ProSiebenSat.1 cuts guidance after posting Q3 results

ProSiebenSat.1 has decreased its earnings and revenue guidance in response to the anticipated performance of its content production and global sales and its digital units.

The German media giant said in a statement following its third quarter results that it expects its content and sales division to record a double-digit percentage decrease in revenues in Q4 compared to the previous year’s period, due to strong comparable figures and the shift of some productions to next year.

It said that structural challenges to parts of its digital entertainment segment are continuing and that it is also planning to increase programming costs in the broadcasting German-speaking segment in the fourth quarter.

As a result ProSiebenSat.1s said it expects both adjusted EBITDA and adjusted net income to be below their respective previous year’s figure in the fourth quarter. Last year Q4 EBITDA was €392 million and adjusted net income was €226 million.

For the full year, it expects “a more moderate earnings improvement than before” with adjusted EBITDA and adjusted net income to “slightly exceed” the previous year’s level.

Group revenues for the full year are now expected to grow by a “mid-single digit percentage range”, when previously ProSiebenSat.1 expected an increase of “at least at a high-single digit percentage”.

The update came after ProSiebenSat.1 reported Q3 earnings that were in line with expectations, with the firm reporting that it generated 52% of revenues outside the TV advertising business in first nine months of the year.

For the quarter, TV ad revenues in the broadcasting German-speaking segment were below the previous year’s level, but in line with expectations. ProSieben’s distribution business, its multi-channel network Studio71 and its ad-tech unit all made strong contributions to the group’s revenue growth.

Overall Q3 revenue grew 3% year-on-year to €883 million, adjusted EBITDA remained stable at €202 million and adjusted net income recorded a slight increase of 1% to €99 million.

“We have consistently diversified our business over the recent years: With its dynamic growth, our commerce business now contributes significantly to our earnings,” said Thomas Ebeling, CEO of ProSiebenSat.1. “We want to continue this successful strategy and thus base our group structure on three strong pillars.”