Germany’s ProSiebenSat.1 reduces revenue forecast as consumer spending slows down

German broadcaster and media group ProSiebenSat.1 Group is lowering its revenue forecast for the year ahead in view of the burdens on consumer spending.

Rainer Beaujean

The group now expects revenues for the full year, excluding further portfolio changes, to stagnate at €4.377bn (US$4.4bn) and operating profit (Ebitda) adjusted for special items to decline to €805m.

This takes into account the sale of the US production business of Red Arrow Studios in July, the MDax-listed company announced Thursday in Unterföhring, near Munich.

Previously, ProSiebenSat.1 had targeted €4.6bn in revenues and €840m in operating profit, excluding portfolio changes. But advertising revenues fell 1% year-on-year in the second quarter. For the full-year forecast, the group assumes that its ad revenues will match the previous year’s level. However, forecasts are currently subject to a high degree of uncertainty.

In Q2, revenues grew by 1% to €1.06bn. The entertainment segment contributed three-quarters of this. Sales in the dating business fell by 6% to €130m, while commerce and ventures grew slightly to €177m. The group’s adjusted operating profit remained stable at €166m.

Industry analysts at several banks had already lowered their ratings for ProSiebenSat.1 in recent days and weeks, because advertising-dependent media companies were suffering from inflation, deteriorating consumer sentiment and lower consumer spending.

Given fears of a recession in Europe, they are skeptical about advertising spending in Q4, the most important quarter of the year for European TV broadcasters.

In any case, Rainer Beaujean, CEO of ProSiebenSat.1 Media, considers the results a success. “Our revenue performance in the second quarter proves once again that our diversified positioning makes us more crisis-proof than many other media companies. Despite difficult economic conditions, we were able to continue our growth as a group. This was driven not only by our entertainment segment, but also by our commerce and ventures business,” he said.