Television Franchise

Good afternoon, ladies and gentlemen, and welcome to the TF1 Group's conference call. At this time, I would like to turn the call over to Philippe Denry, CFO. Sir, please go ahead.

Thank you. Good evening, ladies and gentlemen. Thank you for joining us. I hope that you are all keeping safe. Already one year into the pandemic, the TF1 Group has remained committed to ensuring the health and safety of all staff and stakeholders. taking necessary sanitary measures while ensuring business continuity. I will start with the main key points, as usual, and then give an overview of our results for the first three months of 2021. Then I will be happy to take questions. First, let's move to financial results for the first quarter of 2021. Once more, the TF1 group has shown its agility and its capacity to improve its performances. Group revenues stand at 510 million euros. They are up by 3.2% compared to the first quarter of 2020, thanks to a growth of head-spanning and significant increase of revenue from new in. Profitability rose to 57 million euros at end of March of 2021, a plus 35% increase versus last year. The group is back to the double-digit profitability levels with an operational profit rate of 11.1%. This was achieved while keeping costs in check and our ratings on all our media brands. With €16 million growth on total revenues, we deliver a €15 million increase on the operating profit of the group. It's a profitable growth for the group. As a leader, TF1 seeks to make a real difference through its ESG involvement. In Q1, the channels launched a third edition of the Experts à la Une program, which promotes diversity on news shows thanks to the empowerment of female experts. Through better inclusion and exemplarity, we believe we can explore untapped potential. The recent prime status awarded to the TF1 group by the international rating agency ISS illustrates the sustainability performance. As a summary, I would point out the results of our three main activities for the first quarter as follows. First, broadcasting revenues were up by 1.4%, thanks to a 2.5 million increase of ad spending with our channels. This performance was achieved while persevering the value of our screens. In Q1, the programming investments were made, helped keep a very high content quality profile while significantly increasing our ratings, both on the four years and plus and on targeted population. Among the individuals aged between 25 and 49, The group's market share stands at 30.4% up by 1.6% versus last year. Second, the studio and entertainment segment performed very well with revenues up by 9 million euros plus 13% due to a significant increase in the production business which largely compensates the lockdown of theater, musical, and cinema, and the stop of our physical video business. Studio benefited from several bases of comparison. Profitability, which stands at 15%, is higher than in Q1 or 19, which stands at the time at 14%. Third, regarding the unified activity, revenues increased by a bit less than 4%. mainly thanks to e-commerce revenues, while advertising revenues were slightly down due to some disappointment of our U.S. business. Let's now get into more details for each activity. I will start commenting on the performance of the broadcasting segment. Revenues are at about 5 million euros year-on-year, with an increase of the operating profit of almost 4 million euros. Advertising revenues increased by 2.5 million euros year on year. This reflects a good top line level despite an unfavorable basis of comparison in the first two months of the quarter while some sectors such as leisure, cosmetics and tourism have not yet come back. The other revenues within the broadcasting segment are up by 2.9 million euros. Secondly, regarding the broadcasting schedule cost, the group has shown again its agility. It continued to reinvest in fresh, innovative programs, keeping costs broadly flat. This contributed to very good performance for the group channels, which together posted a 0.8 point increase versus last quarter in market share for people aged four years and plus. Regarding our ratings, The group has enjoyed a very good performance with 27.2% on 4 years and plus, the best Q1 since 2007, 33.7% on women below 50, best Q1 since 2010, and on the 25-49 age people, 30.4% best Q1 since 2013. Moving on to studio and entertainment segments, revenues increased by 9 million euros versus last year, mainly due to an excellent performance of our studio business, Newen, as already commented. Revenues at Newen in Q1 2020 were positively impacted by a strong demand for content as well as a catch-up effect since in a COVID context, some productions initially planned to be delivered in 2020 were postponed to 2021. The book of order grew in value terms compared to Q1 last year. The book of order end of Q1 represents around one year of activity. As displayed in the 2020 annual results presentation, we are pursuing a value-added partnership with platforms, and we have recently obtained a green light for a project for Netflix called Diamonds by our subsidiary in Belgium, Demensen. I would also like to note that all shootings are taking place at the moment in the different countries in full compliance with sanitary measures. The entertainment activities show their revenues increased slightly into one thanks to our music business. You have noted that the closing of the selling of TF1 games and Deux Jardins has taken place in April, this business will be deconsolidated starting from Q2 2021. This segment posted a current operating profit of €12 million, up by €10 million year-on-year. On Unifar now, revenues stand at €37 million, up by €1 million compared to last year. Advertising revenues are slightly down despite positive performance from French websites such as Marmiton. E-commerce activity grew this quarter due to the good performance of My Little Paris and Gambette Box subscriptions. Business solution activity is slightly down due to the situation, but is expected to improve during the following month. Current operating profit amounted to minus 2 million euros in line with the seasonality of the business. Just a quick word on the net profit. The net result attributable to the group stands at 34 million euros for the first quarter of 2021, including the investment in Salto. I remind you that Salto was launched in October 2020, and so we had no loss recognized in our accounts for the third three quarter of 2020. Let's now comment on the cash position. Excluding these obligations, the TF1 group had net cash positive €51 million at end of March 21 compared to a net debt cash €1 million at end of 20. The TF1 Group has generated during the quarter a free cash flow of around €50 million. It has a sound financial position and access to available bilateral credit facilities for more than €1 billion. Let's conclude now with the outlook. In the coming months, we will benefit from a strong lineup, including fresh and innovative content, as well as big events such as the Euro football competition. The Group's ad sales house of the broadcasting and unified segments will keep on developing new offers thanks to the segmented TV and programmatic, expecting to draw new clients and increase value. In the production segment, the acquisition of the Eisen Studio, which operates in Spain and in the UK, contributes to extend our European footprint and capture value from markets where demand for content production is particularly high and gives us an additional possibility to generate synergies. As proven in 2020, the group remains agile, showing its capacity to adapt, and to save opportunities in a growing total video market. Well, that concludes my review of the TF1 Group's results for the first quarter of 2021. Thank you again for having joined us. Should you have any questions, please do not hesitate to ask. And finally, I remind you that a recording of this conference call will be available. You will find the connection details on our website.

Ladies and gentlemen, if you wish to ask a question, please press 01 on your telephone keypad. The first question comes from Annick Mas from ExanBNP Paribas. Madame, please go ahead.