Television Franchise

Good evening, this is the conference operator. Welcome and thank you for joining the TF1's full year 2025 results conference call and webcast. As a reminder, all participants are in listen-only mode. After the presentation, there will be an opportunity to ask questions. Should anyone need assistance during the conference call, they may signal and operate by pressing star and zero on their telephone. At this time, I would like to turn the conference over to Mr. Rodolphe Belmer, Chief Executive Officer, and Mr. Pierre-Alain Gérard, Executive VP Finance, Strategy and Procurement. Please go ahead, sir.

Good evening, everyone, and thank you for joining us for our fully results presentation. As said, I'm Rodolphe Belmer, the CEO of the group, and along with Pierre-Alain Gérard, the CFO, we will present TF1 Group 2025 results. Let's start on page three with the key highlights of the year. Starting with audience, in 2025, TF1 Group confirmed its leading position both in terms of overall audience and among younger generations. TF1 group made progress in all targets year-on-year, with an audience share rising by 1 percentage point among women below 50 and by 0.4 percentage points among individuals aged 25 to 49. TF1 channel maintained its high audience share in the 4-plus target group, reaching 18.7% stable year-on-year and up 0.1 points versus 2023. With a distinctive editorial stance on the latest international political and economic news, LCE has achieved an audience share of over 2% in the 4-plus target group since it moved to DTT channel number 15 in June and records the strongest audience growth among news channels over the past year. TF1 Group's content achieved unparalleled scale, reaching 16 million monthly viewers, equivalent to 94% of the French population, a unique position in the media landscape. Focusing on the individuals aged 15 to 34, our content were watched by 15 million people per month, 15 million of this age, representing 97% of this age group. In digital, TF1 Plus attracted 38 million streamers per month on average in 2025 and 42 million streamers, users, in October 2025, our new record. Financial performance now, the group consolidated revenue amounted to 2.3 billion euros in 2025, almost stable, like for like, and at constant currency. This amount includes an advertising revenue of 1.6 billion euros. a 4% decrease year-on-year, reflecting the structural linear market decline exacerbated by unstable environments throughout the year, in particular in the fourth quarter, due to France's political and fiscal situation. Despite these headwinds, TF1 Plus maintained its strong growth momentum for the second year in a row. Its advertising revenue rose by nearly 40% year-on-year, to close to 200 million euros, largely outperforming, should I say, the digital advertising market. Our studio business, recording a good momentum with a 9% growth, margin from activities stood at 11%, in line with our revised target. Finally, the group reinforced its financial position with net cash of 515 million euros at end December, up 9 million euros year-on-year. Overall, I would say that in a complex environment, the group achieved its revised 2025 targets, demonstrating the success of its strategy as well as its resilience. Now, let's go to more details. We'll first give you an update on our business segment, then we'll provide additional information on our financial results, and then we will update you on our strategy and the outlook for the next year. And we'll close, as usual, with the Q&A session, starting with a quick update on our linear streaming and studio business lines. I'm starting on page six with a quick reminder of why television, and of course TF1 in particular, offers a unique value proposition in the media landscape, unique and distinctive. Rich remains our core competitive advantage, underpinning the unmatched value we deliver to the advertisers and viewers alike. In 2025, TV overall reach stood at 77% daily, while TF1 Group maintained an unrivaled position, covering 53% of French people every day, well above any other media business, such as YouTube, SVOD services, and TikTok. On the right-hand side of the slide, you will see that Beyond Rich, TF1 also delivers a superior return on investment for advertisers. On the French TV market, TF1 delivers industry-leading ROI for advertisers, with every euro spent on our channel generating 6.3 euros in incremental sales, a figure that rises to 6.6 euros during prime time, outperforming all TV competitors. The return for our DTT channels is also at 6.6 euros, which is also above, of course, any other TV player, underpinning the strong resilience and pricing power of the group in the French market. It's worth noting that within the French border video advertising market, TF1 currently delivers a similar ROI versus online video platforms, demonstrating the group's competitiveness and strategic positioning to drive incremental market share gains. Turning to page seven now, in terms of audience share, the group maintained its leadership across commercial targets and TF1 channel, the TF1 channel retained a significant lead over its main competitor, ahead by almost 10 points among women below 50, with an audience share of 23%, and ahead by 8 points among individuals aged 25 to 49, with an audience share of 20%. The TF1 channel recorded the best ratings in most genres, like French drama, entertainment, and movies. The group's news, which plays an essential role in the democratic debate in France, continued to strengthen its position with 99 out of the 100 best news ratings of the year. Our news programs moved further ahead of their competitors and our morning show, Bonjour, became the second most popular in that category. LCI, our news channel, recorded the fastest audience growth in the year for our new channel since the DTT re-numbering. Let's move to streaming. Page 8. Our strategy is to leverage the group's solid content lineup to address both linear and nonlinear exploitations. 20% of total viewing today of the group comes from nonlinear consumption among individuals aged 25 to 49 for TF1. This share is even higher on our strong franchises, reaching, for example, more than 80% for the reality TV genre and close to 50% for our daily soaps like Reveille la Vie. In just two years since launch, TF1 Plus has established itself as the leading free streaming platform for French-speaking audiences, driving growth across all key metrics from brand awareness to monetization. In terms of brand awareness, TF1 Plus reached a level of 81%, a three-point increase over last year. The application had first visibility across 69% of households with connected TV devices, up from 68% at the end of 2024. Regarding consumption, JF1 Plus offers more than 35,000 hours of programs available at any time, including aggregated third-party content. On average... The platform attracted 38 million streamers per month in 2025, compared to 33 million in 2024. This number increased quarter after quarter in 2025, reaching 41.5 million streamers on average in Q4. Streamers visited the platform 4.7 times per month on average in 2025, up 3% over the year before. As a result, 1.2 billion hours of content were watched on TF1 Plus in 2025, almost 25% ahead, France's second largest platform. Based on site-centric figures, consumption rose by 12% year on year. Ad pressure reached 5 minutes and 40 seconds per hour on average, up 15% from 2024, with a target of around 6 minutes on the mid-term. And finally, CPM stood at 13.5 euros on average, broadly stable compared to 2024, with a target of around 15 euros in the mid-term. The strong performance translated into a 36% increase year-on-year increase in advertising revenues, with TF1 Plus almost reaching the 200 million euros milestone, a proof of its growing appeal among advertisers. After launching TF1 Plus in January 2024 and having positioned it in the advertising market as the premium alternative to YouTube, the group has entered, in 2025, the second phase of its strategic plan. The first element of this second phase is a new form of monetization on TF1+, a new form of monetization that involves micropayments. This initiative is inspired by the mobile gaming industry, where it has proven largely successful. Since last September, Streamers visiting TF1 Plus have had access in return for a small payment to new features like previews of our Tom programs or ad-free content, as well as an exclusive live channel, for instance, of our show Star Academy. These offers have been adopted successfully. fast by TF1 streamers with 700,000 transactions recorded between September and December. And these initial figures are very promising because the macro payment offers have been deployed only in a small perimeter of devices since most telcos have not been deployed yet. On the TF1 Plus application, an environment where the offer is fully deployed, Streamers we have converted to this offer have made, on average, three transactions per month between September and December. Note that the TV screen only represented 15% of micropayments transactions since launch, showing that there is room for progress once the offer is fully deployed, notably across telcos. and we're confident this initiative will unlock a significant revenue stream in the medium term. Page 10, update on Studio TF1. Studio revenue totaled 376 million euros in 2025, up 9% year-on-year. This good performance was not only due to the contribution of JPG acquired during the summer of 2024, The soap to pour la lumière, All for Light in English, broadcasted on TF1 and Netflix. The production of the Flemish version of Dancing with the Stars. The deliveries to streaming platforms of premium series like Mertoy for HBO Max. And the successful theatrical releases of key movies like Chassegardée 2, Game Reserve II ranks number five in terms of ticket of admissions in the French market in 2025. Now turning to the financial performance with Mr. Pierre-Alain Gérard.

Thank you, Adolphe. Good evening, everyone. Let's move now to a more detailed breakdown of our financial results for the full year 2025. You will find additional information in our consolidated financial statements and their notes as well as our management reports all of which are available on our website. First, a word on revenue on page 12. The TF1 Group's consolidated revenue amounted to 2.3 billion euros in 2025, down 2.5% year-on-year, but almost unchanged, like-for-like, and at constant FX. The small gap we have with the consensus mostly relates to perimeter FX. Revenue in the media segment totaled 1.9 billion euros in 2025, down 2% like for like. In linear advertising, the structural market decline was exacerbated by an unstable environment throughout the year, in particular in the fourth quarter due to France's political and fiscal situation. However, that decline was partly offset by an increase in the group's market share, showing the commercial relevance of the ad sales house offerings. Despite these headwinds, TF1 Plus continued to demonstrate its appeal for advertisers. For the second consecutive year, its advertising revenue rose by almost 40%, reaching about 200 million euros in 2025. Again, note that we are only talking about ad revenue for TF1 Plus here. When taking advertising revenue from TF1 Info, and addressable TV, along with revenue from subscription, TF1 Plus Premium, and micropayments, our total revenue amounted to 249 million euros in 2025, our total digital revenue. This KPI encompasses the various levers activated by the group to boost our advertising and non-advertising revenue. We will keep disclosing it in our future quarterly publications. Non-advertising media revenue amounted to 347 million euros, down 6%. After rising in the first nine months of the year with good performance by interactivity as well as music and live shows, the decline in revenue at the end of the year resulted mainly from the deconsolidation of Play 2 and My Little Paris. Please note that those activities generate slightly more than 40 million euros in revenue in 2025, which will therefore will not be included in our 2026 revenue. Studio TF1's revenue totaled 376 million euros in 2025, up 9% year-on-year. It included a 44 million euro contribution from JPG, as opposed to 24 million last year. Like for like, revenue rose by 6.5%, notably thanks to the premium deliveries that we mentioned earlier. Now turning to profitability on page 13. TF1 Group's COPPA amounted to 252 million euros in 2035, in line with the company-compiled consensus. The impact of lower advertising revenue compared to last year was mitigated by the strict cost control, and active portfolio management, which allowed the group to preserve resources that are crucial to the second phase of its strategic acceleration. Margin from activities stood at 11%, corresponding to the midpoint of the revised target range provided during our Q3 2025 results. Coming back to our value creation through our active portfolio management, The group materialized 38 million euros of capital gains in 2025 from the disposals of My Little Paris and Play-Doh during the summer, along with the closing of a partnership with Sony Music Publishing regarding music assets in Q4. Excluding items but factoring our digital reinvestments, margin from activities would stand around 9%. The media segment reported COPPA of 212 million euros. This represents a year-on-year decrease of 47 million euros, mainly resulting from the decline in advertising revenue. Studio TF1 generated COPPA of 40 million euros and a margin of 10.7%, broadly stable compared to last year. Regarding the income statement on page 14, I have already commented on consolidated revenue and COPPA. Looking further down, operating profit totaled 233 million euros. That figure includes 10 million in PPA charges related to the JPG acquisition and 9 million euros in non-recurring expenses mainly related to the group's digital acceleration plan. Net profit attributable to the group, excluding exceptional tax surcharge, was 168 million euros, down 38 million euros, mainly reflecting COPPA decrease. Compared with 2024, net profit was also affected by reduced income from the group's cash position due to lower market interest rates and a reduction in the group share of associates, mostly due to the impairment of a small investment at Studio TF1. The impact of the exceptional tax surcharge in 2025 was minus 15 million euros. This mechanism has been maintained in 2026 in France, but the impact for TF1 should be lower in the mid to high single-digit range. Moving on to the net cash position. At end December 2025, the TF1 grew at a solid financial position with net cash of 515 million euros, Our solid balance sheet is an asset to navigate our complex environment and keep rolling out our digital roadmap. The 9 million increase compared with 2024 mainly reflects free cash flow after working cap of 102 million euros, dividends of 127 million euros paid by TF1 in April, and an impact from disposals of around 20 million euros. Looking at free cash flow before working cap, it stood at 85 million euros, which is 144 million euros below 2024 level, mainly explained by the following. A 71 million euro decrease of net cash flow, mainly related to the linear decline and the exceptional tax surcharge in France. A 70 million euros increase of net capex with three drivers. First, A base effect related to the disposal of the Ushuaia brand in 2024 for roughly 30 million, 27 exactly. The delivery schedule, which was expected for co-productions in 2025 at our media segments. And a more sustained level of production activity at Studio TF1. Here, I remind you that production costs are capitalized, so this is future activities. On page 16, let me wrap up the key takeaways of 2025 from a financial standpoint. In a very uncertain and unstable environment, the group successfully tackled advertising market headwinds, thus mitigating the impact on COPPA. First, we managed to gain market shares across the board in a more challenging market than expected, underlying the competitiveness of our ad sales sales, digital grew by 36% significantly ahead of the market, while our linear revenue was down by a high single-digit percentage, still outperforming the linear market estimated to be down by a low double-digit percentage. Second, we kept a tight control on cost, as illustrated by the 19 million decrease in programming costs. And on the other hand, we preserved resources required to fuel the second phase of our strategy. Lastly, We actively manage our portfolio, both on media and on studio, as illustrated by the disposal of My Little Paris, Play 2, and the partnership we signed with Sony Music Publishing regarding music assets and by the successful integration of JPG. Let's now turn to page 70. In line with our distribution policy targeting a growing dividend, the board will propose that the next general meeting, a dividend of 0.63 Euro per share of 5% from 2024 and 40% up from 2021. This dividend offers an attractive yield of 8%. I now leave the floor to Rodolphe to provide an update on our strategy and outlook.