the revolving credit facility of 442 million euros being extended to the year 2029. Please note that the RCF is available in the amount of 500 million euros until 2027. Beyond that, it is available until 2029 in the amount of 442 million euros. Please also note that we will repay 250 million euros of the term loans maturing in 2027 using proceeds from the most recent portfolio measures. This means that only a minor part of term loans and RCF under the SFA will remain due in 2026 and 2027. With these measures, ProSiebenSat1 is taking advantage of conditions in the loan market to secure financing on attractive terms for the long term. Moreover, it is worth highlighting that the term debt-related interest expenses are expected to remain largely unchanged, both due to the prepayment and attractive conditions for the term debt. Moving on to our current net financial debt. This amounted to 1 billion and 541 million euros at the end of the second quarter and representing a reduction of 54 million euros compared to the end of Q2 last year. This development reflects the cash inflow from the sale of Rarrivox along with reduced operating cash flow due to seasonally higher programming capex. The financial leverage ratio was at 3.1 times at the end of the second quarter. As expected, this was slightly above the target range of 2.5 times to 3 times forecast for the end of 25. Excluding Veribox adjusted EBITDA contribution for the last 12 months, the performer leverage ratio would amount to 3.3 times. As we will generate all of this year's fee cash flow in the second half of the year, and also expect to receive the proceeds from the sale of our shares in About You and Urban Sports Hub in the second half of the year, we anticipate a further reduction in net debt and financial leverage by the end of the year. With this, I would like to end my part of the presentation and hand back to Bert, who will provide you with an update on the advertising market and our operational performance.

Thank you, Martin. Let's start with a look at the macroeconomic environment. The development of DAG advertising revenues in the first half of the year clearly reflects the ongoing challenging macroeconomic environment in Germany. As shown on page 13, real GDP growth in Germany was negative in 2024. And also in the first half of 2025, it showed no improvement. This indicates that the German economy has not yet returned to a growth band. Private consumption followed a similar trend in 2024. However, easing inflation has helped stabilize household spending somewhat, leading to signs of a recovery in the first half of 2025. Looking at business expectations, we saw a continuous decline starting in mid-2024, with a notable temporary low point reach in January this year. However, for the second half of the year, economic researchers are forecasting real GDP growth for the first time in a while. This is also reflected in the improvement in corporate sentiment since January, despite ongoing uncertainty around US import tariffs. Nevertheless, we are cautiously optimistic. We expect a gradual recovery in the advertising market, driven by continued growth in private consumption and anticipated investment incentives from the German government. Importantly, the advertising business is expected to also benefit from a more favorable year-over-year comparison base. This will be especially relevant in the fourth quarter, where in Q4 2024, we had recorded a sharp decline of 65 million euros in entertainment dark advertising revenues. Given the weak performance of dark advertising revenues in the first half of 2025, a full year increase now appears less likely, even though we continue to anticipate a market recovery in the second half of the year. In the outlook for 2025, we expect a slightly declining development for the full year compared to the previous year regarding the entertainment advertising revenues in the dark region. Previously, we had assumed growth of 2% at the midpoint of our financial target ranges for 2025. This would have meant a recovery of around half of the previous year's declines. Having said this, leading media agencies are forecasting a significant improvement in the second half of this year. This pickup should lead to an almost stable full-year development for broadcasters' combined TV and long-form video advertising revenues. This includes addressable TV, broadcaster video on demand, such as Join, and other digital extensions. Traditional linear TV advertising is expected to decline by a mid-single-digit percentage. However, this should be largely offset by continued growth in digital advertising revenues at the market level. Overall, we hear consistent signals from media agencies, top-down analysis and direct feedback from our clients. Sentiment is improving and investment levels are expected to rise again, especially towards the end of the year. Importantly, the full year performance in 2025 will be more dependent than usual on the fourth quarter, which historically contributed around one third of total annual advertising revenues. While we remain confident in a gradual recovery of the advertising market in the second half of the year, we are not relying solely on macroeconomic improvements. Instead, We have actively launched several initiatives to unlock new advertising revenue growth potential and to drive growth across all segments and industries. This goes from global brands to mid-market advertisers. For instance, we offer many creative impact solutions. A hidden casting of Red Bull within the storyline of Germany's Next Top Model and new branded content formats have generated strong interest among advertisers. It is significantly extending both platform reach and brand engagement. Our advanced TV offerings, including Audience TV and Addressable TV, are strengthening awareness and they help brands to re-enter the TV space by offering more targeted reach, improved measurability, and stronger sales impact. Another example is our use of AI-powered innovations. We recently launched the first fully AI-generated TV commercial for La Callute in Germany. This allows for highly cost-efficient regional activation on both TV and digital platforms. And it's also tapping into budget traditionally allocated to radio or out of home. All of these initiatives are expanding our revenue base beyond traditional budgets. They are a key element of our strategy to strengthen advertising performance through innovation. Another part of our broader strategy to drive innovation and scale in advertising is our partnership with Freewheel. Freewheel is one of Europe's leading ad tech platforms and a subsidiary of Comcast. Our collaboration is an important milestone in our strategy to grow through partnerships and expand our advertising capabilities. The partnership with Freewheel enables pan-European cross-platform and convergent campaigns on the big screen. This will offer advertisers and agencies new ways to reach audiences at scale. At the core of this partnership is our media manager, developed by our subsidiary Virtual Minds. It allows for programmatic TV bookings and will now be available to Freewheel's international client base. This means we can start monetizing the product beyond our home markets and help establish convergent solutions across Europe. Importantly, our commercial partnership for RTL remains unchanged. Especially in the German-speaking region, we continue to work with RTL on developing the planned and important convergent functionalities. Together, these partnerships strengthen our position as a driver of innovation in the European advertising market. Let's now turn to the audience share development on page number 17. Over the past quarters, we've made significant progress in closing the audience share gap to RTL's headlines. It was a challenging start into the year, which was marked by global events and early elections in Germany. After that, in Q2, our channel portfolio showed a solid recovery. Our strategic program investments have clearly started to pay off. This was particularly visible in the first half of 2025. The strong sports lineup in Q2, including ice hockey and soccer broadcasts, generated above average reach and significantly strengthened our prime access. Especially compared to Q2 2024, we can see a strong improvement in our audience shares. We have visibly closed the gap to our two add-alines. Looking ahead, we will continue to expand our investments in local programming with a clear goal of further strengthening our reach and market position in all key time slots across our channel portfolio. Our local content strategy continues to deliver strong results on linear TV and on-joint. In Q2, we saw significant growth across all our major channels, ProSieben, Sat1, and Kabel1. The audience market share on all channels increased year over year. At the same time, Join recorded the best quarter in its history. Compared to Q2 last year, Join achieved a 31% increase in monthly users and a 29% increase in watch time. This success is driven by a mix of proven hits and new formats that resonate across platforms. One of our most successful existing formats is still Germany's Next Top Model. The 20th season delivered 90 million views on Join in Q2 alone, and it continues to perform well on linear TV as well, with a peak performance of over 23% audience share. We also extend and develop existing formats. One example is the extension of the Sat.1 Frühstücksfernsehen, which now also airs on Saturdays and Sundays. That strengthens our daily engagement. Our formats with focus on JOIN include many reality shows and creative formats. One highlight in Q2 was Match My Acts, which reached 10.7 million views on JOIN. That demonstrates the growing relevance of our JOIN focused formats. These examples underline the success of our platform independent program strategy, and they confirm that our investments in live and local content are paying off in linear TV as well as on JOIN. Another key pillar of our content strategy is sports. In Q2, our sports portfolio delivered outstanding results across both linear and digital platforms. With the Bundesliga relegation matches, SAT.1 achieved an average market share of 13.7% amongst 20 to 59-year-olds, more than double than the year-to-date average. On JOIN, these matches generated almost 13 million video reviews. The FIFA Club World Cup also performed strongly with a 14.1% average market share on Sat.1. Our coverage of below 21 European Championship was another highlight. It reached an average market share of 13.7% at Sat.1. The final between Germany and England peaked at a very impressive 42.9% share That gave Sat.1 its best day since 2012. Eishockey is also gaining traction. ProSieben coverage of the World Championship games involving the German national team reached good market shares. JOIN nearly doubled its livestream video views for the German games compared to last year. These results show that our sports rights are not only delivering reach and engagement today, they are also a strategic investment into our future. Looking ahead, we're excited to kick off the new Bundesliga season. We will show the opening match between Bayern Munich and RB Leipzig on August 22nd, live on Sat.1 and join. And we're building for the long term. we've secured exclusive rights for the Handball World Championship through 2031 and the Basketball World and European Championships starting in 2026. With this growing portfolio, we're positioning ProSiebenSattEins as a leading free-to-air sports destination in Germany across TV and streaming. Let's take a look at what's ahead in the second half of 2025 on page number 20. We have a strong pipeline of new and returning content across platforms and channels. This gives us confidence for continued audience growth and engagement. Our strategy remains clear. Everything on join. Every program we commission is a join program. This integrated approach continues to deliver the results. Join has more than doubled its number of users compared to last year and achieved six consecutive record months. In prime time, a lot of beloved formats return with new seasons, like , The Voice of Germany, and Promi Big Brother. And of course, we will also launch new content in the second half of the year, like 50 episodes of The Power, a new reality on JOIN, and fresh, factual entertainment on Kabel 1, like Rosin & Kumpner & Die Büffels. In access time, Sat.1 continues to build on viewer loyalty with daily formats like Die Spreewaldklinik and Die Landaspraxis. The latter will run for a full year in 2026 with 240 new episodes. The response from media and industry observers to our recent content screening was overwhelmingly positive. Journalists praised the strength of our programming slate and the strategic clarity of our everything-on-join approach. With this line-up, we're well positioned to continue our growth trajectory and deliver strong results. And while our local content continues to drive strong engagements across all platforms, we're also investing in premium international content to complete our line-up. That brings me to our next highlight, our newly expanded content partnership with NBC Universal. This deal significantly strengthens our offering of high-quality Hollywood content across both linear and digital. This new multi-year agreement secures nearly 2,000 hours of premium content. It ranges from current theatrical blockbusters like Jurassic World, Rebirth, Despicable Me, number four, and Wicked, to new series like Saint Denis Medical and The Hunting Party, as well as a broad library of iconic titles like Fast and Furious, number nine, The Bourne Franchise, and Brooklyn Nine-Nine. What makes this deal especially valuable is the comprehensive set of rights we've secured. Free TV, AVOD and SVOD. This allows us to fully leverage the content across all platforms. It's a perfect fit for our everything on join strategy. We can now offer Hollywood quality entertainment on demand and for free to a broader audience than ever before. This deal strengthens our position as a leading entertainment provider in Germany, and it reinforces our ability to deliver both reach and relevance across linear and digital. JOIN continues its strong trajectory and has just delivered its best quarter ever. In Q2, the platform reached 9.2 million monthly video users. That is an increase or 31% year over year. It also generated 12.6 billion minutes of view time, a 29% increase compared to last year. And very importantly, AVOD revenues grew by 62%, underlying the platform's growing monetization potential. This momentum is driven by two key factors. First, stronger engagement. JOIN is attracting more new users, and at the same time, existing users are spending significantly more time on the platform. And secondly, a steadily expanding content portfolio, especially in entertainment and sports. This reinforces JOIN's role as the leading free streaming platform in the German-speaking region. We are also strengthening JOIN's position as a central aggregator for diverse and local relevant content. A recent example is our partnership with the Bavarian Media Authority, which brings 14 regional TV channels to JOIN. This supports media diversity and adds value for audiences across the country. Let's now turn to distribution. an essential pillar of our entertainment business. Our HD subscriber base continues to grow steadily. This contributes to another quarter of increased distribution revenues. With 38% HD penetration, many households already receive our channels in high definition quality. Since HD subscribers also reflect the overall development of IPTV and cable subscriptions, This can be interpreted as continued high interest in TV offerings despite the decline in daily usage in the past. But there is still considerable growth potential for HD, particularly amongst satellite households. Distribution plays a key role in financing our content investment, and it remains a highly visible and profitable business for us. That's why it is important to us to continuously work on our existing partnerships as well as on new ones. Let's now turn to our commerce and venture segment with Flaconi, which continues to be one of our strongest growth pillars. Following a strong Q1, Flaconi delivered another excellent quarter. They achieved an impressive 33% revenue growth year on year in Q2. This growth is driven by both a rising share of returning customers, as well as a steady inflow of new customers. What's particularly encouraging is that the majority of new customers remain loyal to the platform and continue to shop over time. This cohort-based growth model is fueling Flaconi's sustained and scalable performance. Besides the solid growth in Germany, we also saw strong international momentum. Flaconi launched in five new European markets at the end of Q2. It is now also available in Sweden, Finland, Denmark, Czech Republic, and Italy. In total, Flaconi is now available in 12 countries. Profitability also improved, supported by marketing efficiencies and operational optimization. Flaconi's performance underlines the strength of our digital commerce portfolio and its ability to scale profitably across markets. Let's now turn to our dating and video segment and the transformation underway at Parshipmeet Group. Parshipmeet Group operates across three continents with nine consumer brands, and it is influenced by a wide range of external factors. That includes macroeconomic conditions, legal frameworks, and evolving user behavior. In both Germany and the US, we are seeing intensified competition and shifting user expectations. Examples are lower commitment and more superficial interactions. In response, the partnership meet group is focusing on strengthening operational performance and stabilizing revenues. This includes realigning the organization, consolidating the technology stack behind several apps onto a shared tech platform, and making better use of existing resources. Since joining as CEO in March, Matthew Gain has led the company through a focused and disciplined first 100 days. The initial priority was clear, stabilize the business and improve cost efficiency. Key actions including a full organizational reset, introducing a new structure to drive accountability, and implementing cost measures, particularly in marketing and personnel. At the same time, Barshad Mead Group introduced a revised group vision to the organization and initiated a more focused strategic direction. and they put new mechanisms for more data-driven decision-making in place. Importantly, Matthew also prioritized reconnecting with teams across all locations and launched new engagement formats. With this foundation in place, the focus is now shifting towards unlocking new growth potential. Parship Meet has redefined its target audience. They now place a sharper focus on the underserved but highly lucrative 40 plus demographic. This means shifting attention to a segment with higher monetization potential and less competitive space. Building on this clear target audience, Parship Meet also redefined its marketing approach. This includes a reduction in inefficient advertising as well as the evolution to a new attribution model that better reflects actual user journeys. As a result, we have already seen substantial improvements in marketing efficiency in 2025. On the product side, Parship Meet Group is running tests to place customer success more directly at the heart of the product experience. These tests include subscription models, pricing, and enhance trust and safety measures. With a clear transformation roadmap, a sharpened strategic focus and a new leadership team in place, we are confident that Parship Meet is well positioned to unlock its full potential, both for the users and for shareholders. Let's now close with the outlook for the full year 2025. Despite the challenging macroeconomic environment in the duck region, and continued volatility in the advertising market, we are confirming our financial target ranges for 2025. We expect a moderate recovery in the high-margin entertainment advertising business in the DACH region in the second half of 2025, following a weaker first half. This assumption is supported by forecasts from leading economic institutes, which anticipate a return to growth for the German economy in the second half. Our outlook also takes into account savings from recently implemented cost measures, planned program cost increases and revenues and earning effects from the sale of rewards. For the financial year 2025, we continue to target group revenues of around 3.85 billion euros, with a variance of plus minus 150 million euros. For entertainment advertising revenues in the DACH region, we expect a slightly declining development year on year. At the same time, we are anticipating continued organic growth momentum in the commerce and venture segment. For the adjusted EBDA in the year 2025, we forecasted 520 million euros until now, with a variance of plus minus 50 million euros. As previously mentioned, we are now specifying our guidance to a figure below the midpoint of the range. Adjusted net income will reflect the development of adjusted EBDA, but will also be positively influenced by deferred tax income resulting from the merger of 7-1 Entertainment Group GmbH into Join GmbH. We continue to target leverage ratio between 2.5 and 3.0 by year end. This reflects both the adjusted EBDA from the sale of IRIVOX and the expected reduction in net debt by the end of the year. In the medium term, the group aims to reduce its leverage ratio to between 1.5 and 2.5. We remain focused on creating long-term value for all stakeholders through strategic investments, disciplined financial management, and competitive cost structures. Recent cost measures are already contributing positively to profitability and are fully reflected in our full year guidance. Ladies and gentlemen, to sum it up, We are navigating in a complex environment with discipline and focus. We are seeing strong momentum in key areas of our business, like our audience shares and our digital reach. We are executing on our strategy, investing in local and live content, expanding our reach and driving innovation across all platforms. We are confident that with the recovering ad market in the second half of the year, we are well on track to deliver on our financial targets for 2025. Thank you for your attention, and we are now looking forward to your questions.

Thank you. If you would like to ask a question, please signal by pressing star 1 on your telephone keypad. If you are using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. Again, press star 1 to ask a question. We will take our first question from Annick Ma from Bernstein. Your line is open.

Please go ahead. Good morning. Can you hear me? Hello?

Yes, we can hear you. Annick, are you still there?

Oh, sorry. Now you can hear me then. Okay. Sorry. So my first question is, sorry, on the advertising market, you expect a recovery in the second half, but I guess you have already a pretty good view on Q3. Can you make some comments around that? My second question is on Flaconi, which seems to be doing well. So how are we thinking about monetizing this asset? Then one on dating, I do see all the changes that you've done on the strategy, cost control, and so on. When can we see more meaningful or what is the internal target for more meaningful changes on the financials for dating? And then, sorry, I have just the last one. Like what has been the feedback you've received from your clients on the back of the RTL and Skype announcement?

Thank you. Yes, thank you, Annick, for your questions.

Maybe I start with your requested guidance for the ad market. As you can see in the numbers, I think for the first two quarters, quarter one was with DACH, total advertising revenues in the DACH region was at minus 7%, and the second quarter was at minus 10%. For the third quarter, we expect the total advertising market to be about flattish, so being TV and digital combined. We currently see that July is trading at low single digit declines, with strong growth, continued strong growth of digital and still TV advertising market being slightly down. Visibility on August and September is still limited. I think it's fair to say that September will be the most important intake for the outlook for the first quarter. September last year was at a quite pronounced minus of 7%, so we're working against easier comps, and so in other words, to repeat myself, for the third quarter outlook, looking at a kind of stable to slightly grow outlook for the third quarter in itself. Second question on Flaconi. Indeed, business is continuing very well, both on revenues and on profitability level and on cash flow. We continue to engage with potential buyers on that. We also have ongoing conversations with potential buyers. And as stated also in previous updates, we eventually continue to look for all options to crystallize value on that, although we're not in a formalized process now on a potential exit. On dating, I think with the new leadership team, especially with Matthew, we have gone through a very detailed exercise on how to reposition the group and how to ignite the group for new growth initiatives. It's fair to say that in the first half and also in the third quarter of this year, we are looking into quite a number of tests around pricing around product offering around more efficient marketing uh strategies going forward for the group and i think based on that we will redesign the group for further growth it's fair to say that this will take a while uh in order to really pay off and we are in in current talks but i expect further actions for growth improvements, not really to kick in until the very beginning of next year. And last question on the combination or the announcement of the RTL Sky Group announcement. I think with regard to our advertisers and agency talks, it's fair to say that as this acquisition mainly concentrates on further building skill in the paid streaming video on demand domain. For our advertisers, this is not really such an important step as it doesn't really improve the inventory base for RTL in that setup. We do think it strengthens obviously the entertainment and sports footprint offering in the paid streaming on the mark part. But our strategy continues to be very focused on building a free scaled DACH super streamer, as we call it. And for that part, I think we have very promising results in the AVOD uptake of the advertisers in the first six months and also the month of July and August look quite promising in that part. So we estimate continued strong growth for join in the AVOD market for the second half, increasingly compensated for the very challenging TV segment that we are currently seeing.

Super, thank you very much.

Thank you.

We'll take our next question.

Julian Rocks from Berkeley. Your line is open. Please go ahead.

Yes, good morning. My first question is on the deferred tax income. You tell us it's going to be mid to high double-digit million euros for the full year, but what does that mean? Because double-digit million is 10 to 99. So if you could give us a slightly more... Precise number for the deferred tax income. That's my first question. The second one is, can you remind us what other digital assets you have left outside of Flaconi and Parship Big Group and whether you would contemplate selling those? It's my second question. And then the last one is you give us the video view time for during 12.6 billion minutes, but is it possible to have the total viewing minutes for ProSieben overall?

Thank you. Good morning, Julian.

Good morning, Julian. Maybe I've taken this question since Martin. With respect to the deferred tax assets, I think you have to differentiate. We were booked with deferred tax assets the first time in the Q3 results, and we clearly said that the number is 124 million. And then you have to see that already these deferred tax assets will be used from a balance sheet perspective also in the fourth quarter. So therefore at the end of the year, you will have a lower amount in fact of the counter measures on the tech side. And therefore it will in the Q3, 124. And at the end of the year, it is probably between, yeah, I would say 70 and 80 million around something like this due to the countermeasures. And this will, of course, increase our adjusted net income. And this is the reason why we said in the outlook that the adjusted net income will be higher than the initially announced 250 million, which are also impacted, of course, by the adjusted EBITDA figures, which we had said that we will be below the midpoint. This is back to your second question, what kind of other assets we will have beside of Flaconi? So, you know that we thought and I would say that within the NUCOM portfolio, so beside partial meet group, of course, you have also to see this as a non-core asset, but in the NUCOM group, we have around home, we have Floyd, and Kemper days. And on top, we have also, of course, Jochen Schweitzer MyDates. There was a third question, which I do not have now. Bert, will you take it over?

Yeah, I'm happy to take over, Martin. This was the question on the total viewing minutes, which is a currency we normally do not disclose to the market. I think what I wanted to say in that is that our digital percentage of total viewing minute is rapidly increasing. It's still low in comparison to other European markets, but it has significantly improved now to the mid-high single-digit percentage of the total viewing time. And in general, it's fair to say that against last year's comms, we have experienced a significant increase of viewing minutes, given the fact that we are working against the big events that were out there last year. And given the promising channel performance of our group, I think we have seen a significant increase of viewing minutes versus last year.

Thank you.

Thank you. I have two questions from my end.

The first is the digital and smart revenue which grew by 2% despite the strong growth in joint. Maybe I missed this, but could you remind us again what didn't grow and how would this trend in the second half? And secondly, you mentioned that EBITDA growth in Flaconi has been quite positive as well. Could you give us maybe an indication as to what the profitability margins look like there, and how profitable could Flaconi be at scale, and what would it need to get to those levels? Some color there would be great.

Thank you. Yeah, thank you for the questions, Nisla.

I think on digital and smart revenues, It's fair to say that as we have told you that the joint revenues are significantly up in the second quarter with 62% increase. Other revenues are being challenged as part of the very challenging macroeconomic climate in general. And I think we've also suffered from some of the third party sales mandates that were significantly lower than last year that has explained the only modest growth percentage of the total portfolio of digital and smart revenues. Coming back to your second question on the profitability and EBITDA performance of Flaconi. We communicated last year that the EBITDA margin of Flaconi was about 4%, which since then has steadily improved and continued to grow. And I think that was the main question of guidance, I think. So we continue to see strong growth and EBITDA improvement, also further margin improvement with Flaconi in the third quarter.

Maybe I will add only one sentence with respect to Flaconi. You know that we have the stabilized business in Germany, which is really mature, I would say, already. We have this internationalization where we are now going into the new countries where you, of course, have different kinds of margin structures. So, therefore, we are still in the growth phase. And your question with respect to the outlook, what would be the margin from a longer-term perspective? Clearly, I think what Bert said, the 5%, it's something which is in the market, in the e-commerce market at least, a really good number already. But I would assume that we can increase this margin already slightly above due to these really high performance and good cost structure perspectives from Flaconi's management.

Very helpful. Thank you.

There are no further questions at this time.

I would like to turn the conference back to Mr. Dirk Volander. Please, for any additional questions.

Ladies and gentlemen, as there are no further questions, this brings us to the end of today's conference call. My colleagues in the Investor Relations team and myself are, of course, happy to assist you with any additional questions after the call.

Many thanks to everyone and goodbye.

This concludes today's call. Thank you for participation. You may now disconnect.