“Challenging Environment”
RTL streaming is growing strongly
8/8/2023 8:36 am
In view of the meager advertising business, especially in Germany, RTL will earn less this year than hoped. CEO Rabe relies on investments – also to strengthen the competitive position.
Because of the weak TV advertising markets due to the sluggish economy, the European media group RTL is lowering its targets for 2023. Revenue fell in the first half of the year by 5.1 percent to 3.1 billion euros, as the Bertelsmann subsidiary announced. Adjusted earnings before interest, taxes, depreciation and amortization (EBITA) halved to EUR 250 million, net profit fell by around 57 percent to EUR 132 million.
The sum of paying subscribers to the streaming services RTL+ in Germany and Hungary and Videoland in the Netherlands rose by 34.1 percent to six million. Mainly because of investments in the streaming business, RTL accepts less profit. This is now lower than expected due to the weak start to the year.
Against this background, the group is targeting sales of around 7 billion euros for 2023, after previously forecasting 7.3 to 7.4 billion euros. Profit (EBITA) is likely to fall again and, at around EUR 950 million, be lower than previously expected at EUR 1.0 to 1.05 billion.
Inflation has an impact
For the second half of the year, RTL expects stable to slightly growing TV advertising revenues. These revenues fell in the first six months by 12.5 percent to 1.2 billion euros, especially in Germany. At the end of 2022 and beginning of 2023, the German economy shrank and only stagnated in the spring. The weak economy together with the energy crisis and high inflation means that advertisers are holding back.
The market environment in the first half of the year was particularly challenging, said RTL boss Thomas Rabe. “We believe that by investing throughout the business cycle we will have further strengthened our competitive positions as advertising markets recover.”
Note: ntv is part of RTL Germany