How To Understand The Financial Performance Of Prosiebensat.1 In 2014

(1)

Page 1

| February 26, 2015

February 26, 2015

IR Presentation

(2)

Page 2

| February 26, 2015

4

1

FY 2014 – At a Glance

2

FY 2014 – Financial Performance Review

Summary & Outlook

Broadcasting German-speaking

Digital & Adjacent

Content Production & Global Sales

FY 2014 – Operational Performance

3

3.1

3.3

3.2

(3)

Page 3

| February 26, 2015

Thomas Ebeling

Chief Executive Officer

At a Glance

(4)

Page 4

| February 26, 2015

Important financial milestones achieved

✔

Continued revenue growth of core TV advertising business

Dynamic growth in Distribution, Digital & Adjacent and Content

Production & Global Sales

Refinancing successfully completed in April 2014, leading to significant

net interest reduction (EUR 50m to 2018)

Full free float since January 2014, market capitalization of EUR 9.3bn

Record year for P7S1 in terms of revenues, recurring EBITDA and

underlying net income

(5)

Page 5

| February 26, 2015

Major operational highlights in FY 2014

1

2

3

4

FY 2014 – At a Glance

✔

Continued strong TV ad sales and net price development

Secured leading positions in key digital growth markets

Further expanded TV production business in English-speaking markets

TV market leadership expanded despite sport events

(6)

Page 6

| February 26, 2015

Key financials in FY 2014 – another record year

[FY 2014 vs. FY 2013, in EURm]

Revenues

Recurring EBITDA

Underlying net income

Continuing operations. Audited figures.

2,875.6

847.3

418.9

+10.4%

✔

+7.2%

✔

+10.3%

✔

(7)

Page 7

| February 26, 2015

Continued dynamic growth across all three business segments

Continuing operations.

1

2

3

4

Digital & Adjacent

Broadcasting

German-speaking

Content Production

& Global Sales

TV Advertising

+2.6%

Distribution

+23.5%

Digital Entertainment

+28.1%

Digital Commerce

+31.0%

Adjacent

+5.6%

Revenue

growth

vs.

FY 2013

+EUR 65m

+EUR 127m

+EUR 78m

(8)

Page 8

| February 26, 2015

2015 Group revenue growth target exceeded at year-end 2014

Continuing operations .

[in EURm]

1,866

1,924

1,926

1,998

2,063

172

225

335

484

611

14

38

95

124

202

1,000

1,500

2,000

2,500

3,000

2010

2011

2012

2013

2014

Digital & Adjacent

3,000

2,500

2,000

1,500

0

+

E

UR

8

2

4

m

CA

G

R

+

8.8

%

(9)

Page 9

| February 26, 2015

Well on track to hit our 2018 Group revenue growth target

1

2

3

4

Degree of

achievement

46%

107%

52%

300

600

100

1,000

137

276

107

519

0

200

400

600

800

1,000

Digital & Adjacent

Group

CMD 2018 target

Achievement by FY 2014

[Achievement by FY 2014, in EURm]

33%

linear projection of CMD target

(10)

Page 10

| February 26, 2015

Positive macro-economic environment benefits our business

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Germany Switzerland Austria

0.0

2.0

4.0

6.0

8.0

10.0

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Unemployment rate

[in percent]

Source: Bloomberg, Deutsche Bundesbank, State Secretariat for Economic Affairs Switzerland, GfK as of January 31, 2015

GfK Consumer Confidence Index

Germany

GDP Germany

[in EURtn]

6.6%

9.3

20-year low

1,950

2,000

2,050

2,100

2,150

2,200

2,250

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

+1.5%

y-o-y

Pre-crisis level

exceeded

(11)

Page 11

| February 26, 2015

Leader in audiovisual consumption

Maxdome is #1 SVoD player in Germany. MyVideo is #1 premium content video portal and #2 German video portal behind YouTube. Studio71 is #2 MCN Studio in Germany Note: Excluding Premium Pay

1

2

3

4

MCN

Linear TV

Basic Pay TV

#1

portfolio

Pay VoD

#1

Ad VoD

#1

3

#2

channels

(12)

Page 12

| February 26, 2015

Territories with high Pay TV penetration are most vulnerable

to OTT disruption

ØUSD

79

84%

Pay TV

penetration

1

Monthly spend per Pay

TV HH

2

ØEUR

19

17%

45%

17%

On-Demand TV

penetration

3

Multi-screen video

penetration

4

29%

5%

46%

Connected TV

penetration

5

10%

18%

Digital affinity

(e.g., music streaming

6

)

5%

1 US: IHS 2014E; DE: VPRT 2 US,DE: IHS 2014E; ARPU; for Germany digital TV ARPU, excluding mandatory public licensing fee of 18€/month 3 US: GfK Over The Top TV 2014; DE: Digitalisierungsbericht 2014 4 Video consumption via non-TV set at least once per month; US: eMarketer; DE: Digitalisierungsbericht 2014 5 Active connected TV sets; US: eMarketer; DE: Digitalisierungsbericht 2014 6 Music streaming revenue share 2014E; US,DE: PWC Global Entertainment Outlook 2014

(13)

Page 13

| February 26, 2015

German TV ad market with significant growth potential due to

low TV ad spend per capita and still high print ad share

1

2

3

4

USA Advertising data: ZenithOptimedia. Notes: 1) After discounts; 2) Excludes production costs; 3) Excludes agency commission; 4) Classified advertising is included in internet and newspapers; 5) Includes national and local media; 6) Internet includes display, video (rich media), classified, search (paid), internet radio, podcast and other (online video, mobile and widgets/gadgets). Germany Advertising Data: 2003-2013 ZAW, 2014-2017 Agency forecasts. Notes: 1) After discounts; 2) Excludes production costs; 3) Excludes agency commission of 15%;4) Includes classified advertising; 5) Magazines includes directories and trade titles; 6) Newspapers includes dailies, weeklies, Sundays and supplements; 7) Internet includes display, paid search and affiliate deals

Print advertising share

USA vs. Germany in %

0

10

20

30

40

50

60

2008

2009

2010

2011

2012

2013 2014E

USA

Germany

TV advertising spend per

capita (USA vs. Germany in EUR)

-30

60

90

120

150

180

2008

2009

2010

2011

2012

2013 2014E

USA

Germany

Online advertising share

USA vs. Germany in %

0

5

10

15

20

25

30

2008 2009 2010 2011 2012 2013 2014E

USA

Germany

(14)

Page 14

| February 26, 2015

Digital Commerce

Adjacent

A

B

C

Ad VoD

Pay VoD

Games

M4R/E

7Travel

Commerce

Music, Artist Mgmt.,

Live, Licensing

Market leading positions in our seven D&A verticals

Selection

#1

#2

#3

2

#4

#1

#2

#3

Top

5

#1

#2

#1

1

+

1. SVoD German market leader according to GfK Jan-Nov 2014 2. Mobile and PC games publisher In Europe, excluding direct publishing by developers

Revenue split

Growth vs.

FY 2013

36%

52%

12%

+28%

+31%

+6%

(15)

Page 15

| February 26, 2015

Our revenue growth assumptions for 2015

Digital & Adjacent

Content Production

& Global Sales

1

German-speaking

Broadcasting

2

3

Revenues

vs.

FY 2014

low single-

digit growth

double-digit

growth

high single-

digit growth

1

2

3

4

(16)

Page 16

| February 26, 2015

Financial targets for 2015

Financial leverage

Recurring EBITDA

Group revenue growth

mid to high-single digit

above prior year

(17)

Page 17

| February 26, 2015

Axel Salzmann

Chief Financial Officer

Financial Performance

Review

(18)

Page 18

| February 26, 2015

2014 outlook

2014 achievement

and change (y-o-y)

Group revenues

high single-digit growth

EUR 2,875.6m

+10.4%

Recurring EBITDA

above prior year

EUR 847.3m

+7.2%

above prior year

EUR 418.9m

+10.3%

Financial leverage

1.5x – 2.5x

1.8x

✔

We have achieved all of our 2014 financial targets

FY 2014 financial targets and achievement

✔

(19)

Page 19

| February 26, 2015

0

700

1,400

2,100

2,800

FY 2014: double-digit revenue growth and EUR 57m

recurring EBITDA improvement

2,875.6

2,605.3

0

250

500

750

1,000

847.3

790.3

+10.4%

+7.2%

Consolidated revenues

[in EURm]

Recurring EBITDA

[in EURm]

FY 2014

FY 2013

FY 2014

FY 2013

Recurring EBITDA margin:

29.5%

(-0.9%pts)

1 2 3

4

FY 2014 – Financial Performance Review

(20)

Page 20

| February 26, 2015

Key revenue growth drivers of ProSiebenSat.1 in FY 2014

Key Group revenue growth drivers

[FY 2014 external revenues, growth rates in percent]

Digital & Adjacent

TV advertising

EUR 1,909.1m, +2.6%

EUR 220.1m, +28.1%

Red Arrow

EUR 202.2m, +63.4%

Distribution

EUR 92.9m, +23.5%

Digital Commerce

EUR 316.1m, +31.0%

Adjacent

EUR 74.6m, +5.6%

(21)

Page 21

| February 26, 2015

FY 2014: further improvement of underlying net income

and EPS

Continuing operations. Weighted number of shares used for EPS calculation: 213,315,036.

0

100

200

300

400

500

418.9

379.7

0.00

0.50

1.00

1.50

2.00

2.50

1.96

1.78

+10.3%

Underlying EPS

[in EUR]

[in EURm]

FY 2014

FY 2013

FY 2014

FY 2013

+10.1%

(22)

Page 22

| February 26, 2015

Q4

2014

Q4

2013

y-o-y

FY

2014

FY

2013

y-o-y

Comments

Ext. revenues

664.7

648.1

+2.6%

2,062.7

1,997.8

+3.2%

Solid TV advertising revenue

growth supported by sound

macro

and

TV

market

environment; dynamic growth

of distribution business driven

by HD and mobile TV

TV advertising

607.7

598.2

+1.6%

1,909.1

1,861.1

+2.6%

Distribution

26.5

23.3

+13.7%

92.9

75.2

+23.5%

Rec. EBITDA

265.6

258.6

+2.7%

702.8

678.6

+3.6%

Rec.

EBITDA

increase

despite incremental costs for

new

channel

ProSieben

MAXX

Broadcasting German-speaking: solid revenue growth of

TV advertising and distribution business in 2014

External revenues and recurring EBITDA

[in EURm]

(23)

Page 23

| February 26, 2015

Q4

2014

Q4

2013

y-o-y

FY

2014

FY

2013

y-o-y

Comments

Ext. revenues

196.9

150.3

+31.0%

610.7

483.7

+26.3%

Dynamic

organic

and

inorganic revenue growth in

Digital

Entertainment

and

Digital

Commerce;

strong

growth

of

online

video

business and travel cluster

Digital Entert.

66.6

53.0

+25.5%

220.1

171.8

+28.1%

Dig. Commerce

104.5

74.7

+39.9%

316.1

241.3

+31.0%

Adjacent

25.7

22.5

+14.2%

74.6

70.6

+5.6%

Rec. EBITDA

42.4

33.9

+25.3%

129.3

105.4

+22.7%

Maintained

attractive

rec.

EBITDA margin profile despite

continued investments

Digital & Adjacent: dynamic revenue and recurring EBITDA

growth driven by all key assets

External revenues and recurring EBITDA

[in EURm]

(24)

Page 24

| February 26, 2015

Q4

2014

Q4

2013

y-o-y

FY

2014

FY

2013

y-o-y

Comments

Ext. revenues

104.3

42.4 +146.2%

202.2

123.8

+63.4%

Segment revenues benefited

from organic growth of US

and UK production companies

as well as consolidation of

Half Yard; first time revenue

recognition

of

TV

series

„Bosch“ in Q4

Total revenues

121.2

56.2 +115.6%

244.5

167.5

+46.0%

Rec. EBITDA

18.1

10.9

66.1%

19.1

10.6

+80.1%

Improved

segment

margin

due to portfolio synergies and

operating leverage

Content Production & Global Sales: US and UK business

remained main growth driver

External revenues and recurring EBITDA

[in EURm]

(25)

Page 25

| February 26, 2015

FY 2014 Group P&L – improvement of almost all key metrics

Continuing operations. *After non-controlling interests.

[in EURm]

Q4 2014

Q4 2013

Δ

FY 2014

FY 2013

Δ

Revenues

965.9

840.8

+14.9%

2,875.6

2,605.3

+10.4%

Recurring EBITDA

325.1

302.1

+7.6%

847.3

790.3

+7.2%

Non-recurring items

-8.2

-13.4

-38.6%

-28.9

-32.6

+11.2%

EBITDA

316.9

288.7

+9.7%

818.4

757.8

+8.0%

Depreciation and amortization

-35.0

-26.6

-31.8%

-123.8

-88.9

-39.3%

Operating result (EBIT)

281.8

262.1

+7.5%

694.5

668.9

+3.8%

Financial result

-29.1

-32.3

+9.9%

-134.4

-142.0

+5.3%

Thereof interest result

-22.6

-29.9

+24.2%

-97.9

-128.5

+23.8%

Net income*

167.8

155.0

+8.3%

373.5

359.5

+3.9%

180.4

158.9

13.6%

418.9

379.7

+10.3%

(26)

Page 26

| February 26, 2015

Operating free cash flow increase driven by recurring EBITDA

and interest result improvement

Continuing operations. Net M&A cash spend includes majority acquisitions of aeria games, COMVEL, Half Yard, moebel.de as well as minority investments/deferred purchase price payments/equity-related exit proceeds such as for Collective Digital Studios, billiger-mietwagen, mydays, Shopkick, talenthouse, wetter.com and other minority investments/disposals.

Operating free cash flow, FCF

[in EURm]

+6.8%

330.1

276.5

58.3

168.0

27.7

0

100

200

300

400

500

FCF continuing operations

Net M&A cash spend

Cartel fine payment (2013)

444.5

416.1

FY 2014

FY 2013

• Operating FCF increase mainly driven

by

rec. EBITDA

and

net interest

result

improvement

• Increase already reflects

higher cash

tax spend

and

refinancing charges

(hedge unwind)

(27)

Page 27

| February 26, 2015

Net debt

[in EURm]

1,446

1

1,503

56

0

500

1,000

1,500

Our financial leverage remained stable at 1.8x

Financial leverage: Net debt/LTM recurring EBITDA (LTM recurring EBITDA of EUR 847.3m (previous year: EUR 790.3m) for continuing operations) 1) After reclassification of cash and cash equivalents of Eastern European operations.

12/31/2013

Change in

net debt

12/31/2014

Stable financial

leverage at 1.8x as of

December 31, 2014

Net financial debt

1 2 3

4

FY 2014 – Financial Performance Review

In 2014, we have

extended our debt

maturities to April

2019/21

(28)

Page 28

| February 26, 2015

•

Dividend per share:

EUR 1.60

•

Total dividend pay-out

1

:

EUR 342m

•

AGM on May 21, 2015

•

Dividend payment on May 22, 2015

2014 dividend proposal: continued attractive

shareholder return

1) Dividend pay-out calculated on the basis of 213.6m shares (5.2m treasury shares not entitled to a dividend). Note: Proposed 2014 dividend subject to Supervisory Board and AGM resolution

Dividend yield of

4.6%

(based on share price of

EUR 34.83 on December 30, 2014)

(29)

Page 29

| February 26, 2015

Thomas Ebeling

TV Performance

Broadcasting

(30)

Page 30

| February 26, 2015

Germany and Austria with strong viewer share growth

FY 2013

FY 2014

Germany

28.1%

28.7%

Austria

21.2%

21.9%

Switzerland

17.8%

17.3%

Basis for GER: All German TV households (Germany + EU), A 14-49 years; Mon-Sun, 3-3 h. Source: AGF in cooperation with GfK / TV Scope / ProSiebenSat.1 TV Deutschland. Basis for CH: D-CH, A 15-49; Source: Mediapulse TV-Panel. Basis for A: A12-49; Mon-Sun, 3-3h, P7 MAXX Austria and S1 Gold Austria (both from Jul 15, 2014, onwards). Source: AGTT / GfK: Fernsehforschung / Evogenius Reporting.

(31)

Page 31

| February 26, 2015

Stable TV viewing time and reach versus 2013

Basis: All German TV households (Germany + EU),Viewers 3+ years, A 14-49 years and A 14-29 years. Source: AGF in cooperation with GfK / TV Scope / ProSiebenSat.1 TV Deutschland.

1 2 3 4

Broadcasting German-speaking / TV Performance

Viewers 3+ years

Adults 14-49 years

Adults 14-29 years

[in minutes]

Average daily TV viewing time – full day

Average daily TV reach – full day

[in million]

221

182

181

128

124

2013

2014

50

21

6

2013

2014

(32)

Page 32

| February 26, 2015

Linear TV consumption growing by 5% until 2018

Average daily usage in Germany – Ad relevant target group

A 14-49

[in minutes]

CAGR +1%

Linear TV

Online linear

TV streaming

+10min

(+5%)

Basis: All German TV households (Germany + EU), A 14-49 years.

Source: AGF in cooperation with GfK / SevenOne Media Media Usage Survey 2014, comScore Video Metrix, SOM projection.

181

174

5

22

2014

2018

(33)

Page 33

| February 26, 2015

… and remains relatively stable even in younger audiences

1 2 3 4

Average daily usage in Germany – Ad relevant target group

A 14-29

[in minutes]

Linear TV

Online linear

TV streaming

Source: AGF in cooperation with GfK / SevenOne Media Media Usage Survey 2014, comScore Video Metrix, SOM projection.

Relatively

stable

compared to

other markets

CAGR -2%

124

103

8

20

2014

2018

132

123

(34)

Page 34

| February 26, 2015

Live viewing to the TV set

Time-shifted viewing within three days

Time-shifted viewing within seven days

Live streaming to the TV set

Live streaming on a digital or mobile device

Catch-up VOD to the TV set

(within seven days)

Catch-up VOD on a digital or mobile device

(within seven days)

Current panel measurement not adequate, especially for

younger viewers

Measurement body

Nielsen (US)

BARB (UK)

AGF (GER)

Source: Redburn analysis, Pro7Sat.1 and ITV – Screen Test.

✔

✘

✔

✘

(35)

Page 35

| February 26, 2015

Increased coverage of actual TV viewing

Planned TV-panel adaptions in Germany to add significant

measured reach in the next two years

All usage situations in households:

TV panel extension with target groups

Source: SevenOne Media

Live Streaming on all screens:

Inclusion of German-speaking non EU

foreigners

(e.g. Turkish population)

Complete coverage of 2nd, 3rd, … TV sets

Upgrade of single household measurement

In web browser

In mobile and smart TV apps

(e.g., 7TV, MagineTV, Zattoo)

2015

2016

2015

2016

1 2 3 4

(36)

Page 36

| February 26, 2015

Growing and outperforming key competitor in Germany

Basis: All German TV households (Germany + EU), A 14-49; Mon-Sun, full day 3-3 h; RTL Mediengruppe w/o RTL II. Source: AGF in cooperation with GfK / TV Scope / ProSiebenSat.1 TV Deutschland.

Audience shares

[Full day; in percent]

FY 2013

+0.6%pts

28.1

28.7

FY 2014

FY 2013

FY 2014

-1.4%pts

26.1

24.7

∆FY 2013

∆FY 2014

+2.0

+4.0

vs.

+2.0

%pts

(37)

Page 37

| February 26, 2015

ProSiebenSat.1 increased ratings over the year with a strong

rebound after sport events

Basis: All German TV households (Germany + EU), A 14-49 years; Mon-Sun, 3-3 h; RTL Mediengruppe w/o RTL II. Source: AGF in cooperation with GfK / TV Scope / ProSiebenSat.1 TV Deutschland.

26.4

27.5

29.3

28.4

23.6

Q1 2014

Q2 2014

Q3 2014

Q4 2014

22

23

24

25

26

27

28

29

30

29.8

Audience shares – Full day

[in percent]

Δ

4.9

%pts

24.9

1 2 3 4

Strong rebound

FIFA

(38)

Page 38

| February 26, 2015

ProSiebenSat.1 steadily improved vs. RTL Group

Basis: All German TV households (Germany + EU), A 14-49 years; Mon-Sun, 3-3h; RTL Mediengruppe w/o RTL II, P7S1 w/o N24, sixx from Feb 1, 2011 onward, SAT.1 Gold from Jan 17, 2013 onward, ProSieben MAXX from Sep 3, 2013 onward. Source: AGF in cooperation with GfK / TV Scope / ProSiebenSat.1 TV Deutschland.

Audience shares – Full day

[in percent]

28.5

28.9

27.8

28.1

29.0

29.4

27.3

26.1

2010

2011

2012

2013

2014

22

23

24

25

26

27

28

29

30

31

28.7

Δ

4.0%pts

24.7

(39)

Page 39

| February 26, 2015

ProSiebenSat.1 with talk of town US formats

US Sitcoms

19.2%

Up to

16.4%

Up to

THE BIG BANG THEORY

HOW I MET YOUR MOTHER

US Crime Series

16.3%

Up to

16.1%

Up to

CRIMINAL MINDS

NAVY CIS

Blockbusters

MEN IN BLACK 3

DIE TRIBUTE VON PANEM

New Talk of Town Series 2015

THE FLASH

GOTHAM

28.9%

23.1%

20.3%

Up to

20.3%

Up to

1 2 3 4

Basis: All German TV households (Germany + EU), A 14-49 years, prime time 20-23h. Source: AGF in cooperation with GfK / TV Scope / ProSiebenSat.1 TV Deutschland.

(40)

Page 40

| February 26, 2015

Attractive US studio rights secured for multiple years

US FTA content attractive

in Germany

German viewer behavior

supports FTA offerings:

•

Less people watch movies in

theatres than in the US

•

Less people subscribe to pay

offerings than in the US

•

Germans prefer dubbed versions

Supply secured with major studios

Holdbacks secure

FTA exclusivity vs.

(41)

Page 41

| February 26, 2015

Successful commissioned prime time formats and events

“Promi Big Brother”

22.7%

Up to

“The Voice Kids”

“Die Hebamme”

23.0%

“Hochzeit auf den

ersten Blick”

“Germany’s Next

Topmodel”

Joko & Klaas shows

“The Voice of Germany”

Raab events

19.0%

Up to

1 2 3 4

Ø13.4%

17.7%

Up to

Source: AGF in cooperation with GfK / TV Scope / ProSiebenSat.1 TV Deutschland.

22.8%

Up to

25.8%

Up to

17.4%

Up to

(42)

Page 42

| February 26, 2015

Continued strong growth of small channels

Audience shares

[in percent; Adults 14-49 years]

Basis: All German TV households (Germany + EU), Mon-Sun, 3-3h; sixx from Feb 1, 2011 onwards, SAT.1 Gold from Jan 17, 2013 onward, ProSieben MAXX from Sep 3, 2013 onward. Source: AGF in cooperation with GfK / TV Scope / ProSiebenSat.1 TV Deutschland.

Best rating with

single format

Best daily

performance

Best monthly

audience share

10.0%

1.5%

1.2%

(43)

Page 43

| February 26, 2015

Broadcasting German-speaking goals for 2015

3

1

Increase audience share

2

Build share in female target groups

Leverage digital to drive viewer loyalty

(44)

Page 44

| February 26, 2015

Thomas Ebeling

Ad Market Performance

(45)

Page 45

| February 26, 2015

Very positive TV ad market trends in 2014

✔

Strongest net TV ad market growth

since 2011

TV continued to

increase share in media mix

Continued

positive net pricing

development

New channels stimulated

new business revenues

1 2 3 4

Broadcasting German-speaking / Ad Market Performance

(46)

Page 46

| February 26, 2015

Strongest net TV ad market growth since 2011

German net TV ad market growth

[in percent

]

2011

0.7%

2012

1.4%

2013

2.2%

Source: ZAW (2010, 2011, 2012, 2013), P7S1 estimate (2014).

Q1

Q2

Q3

Q4

2014E

~3%

2014 by Quarter

[in percent]

(47)

Page 47

| February 26, 2015

Continued leading ad share position in Germany

Switzerland

Austria

Germany

FY 2013

FY 2014

26.9%

43.6%

34.5%

25.7%

44.0%

35.4%

P7S1 gross TV advertising market share

[in percent]

Source: Nielsen Media Research (Germany), Media Focus (Austria, Switzerland)

1 2 3 4

(48)

Page 48

| February 26, 2015

ProSiebenSat.1 outperformed key competitor

Source: P7S1 estimate; IP excl. RTL2

Public broadcasters benefited from

two major sports

events. Trend might reverse

in non-sports year 2015

Public

broadcasters

~11%

[2014; in percent]

TV market

(49)

Page 49

| February 26, 2015

TV continues to benefit at the expense of other media

Gross ad spendings, Germany

[in percent and %pts; FY 2014 vs. FY 2013]

Source: Nielsen Media Research. Online exclusive search, affiliate and others not reporting their bookings to Nielsen (e.g. Youtube, Facebook).

1 2 3 4

Outdoor, Cinema

Magazines

Newspaper

Radio

TV

Total

Online

-0.7%pts

-0.1%pts

+1.5%pts

n/a

100.0%

46.2%

11.5%

5.8%

16.8%

13.9%

6.0%

Share of segment

Change in media mix

+0.1%pts

(50)

Page 50

| February 26, 2015

7 out of 10 biggest industries increased TV ad spend

1.648

1.584

1.566

1.225

954

860

701

691

598

433

13.068

12.6%

12.1%

12.0%

9.4%

7.3%

6.6%

5.4%

5.3%

4.6%

3.3%

+1.0%

+30.3%

+4.9%

+25.8%

+13.3%

+7.4%

-5.0%

+7.5%

-5.9%

-0.2%

-1.0%pts

+5.9%pts

+2.1%pts

+6.8%pts

+2.4%pts

-0.7%pts

-6.4%pts

-0.7%pts

-2.5%pts

+0.3%pts

100.0%

+8.0%

+1.5%pts

Detergents

Finance

Pharmacy

Motor Vehicles

Trade & Shipment

Business Services

Total

Beverages

Telecommunication

Cosmetics & Toiletries

Food

Gross TV ad spendings of top 10 TV industries, Germany

[in EURm, percent and %pts; FY 2014 vs. FY 2013]

in EURm

Share

Δ

Δ TV in media mix

964

17

368

73

251

112

59

-37

48

-37

-1

(51)

Page 51

| February 26, 2015

Online businesses further shift ad spendings to TV

69%

2012

2011

65%

61%

75%

2013

+6%pts

+4%pts

2014

TV share in media mix, eCommerce & online services

[in percent]

Basis: Product groups „eCommerce“ & „Online Services“. Source: Nielsen Media Research, Jan-Dec 2014

1 2 3 4

(52)

Page 52

| February 26, 2015

Price increases for all main TV channels

CPT = Cost Per Thousand. Adults 14-49, Mon-Sun, full day 3-3 h.

Base: all TV households in Germany (D+EU) / Source: AGF in cooperation with GfK / TV Scope / SevenOne Media / Pricing & Media Strategy.

6.4

7.6

11.3

7.6

11.2

Gross CPT growth FY 2014

[in percent vs. FY 2013]

(53)

Page 53

| February 26, 2015

Significant net CPT increases since 2009

1 2 3 4

Net CPT development

[Index: 2007=100]

80

90

100

110

120

2007

2008

2009

2010

2011

2012

2013

2014

Market

Basis: All TV-HH (D+EU), TA 1-30; SevenOne Media: SAT.1, ProSieben, kabel eins; IP: RTL, VOX. Source: AGF/GfK, TV Scope, SevenOne Media, Pricing & Media Strategy, own calculations.

(54)

Page 54

| February 26, 2015

Approved by Federal Administrative Court

First bookings received

Regional TV advertising currently being implemented

Presumable upside potential of ~EUR 50m

for market until 2018

(55)

Page 55

| February 26, 2015

ProSiebenSat.1 is able to attract new TV ad clients every year

2013

Net ad revenues new TV ad clients in Germany,

SevenOne Media

[# of new TV ad clients]

1 2 3 4

2012

2014

# 55

* Ø FY 2012-2014

# 105

# 102

New TV ad

clients

Ø

15%

of customer

base*

(56)

Page 56

| February 26, 2015

We forecast continued single-digit net TV ad market growth

in line with market research firms

+2-3%

German net TV ad market estimates 2015

+1.9%

+2.8%

Source: ZenithOptimedia Advertising Expenditure Forecasts December 2014, Warc Consensus Ad Forecast December 2014, ProSiebenSat,1 estimate

(57)

Page 57

| February 26, 2015

Sales outlook 2015

3

1

2

4

German net

TV advertising market growth of +2-3%

P7S1 to grow

at least in line

with

market

Net CPTs

to further increase due to increased value of reach

New business to benefit from first

regional customers

(58)

Page 58

| February 26, 2015

Conrad Albert

Chief Legal, Distribution &

Regulatory Affairs Officer

Distribution

(59)

Page 59

| February 26, 2015

Continued dynamic growth of distribution

✔

Successful launch of TV live streams on four mobile platforms

✔

Revenue growth continued with +24%

Unitymedia KabelBW – long-term partnership extended,

break-through deal with maxdome

✔

All P7S1 digital assets on key digital devices

✔

(60)

Page 60

| February 26, 2015

Double-digit increase in revenues and HD subscribers

Note: HD free subscribers displayed; Paying subscriber figures as reported by platform partners (EoP; subject to subsequent adjustments by the partners) [FY 2014 vs. FY 2013]

EUR

+17.7m

P7S1 distribution

revenue growth

+24%

+1.1m

P7S1 HD

subscriber growth

+25%

(61)

Page 61

| February 26, 2015

HD growth on track to hit CMD targets 2018

HD subscriber development

[in m]

Note: HD free subscribers displayed; Paying subscriber figures as reported by platform partners (EoP; subject to subsequent adjustments by the partners) 1) Capital Markets Day Target 2013 (9.2m HD subscribers)

1)

CAGR

+15%

1 2 3 4

Broadcasting German-speaking / Distribution

Platforms will grow HD through

hard bundling

and

upselling

Politically driven

analog melt down

–

~1m potential HD households

Continued technical evolution

(HD/UHD screens) will push

HD take rate

Conversion of HD free users

into

paying subscribers (especially on

satellite)

2.8

4.2

5.3

9.2

(62)

Page 62

| February 26, 2015

Break-through maxdome-Unitymedia KabelBW partnership

Note: 2014 deal includes all P7S1 broadcasting assets (Free-to-Air, Pay TV, mobile streaming and VoD)

First SVoD hard bundling deal with maxdome as

fixed component of Unitymedia KabelBW's tariffs

Significant subscriber potential with up to 7.1m

addressable households long-term according to

Unitymedia KabelBW

Available for Horizon, Horizon Go and all

connected households

(63)

Page 63

| February 26, 2015

New platforms

Partner apps

Mobile distribution fostered by own app and partnerships

&

(Launch partner)

1 2 3 4

P7S1 app

1) 2.3m DTAG-Entertain customers and 2.3 digital cable (Unitymedia KabelBW) customers with access to horizon go (reported Q3 figures); 2) Based on AGOF figures; considering all free and subscribing mobile TV users

Launch of

first multichannel

broadcaster app

Mobile distribution

through networks

of key partners

Partnering with

new emerging

digital TV platforms

(64)

Page 64

| February 26, 2015

P7S1 digital assets with leading coverage on key devices

>95% of devices

(~60m devices)

>90% of devices

(~12m devices)

>35% of devices

(~13m devices)

Launch partner

1) 1)

1)

Note: Availability on devices shown for Maxdome coverage; 1) Deezer – P7S1 minority participation, structured as warrant; 2) First page placement on Smart TVs of Samsung, LG, Sony, Philips, Panasonic sold in 2014; 3) 7TV App available from Android: 4.0, iOS: 7.0, WP 8.0

3)

Smart TVs

Mobile devices

Game consoles

Streaming devices

A

v

ail

abil

it

y

on

dev

ice

s

A

ss

et

s

(65)

Page 65

| February 26, 2015

Past

What’s next for Distribution

1 2 3 4

From cost to

profit center

Present

Future

Bundles and joint

growth with platforms

•

Continuous win-win partnerships

with platforms

•

Attractive digital offerings

•

Digital distribution on all devices

•

New revenue streams

(66)

Page 66

| February 26, 2015

Outlook Distribution

1

On track to meet 2018 revenue target of EUR 155m

2

Further expand digital assets on all devices

3

Sustainable long-term HD subscriber growth rate of 15%

(67)

Page 67

| February 26, 2015

Digital & Adjacent

Dr. Christian Wegner

(68)

Page 68

| February 26, 2015

Ext. Revenues

Rec. EBITDA

Rec. EBITDA margin

1

Dynamic double digit growth in revenues and rec. EBITDA

+26%

+23%

[in EURm]

[in %]

-0.6pts

611

484

0

100

200

300

400

500

600

700

2014

2013

129

105

0

50

100

150

2014

2013

0

10

20

30

2014

21.8

21.2

2013

(69)

Page 69

| February 26, 2015

All D&A units contributed to our strong growth …

1 2 3 4

Digital & Adjacent

Note: Some restating of revenues between digital entertainment and digital commerce unit took place in FY 2014

Revenues

[FY 2014]

Revenue growth

[FY 2014 vs.

FY 2013]

Digital

Entertainment

EUR

220m

+28%

Adjacent

EUR

75m

+6%

Digital Commerce

EUR

316m

+31%

(70)

Page 70

| February 26, 2015

Digital Commerce

Adjacent

A

B

C

Ad VoD

Pay VoD

Games

M4R/E

7Travel

Commerce

Music, Artist Mgmt.,

Live, Licensing

… with market leading positions in our seven D&A verticals

Selection

#1

#2

#3

2

#4

#1

#2

#3

Top

5

#1

#2

#1

1

+

1. SVoD German market leader according to GfK Jan-Nov 2014 2. Mobile and PC games publisher In Europe, excluding direct publishing by developers

Revenue split

Growth vs.

FY 2013

36%

52%

12%

+28%

+31%

+6%

(71)

Page 71

| February 26, 2015

Market

SevenOne Media outperformed video advertising market

1 2 3 4

Digital & Adjacent / Digital Entertainment

German InStream video advertising revenue growth

1

[in %, gross, FY 2014]

20%

23%

49%

market

share

1. Market by Nielsen Media Research, gross, w/o YT, FY 2014 2. Video views: Webtrekk, Google Analytics, YouTube and own tracking tools; incl. Studio71, own and operated, mandates, excl. UGC; incl. mobile browser and apps

(72)

Page 72

| February 26, 2015

setup

studio facilities

in

Berlin, Munich and

Cologne

Studio71 is the #2 Multi Channel Network in Germany

Dec 2014

Dec 2013

>250m

>40m

launched incl. international

success format

“The Mansion”

#2 MCN in video views

A

>6x

>200

channels

1. With 3.5m subscribers

signed including

#1

German webstar

Gronkh

1

>100

webstars

3

German

cities

(73)

Page 73

| February 26, 2015

International CDS partnership strengthened our MCN

1. P7S1 holds strategic minority stake in CDS

Channels

Monthly

video views

Subscribers

&

250m

200

19m

>1.4bn

>1,100

>210m

Partnership advantage

•

Joint content

development

& promotion

•

Launch 1st localized US

import format

A

1 2 3 4

(74)

Page 74

| February 26, 2015

Low adopting, fragmented market with notable growth potential

A

German penetration

comparably low …

43

1

3

2

34

1

2014 SVoD household penetration

[in %]

… with several players

3

in the

market …

… however, with notable

growth potential

10

2

2018

2014

3

2

CAGR

+33%

1. SVoD penetration of TV households; GfK UK 2. Germany from Goldmedia Research 3. Includes SVoD and TVoD/EST

SVoD household penetration

(75)

Page 75

| February 26, 2015

All figures: FY 2014 vs. FY 2013

maxdome shows strong YoY performance …

+92%

1 2 3 4

+71%

+154%

SVoD

subscriber

Total

user base

Total

video views

A

(76)

Page 76

| February 26, 2015

… even after entry of Netflix in Germany

1. Market position provided by GfK from Jan-Dec 2014

A

Q4 2013

without Netflix

+31%

maxdome SVoD net subscriber additions

maxdome

#1

German SVoD

player

1

Q4 2014

with Netflix

(77)

Page 77

| February 26, 2015

maxdome has a strong competitive profile

1 2 3 4

A

1. maxdome pricing is EUR 7.99 SVoD price for all devices incl. HD, while Netflix is EUR 7.99 – 11.99 based on video quality & devices

maxdome vs. Netflix profile

maxdome advantage

At par

Netflix advantage

•

Self produced

series

•

Sophisticated

recommendation

engine

•

Distribution

footprint

(Unitymedia deal)

•

Pricing

1

•

Exclusive

previews

of US series

•

Deep

movie

catalogue

•

Brand

awareness

•

US binge series

offering

•

Advertising

spend

(78)

Page 78

| February 26, 2015

We successfully started to originate deals from the US …

1. Exit proceeds in Q3 2014, but continuing partnership

B

Market leader in fashion

subscription retailing

Market leader in

wearables

Leading customer

rewards

application

Exited in

Q3 2014

1

(79)

Page 79

| February 26, 2015

… and build a launch platform to further grow internationally

1 2 3 4

Digital & Adjacent / Digital Commerce

B

•

Built-up a

leading media

network

in Europe with

>200m reach

•

Created opportunity to

collaborate on

local and

international ventures

(80)

Page 80

| February 26, 2015

We completed 6 successful exits in 2014

1. Zalando IPO on October 1, 2014 2. Sold/exited to another SevenVentures portfolio company

Q1 2014

Q2 2014

Q3 2014

Q4 2014

1

B

2

#1

media

investor

approx. EUR 20m cash proceeds in 2014

(81)

Page 81

| February 26, 2015

Our leading Travel vertical with strong performance

Market position

#1

#3

#1

Top5

1 2 3 4

Digital & Adjacent / Digital Commerce

1. FY 2014 2. From FY 2013 to FY 2014, includes inorganic growth 3. Comparing organic growth of our assets to the relevant travel markets, weighted average, PS71 estimates

B

>EUR150m

Revenues

1

>50%

Revenue growth

2

Outperforming market

3

>20%pts

(82)

Page 82

| February 26, 2015

http://www.sixx.de/tv/flaconi-lifestyle-club-beauty-shop/video/13-flaconi-lifestyle-club-top-3-folge-3-clip

Beauty & Accessories will be our next strong vertical

1. FY 2013 vs. FY 2014

B

#2

in online

beauty

& care

47%

23%

#1

in

sexual wellness

mainstream market

21%

#1

in online retailer for

correction eyeglasses

51%

Top 5

in online

jewelry

retail

>60%

Y-o-Y revenue

growth

1

(not

consolidated)

(83)

Page 83

| February 26, 2015

Starwatch market position expanded with new initiatives

1 2 3 4

Digital & Adjacent / Adjacent

1. Based on Music Longplay Charts of 2014 (label and coop releases) compiled by Media Control

C

New growth initiatives

56%

participation

in top 100

charts

1

Starwatch with successful label

releases and cooperations

(84)

Page 84

| February 26, 2015

CMD revenue growth target: EUR 324m gap to go!

Upside:

•

Faster market

growth

•

Faster

international

ramp-up

•

Larger M&A

deals/PE

partnerships

On track to reach our CMD target for 2018

935

611

335

2018E

2014

2012

D&A revenues

[in EURm]

CAGR

+35%

CAGR

+11%

D&A Revenues

CMD targets

(85)

Page 85

| February 26, 2015

Content Production &

Global Sales

Thomas Ebeling

(86)

Page 86

| February 26, 2015

FremantleMedia International

ITV Global Entertainment

Endemol Worldwide Distribution

BBC Worldwide

Red Arrow International

Zodiak Rights

Shine International

All3Media International

Rank Independent TV production group

1

TV distribution company

FremantleMedia

1

Endemol Shine Group

2

FremantleMedia

3

All3Media

4

Zodiak

5

Banijay

6

Eyeworks

7

Red Arrow Entertainment Group

8

Tinopolis

1

2

3

4

5

6

7

8

Rank

Based on est. revenues. Endemol Worldwide Distribution and Shine International operate as one business as of Jan. 2015. Source: RAEG analysis and company information.

1 _{Defined as working independently from a studio}

(87)

Page 87

| February 26, 2015

Broad presence in key markets, with 55% of revenues

originating in the US

1 2 3 4

Content Production & Global Sales

China

UAE

IL

SE/DK/NO

1 1

D/AU

UK

1 1

18%

3

%

19%

USA

55%

4%

1 Commercial Partner; Note: Excl. discontinued operations in BLX % FY2014 Revenues Content Production & Global Sales

(88)

Page 88

| February 26, 2015

Continuous improvement in key KPIs

Note: Pitch-ready titles, Shows in the catalogue and Territories sold to are cumulative 2010 to Q4 2014. Territories include sovereign countries and administrative territories.

550

vs. 500 in 2013

710

vs. 610 in 2013

36%

vs. 28% in 2013

200+

vs. 180 in 2013

Pitch-ready

titles

Shows in the

catalogue

Returning

shows

Territories

sold to

(89)

Page 89

| February 26, 2015

Most successful Red Arrow global launch so far

1 2 3 4

Key markets

USA and Germany

commissioned for a

second season

Sold in

20+ territories

(incl. UK, USA, Germany,

Australia, Scandinavia, Russia, CEE)

(90)

Page 90

| February 26, 2015

Bosch became Amazon Studios‘ first original drama series

Based on bestselling books by

Michael Connelly

Starring

Titus Welliver

(“Argo”, “The Good Wife”)

Showrunner

Eric Overmyer (“The Wire”)

Premiers

February

13

(91)

Page 91

| February 26, 2015

100 Code is Sky Deutschland‘s first co-production

1 2 3 4

English-language

Scandinavian crime drama

Directed by

Academy Award winner Bobby

Moresco

(“Crash”, “Million Dollar Baby”)

Starring

Michael Nyqvist

( “Mission Impossible”) and

Dominic Monaghan

( “The Lord of the Rings”)

Premiers

(92)

Page 92

| February 26, 2015

Premiers

April 5

Created by

Peter Horton

("Grey's Anatomy")

Produced by

Fabrik Entertainment

Starring Anna Friel

("Pushing Daisies")

(93)

Page 93

| February 26, 2015

Multiple new series commissions in English-speaking markets

for 2015

1 2 3 4

(94)

Page 94

| February 26, 2015

Thomas Ebeling

(95)

Page 95

| February 26, 2015

Key priorities 2015

Secure leading positions in all

attractive digital ent. markets

Further expand presence

in Anglo-Saxon and attractive

emerging markets

Continue to drive new business

with leading digital players

Further strengthen channel portfolio

Gain ad revenues from print

Continue to drive distribution

and panel coverage

Build new verticals

in Digital Commerce

Drive internationalization

of our digital business

Broadcasting

German-speaking

Digital & Adjacent

Content Production &

Global Sales

(96)

Page 96

| February 26, 2015

Good start into 2015

TV ad business growing at least in line with market

Dynamic development of Digital & Adjacent to continue

✔

Full year Group audience shares expected to grow

(97)

Page 97

| February 26, 2015

Financial targets for 2015

1 2 3 4

Summary & Outlook

Continuing operations

Financial leverage

Underlying net income

Recurring EBITDA

Group revenue growth

mid to high-single digit

above prior year

(98)

Page 98

| February 26, 2015

This presentation contains "forward-looking statements" regarding ProSiebenSat.1 Media AG ("ProSiebenSat.1")

or ProSiebenSat.1 Group, including opinions, estimates and projections regarding ProSiebenSat.1's or

ProSiebenSat.1 Group's financial position, business strategy, plans and objectives of management and future

operations. Such forward-looking statements involve known and unknown risks, uncertainties and other important

factors that could cause the actual results, performance or achievements of ProSiebenSat.1 or ProSiebenSat.1

Group to be materially different from future results, performance or achievements expressed or implied by such

forward-looking statements. These forward-looking statements speak only as of the date of this presentation and

are based on numerous assumptions which may or may not prove to be correct.

No representation or warranty, expressed or implied, is made by ProSiebenSat.1 with respect to the fairness,

completeness, correctness, reasonableness or accuracy of any information and opinions contained herein. The

information in this presentation is subject to change without notice, it may be incomplete or condensed, and it

may not contain all material information concerning ProSiebenSat.1 or ProSiebenSat.1 Group. ProSiebenSat.1

undertakes no obligation to publicly update or revise any forward-looking statements or other information stated

herein, whether as a result of new information, future events or otherwise.

(99)

Page 99

| February 26, 2015