Drop in advertising and group EBITA
TV advertising revenue decreased by 11.5% organically in Q1 20 and TV advertising time dropped by more than 30% in the second half of March 2020 due to ad cancellations. The lockdown led to a surge in average individual TV viewing time by above 20% in March 2020, to unpredecented levels. The problem is that it could not be monetised. Group EBITA collapsed (-29%). Cost cutting has been implemented to absorb half of the fall in revenue in Q2 20.
29 Apr 20
M6: Severe covid-19 impact leads to massive savings plan | NEUTRAL | EUR12.5 (+25%)
M6 - NEUTRAL | EUR12.5 (+25%) Severe covid-19 impact leads to massive savings plan Hit by covid-19 all across the board, Q1 falls behind expectations Advertising trend expected to worsen Massive cost cutting plan to offset covid impact
29 Apr 20
Media: Free to air media: keep your seatbelt fastened
Media Free to air media: keep your seatbelt fastened Impact on advertising should be massive, spreading over 2020 All businesses will be hit, compensation levers are limited We recommend great prudence on the sector Revisions
Metropole Television Television Francaise 1
14 Apr 20
Resilient TV advertising, good development outside TV
In 2019, TV advertising revenue was resilient. In the French TV advertising market which declined, M6 had stable organic TV advertising revenue despite a tough Q4 19 (-3.4% organically) affected by lower demand from advertisers due to the social unrest in France. The TV EBITA margin was stable (22% of revenue). In Radio and Production & Audiovisual rights, the contribution to group EBITA increased thanks to additional synergies in radio and a good year for the distribution of films.
14 Feb 20
Limited erosion of TV advertising
M6 succeeded to limit the erosion of TV advertising. Advertising revenue from the free-to-air channels declined slightly by -0.3% organically (vs +0.7% in H1 19), reflecting a decrease in July and August 2019 that was almost offset by a rebound in September 2019. Regarding the operating performance, the EBITA margin improved to 11.6% of revenue (+0.5pt) thanks to the Television and Radio activities and despite the termination of the M6 mobile by Orange contract at the end of H1 19.
30 Oct 19
Growth in advertising revenue
In H1 19, the good advertising revenue growth (+2.3%) reflected a very slight increase in advertising revenue from the free-to-air channels (+0.7%) and stronger advertising revenue from cab-sat channels, radio and internet (+8.6%). The EBITA margin declined slightly (-0.2pt to 20.7% of revenue) due to the investments in data and the technology in the 6play platform and an increase in the cost of programmes (+1.3%).
01 Aug 19
M6: M6 Group beats expectations thanks to non-core activities | NEUTRAL | EUR20
M6 - NEUTRAL | EUR20 M6 Group beats expectations thanks to non-core activities M6 Group manages to beat expectations again this quarter Investments to sustain TV performance weighing on margins Results from other activities help offset TV’s disappointment
31 Jul 19
Advertising revenue growth supported by strong audience shares
Q1 19 was satisfactory for advertising revenue. Group advertising revenue increased by +2.9%, o/w +2% for advertising revenue from the free-to-air channels. This was supported by a stable average audience share of the FTA channels at a high level (21.5%) on the WRP<50 segment. The EBITA margin improved (+0.7pt to 18.6% of revenue) thanks to additional synergies from the integration of the Radio business.
25 Apr 19
Strong audience share, resilient TV advertising revenue.
The audience shares remained solid in TV and radio in 2018. TV advertising revenue increased very slightly (+0.5%) in a difficult environment for TV advertising and Group RTL gained market share in advertising thanks to higher audience share. The EBITA margin improved moderately in the TV division (+0.2pt to 22.1% of revenue) while the Radio division brought in €28m (16.8% of revenue) on twelve months. M6 turned to a net cash position following the disposal of monAlbumPhoto and FCGB.
21 Feb 19
Mitigated FTA channel advertising
Although advertising in the free-to-air (FTA) channel M6 increased in Q3 18 (+0.4% vs +0.9% in H1 18) in a context marked by the Football World Cup in July 2018, it was a mixed performance compared to those of the competitor TF1. Regarding the diversification activities, the announcement of the disposal of the Football Club des Girondins de Bordeaux at a very high price (€100m) is very good news which will also remove huge off-balance sheet commitments (€122m).
07 Nov 18
Resilient in a tough environment
M6 released a good set of figures in H1 18 considering the poor advertising market and the Football World Cup which benefited its competitor TF1. The operating losses of the Football Club Girondins de Bordeaux in the Diversification segment were significant. The perspective of a divestment of FCGB, currently under negotiation, is good news.
30 Jul 18
LIBERUM: M6 - Q2 beats on the EBITA and likely sale of the football club
While TV advertising revenues of the Free-to-air channels came in slightly below expectations, EBITA beat consensus estimates by c.10%, which we believe is mainly due to the high-margin distribution contracts signed at the start of the year. A positive catalyst for the shares should be the comments around the loss-making Girondins de Bordeaux, that the group is likely to sell in the very short-term. Also the tone with regards to the audiovisual reform and the likely benefits for M6 was positive.
25 Jul 18
LIBERUM: Free-to-Air broadcasters - Over-the-Top as the 2nd fastest growing media channel drives growth of Free-to-Air broadcasters
A new PWC study suggests that Over-the-Top (OTT) will be the second fastest growing media channel in the years to come with an expected annual growth of 10%. We believe this is beneficial for the commercial broadcasters as OTT platforms essentially are another distribution platform for existing content. Therefore we believe broadcasters should not only benefit on revenue through price premia but also margins as they essentially recycle existing content. It also suggests that broadcasters are more structurally robust than consensus might suggest. Keep BUY on RTL, M6, TF1 and ITV.
MMT RTL TFI ITV TL5 A3M MS PSM
08 Jun 18
LIBERUM: Free-to-Air broadcasters - A tale of two retailers
Earlier this year, we suggested that those interested in the TV vs online ad spending debate should look at the comparable performance of US department store giants Macy’s and Sears over Christmas as Macy’s had decided to pump more money into TV advertising whilst Sears had taken money out of TV and put it into digital media. What happened was that Macy’s beat expectations for sales whilst Sears saw a double-digit decline in like for like store sales. Whilst there may be other factors at play, we think the differing advertising strategies may have had a role in the divergent performance.
MMT ITV TFI RTL PSM A3M TL5 MS
23 Apr 18
Solid audience shares, good trend in advertising revenue
Solid audience shares and the increase in advertising revenue characterised Q1 18, which included the contribution of the RTL Radio division. In addition, the renewal of the distribution contracts during the quarter secures the broadcast of M6’s pay-TV channels and the remuneration of the channels and related services. The picture was different on the EBITA side, considering higher losses from the Football Club Girondins de Bordeaux.
20 Apr 18
LIBERUM: Media - Q1 results round I
Publicis had a first Q that was better than expected. The Spanish TV companies should reassure given Q1 was in line with expectations but we would urge the focus to be on the first 4 months rather than Q1 to isolate the Easter effect. M6 had a strong Q and beat expectations with its Free-toAir advertising revenues up 3.4%. Sky numbers should also be seen as positive and KPI momentum in the core UK/Ireland market looks good.
MMT PUB A3M SKY TL5
19 Apr 18
LIBERUM: French broadcasters - Softer TV advertising regulation pleaded by CSA
In an article in Les Echos, the president of the Conseil supérieur de l'audiovisuel (CSA), the French audiovisual regulation institution, pleaded for softer regulation for the TV broadcasters to create a level playing field with the digital advertisers. Softer regulation in the French TV advertising market is among the drivers of our BUY case for both TF1 and M6. We have written and suggested that possible regulation changes could add >€570m to the market, which is not yet reflected in the commercial broadcasters' share prices in our view.
Metropole Television Television Francaise 1
12 Apr 18
LIBERUM: M6 - FY roadshow feedback and new estimates
We held a London roadshow with the M6 IR team earlier this week following the company's FY results. We learned that the company remains focused on monetising its various advertising channels and extracting cross synergies, that the medium-term investment case drivers will be stemming from Radio, TV and Digital and how any excessive cash can be deployed. We have also adjusted our estimates following FY numbers and included cautious forecasts for the carriage fee deals. As a result our EPS rises by 2% in FY18E. We keep the BUY and €27 target price, which offers 17% upside.
02 Mar 18
A short-term call on the French economy
M6 released sound Q3 figures with revenues up 4% yoy to €272.4m, driven by an increase in advertising revenues (up 4.1%). The other divisions also improved with Production & Audio Rights up 1% and Diversifications up 5%. The group posted an EBITA of €160m, up 32% yoy thanks to strong advertising revenues and the positive transfers’ balance of the FCGB. All in all, M6’s financial situation improved with a positive cash position of €96.9m, a €33m rise compared to June 2017. The company forecasts a slight growth in the French TV advertising market and still expects to gain market share during FY17e.
15 Nov 17
A decent beginning to the year
M6 reported satisfactory Q1 17 revenues, with advertising (65% total group) up 5.7% (Q1 16 was +3.7%) and slightly improving combined audience shares (+0.3% to 13.9% from 13.6% a year earlier). FTA advertising revenues (61% total group) rose by a solid +5.6% (after a +5.4% acceleration in Q4 16), enabling consolidated revenue to rise by 3.8% to €323.7m, despite flat non advertising sales (+0.5%; 35% total group). The EBITA was up by only 2.9%, however, to €47.1m (compared to €45.8m), reflecting a flat margin of 14.6% versus 14.7% a year earlier (although the latter included a positive one-off impact from the football Club Girondins de Bordeaux), after rising programming costs.
02 May 17
A first-half "Euro 2016" supported
On the whole, M6 Group produced rather satisfactory results for the first part of the year. Its consolidated revenue rose by 2.5% to €645.5m over H1 16, supported by a satisfactory +5.3% in advertising revenue (after a solid +6.3% in Q2 helped by good audience rates). This was, however, partly offset by declining non-advertising revenues (-2.7%) which suffered from a disappointing home shopping business (Ventadis’ sales down 8.6% to €76m amid declining volumes sold). The EBITA solid improvement (+€33.4m, or +32.6% to €136m, i.e. a margin at 21.1% from 16.3%) mainly reflects a non-recurring €42.6m OP linked to the gradual stoppage of the M6 Mobile contract (a €50m contractual compensation less its automatic impact of €7.4m on operating expenses), while the TV business result was down by €10.1m (impacted by the Euro 2016 broadcast as well as investments in programmes for both FTA and pay-TV channels).
27 Sep 16
Mixed H1 15 results with some hopes for improvement going forward
A not very exciting H1 15 set of results for M6 which reported consolidated revenues down 0.7% to €629.9m (Q2: +0.1% after Q1: -1.5%), as trends for the M6 FTA channel's advertising revenues (60.5% total group) remained very low over the period (+0.8%) in a stabilising market and despite a favourable basis of comparison (H1 14: -2.3%)... The group also suffered from a 4.1% fall in its non-advertising revenues (lower cinema release with 4 films versus 9 in H1 14; Production & Audiovisual Rights revenues down 12.3%), combined with a €5.6m loss from the FCGB which hurt the consolidated OP, down €7.9m to €102.6m (a 16.3% margin compared with 17.4% a year earlier...; would have been up to 18.1% excluding FCGB). The group's net profit is down 9.7% to €58.3m.
17 Aug 15