H1 2020 RESULTS

29 JULY 2020

H1 2020 HIGHLIGHTS

DURING THE COVID-19 CRISIS, THE TF1 GROUP HAS DEMONSTRATED ITS ADAPTABILITY AND STRONG REACTIVITY

  • Strong ratings thanks to editorial choices meeting the public's expectations
  • Significant downsizing of the programming costs offsetting over 50% of the decrease in advertising revenues
  • Efficient management of the health crisis by protecting employees health, adapting working methods (work from home and part-timework) and enabling the news activity to proceed

THE TF1 GROUP IS FULLY OPERATIONAL AND READY TO BENEFIT FROM RECOVERY

  • Gradual slowdown in the decline of the advertising market since the beginning of June
  • Strategic decision to keep fresh and premium programming for the last four months of 2020
  • Strong reactivity from Newen in resuming all shooting as early as possible
  • Sound financial position with low debt and access to available bilateral credit facilities

2

H1 2020 Activity Review

THE GROUP CREATES A UNIQUE BOND THROUGH ITS BROAD CONTENT OFFER

  • High level of TV viewing time since March (3 hrs 56 mins in H1 2020 ; +26min yoy)
  • Audience share of Ind. 25-49 y/o remained at a high level in H1 2020 at 29.6 % (stable yoy)
  • High and quick reactivity on the grid management with more family-oriented programmes

POPULAR CULT COMEDIES

FLAGSHIP ENTERTAINMENT BRANDS

INTERNATIONAL FAMILY FRANCHISES

ORIGINAL US SERIES

Harry Potter

@Warner Bros Ent. Harry Potter Publishing Rights JK Rowling

8.0 million TV viewers

Record season with

7.2 million TV viewers on

5.2 million TV viewers on

(Ranked no.1 during lockdown

6.8 million TV viewers on

average for the 8 movies

average for the 1st season

excl. news)

average

47% of W<50PDM

35% of W<50PDM

42% of W<50PDM

Source: Médiamétrie - Médiamat

4

LEADERSHIP IN NEWS CONSOLIDATED

  • Daily news shows extended in order to provide comprehensive and rigorous coverage of the health crisis
  • Enhanced leader status thanks to TF1's ability to attract top politicians and health experts

6.3m TV viewers on average

6.7m TV viewers on average

6.8m TV viewers on average

1.3% audience share for Ind. aged 4+ (+0.3 pts yoy)

+1.3m TV viewers vs H1 2019

+ 1.3m TV viewers vs H1 2019

+ 1.4m TV viewers vs H1 2019

No. 2 news channel for Ind. aged 4+

Source: Médiamétrie - Médiamat - H1 2020

5

MYTF1 LEADERSHIP CONFIRMED, ONE YEAR AFTER RELAUNCH

  • Around 21 million active user accounts
  • + 47% video views* on OTT
  • Catch-upTV enhanced by AVOD offer attracting young people through successful content like manga Naruto, US series 90210 or French soap Sous le Soleil

*Sept 2019 to June 2020 vs Sept 2018 to June 2019 - excluding app FAI and news

6

SIGNIFICANT REDUCTION OF THE PROGRAMMING COSTS

    • Revisited formats for key franchises with stretched episodes and no-public attendance
    • High number of reruns both on TF1 and DTT channels
    • Extended daily news shows at no additional cost
    • Extra supply of movies at an optimized price
  • Savings of €107m for the first 6 months of 2020…
  • … offsetting 52% of the drop in broadcasting advertising revenues

7

STRONG REACTIVITY FROM

  • Understanding the impacts of the crisis in the different sectors
  • Accompanying our historical clients during the crisis
  • Attracting new advertisers (+106 in H1 2020 yoy)
  • Motivating advertisers to return to TV in the last 4 months of 2020

TF1 Pub organized webinars with

New advertisers in H1 2020

advertisers to help them during the crisis

8

AFTER LOCKDOWN, A GRADUAL RETURN TO TV ADVERTISING BY SECTOR

Based on TV ad revenue trends through H1 2020

9

EARLY REBOUND OF NEWEN ACTIVITY AFTER LOCKDOWN

  • Some shooting continued with social distancing rules observed (the daily programme Le Magazine de la santé and the famous Belgian TV quiz show Blokken)
  • Shooting restarted as early as possible (since mid-May for the 2 French daily soaps Demain Nous Appartient and Plus Belle La Vie)
  • Book of orders remaining at a high level at more than 1,500 hours
  • Additional sales from the TF1 Studio and Reel One catalogues

© Fabien Malot

Le Magazine de la santé

Shooting restart of

10

Demain Nous Appartient

STRONG ATTRACTIVENESS OF UNIFY BRANDS

  • Highly relevant content on the web with Doctissimo on health and Marmiton on cooking
    • 437m visits to Marmiton website in H1 2020; +56% yoy
  • Significant reduction of advertising spend in digital and programmatic due to the crisis…
  • … but resilience of the social e-commerce business
  • Development of synergies with TF1 channel
    • Opportunistic TV advertising campaigns for My Little Box, Gambettes Box and Beautiful Box on TF1
    • Editorial partnership between News and Doctissimo

11

THE TF1 GROUP HAS SUPPORTED A VARIETY OF GOOD CAUSES DURING THE HEALTH CRISIS

SOLIDARITY

  • Identifying hospital's urgent needs and putting together product and service offers from companies
  • Raising funds to support health workers, patients, vulnerable people and medical research
  • Donating game show gains to charities involved in health care, fighting violence against women and food distribution

NEWS

FREE TV CAMPAIGNS

DEDICATED TV PROGRAMMES

12

H1 2020 Financial Results

CONSOLIDATED REVENUE

(€M)

H1 2020

H1 2019

CHG.€M

CHG.%

BROADCASTING

683.3

890.8

(207.5)

-23.3%

ADVERTISING REVENUE

586.1

791.4

(205.3)

-25.9%

OTHER REVENUE

97.2

99.4

(2.2)

-2.2%

STUDIOS & ENTERTAINMENT

131.8

168.8

(37.0)

-21.9%

PRODUCTION / SALE OF AUDIOVISUAL RIGHTS

107.8

110.5

(2.7)

-2.4%

REVENUE FROM GAMES, MUSIC, LIVE SHOWS & HOME SHOPPING

24.0

58.3

(34.3)

-58.8%

UNIFY

68.4

85.6

(17.2)

-20.1%

WEB PUBLISHING (DIGITAL CONTENT, SOCIAL E -COMMERCE)

53.5

67.7

(14.2)

-21.0%

OTHER REVENUE (DIGITAL MARKETING)

14.9

17.9

(3.0)

-16.8%

TOTAL REVENUE

883.5

1,145.2

(261.7)

-22.9%

Excluding the effect of changes in structure, H1 2020 revenues dropped by -22.6%

Under IFRS 16 norm

14

COST OF PROGRAMMES

(€M)

H1 2020

H1 2019

CHG.€M

CHG.%

DRAMA / TV MOVIES / SERIES / PLAYS

-109.0

-150.2

41.2

-27.4%

VARIETY / GAMESHOWS / MAGAZINES

-107.1

-138.2

31.0

-22.5%

NEWS (INCLUDING LCI)

-65.7

-70.2

4.5

-6.4%

MOVIES

-52.3

-55.5

3.2

-5.8%

CHILDREN'S PROGRAMMES

-4.2

-5.3

1.1

-20.8%

SPORTS

-0.5

-26.9

26.3

-98.0%

TOTAL

-338.8

-446.2

107.4

-24.1%

15

CURRENT OPERATING PROFIT PER SEGMENT

(€M)

H1 2020

H1 2019

CHG.€M

CHG.%

BROADCASTING

75.9

142.5

(66.6)

-46.7%

MARGIN

11.1%

16.0%

-

-4.9PTS

STUDIOS & ENTERTAINMENT

0.0

17.3

(17.3)

-100.0%

MARGIN

0.0%

10.2%

-

-10.2PTS

UNIFY

(8.1)

3.2

(11.3)

N/A

MARGIN

-

3.7%

-

-

CURRENT OPERATING PROFIT

67.8

163.0

(95.2)

-58.4%

MARGIN

7.7%

14.2%

-

-6.6PTS

Under IFRS 16 norm

16

CONSOLIDATED INCOME STATEMENT

(€M)

H1 2020

H1 2019

CHG.€M

CHG.%

CONSOLIDATED REVENUE

883.5

1,145.2

(261.7)

-22.9%

TOTAL COST OF PROGRAMMES

(338.8)

(446.2)

107.4

-24.1%

OTHER CHARGES, DEPRECIATION, AMORTIZATION, PROVISIONS

(476.9)

(536.0)

59.1

-11.0%

CURRENT OPERATING PROFIT

67.8

163.0

(95.2)

-58.4%

CURRENT OPERATING MARGIN

7.7%

14.2%

-

-6.6PTS

OTHER OPERATING INCOME AND EXPENSES

0.0

0.0

0.0

N/A

OPERATING PROFIT

67.8

163.0

(95.2)

-58.4%

COST OF NET DEBT

(1.4)

(1.0)

(0.4)

40.0%

OTHER FINANCIAL INCOME AND EXPENSES

(5.5)

(3.3)

(2.2)

66.7%

INCOME TAX EXPENSE

(21.8)

(51.2)

29.4

-57.4%

SHARE OF PROFITS / (LOSSES) OF ASSOCIATES

(1.4)

(0.6)

(0.8)

133.3%

NET PROFIT

37.7

106.9

(69.2)

-64.7%

NET PROFIT ATTRIBUTABLE TO THE GROUP

38.4

107.3

(68.9)

-64.2%

Under IFRS 16 norm

17

BALANCE SHEET

CONSOLIDATED ASSETS (€M)

JUN.30TH 2020

DEC. 31ST 2019

CHG.€M

TOTAL NON-CURRENT ASSETS

1,507.5

1,507.3

0.2

TOTAL CURRENT ASSETS

1,938.7

1,836.8

101.9

TOTAL ASSETS

3,446.2

3,344.1

102.1

CONSOLIDATED LIABILITIES (€M)

JUN.30TH 2020

DEC. 31ST 2019

CHG.€M

TOTAL SHAREHOLDERS' EQUITY

1,591.1

1,564.1

27.0

SHAREHOLDERS' EQUITY ATTRIBUABLE TO THE GROUP

1,589.5

1,562.4

27.1

TOTAL NON-CURRENT LIABILITIES

402.5

377.5

25.0

TOTAL CURRENT LIABILITIES

1,452.6

1,402.5

50.1

TOTAL LIABILITIES & SHAREHOLDERS' EQUITY

3,446.2

3,344.1

102.1

NET DEBT (-) EXCLUDING LEASE OBLIGATIONS

(22.1)

(126.3)

104.2

NET DEBT (-) INCLUDING LEASE OBLIGATIONS

(114.3)

(225.8)

111.5

Under IFRS 16 norm

18

TRENDS IN NET CASH POSITION H1 2020 (excluding the impact of IFRS 16*)

2020 €M

104.8

138.7

-22.1

-9.6

-115.3

-5.7

-8.7

-126.3

Cash position

Operating

Decrease

Change in

Net capital

Acquisitions/

Dividends, shares

Cash position

1st January

cashflow**

in lease

operating

expenditure

disposals

buyback and stock-

30th June

obligations

working

options and

capital needs

others***

2019

-27.5

235.7

-9.1

10.2

-119.9

-32.3

-85.8

-28.7

(*) Excluding lease obligations

(**) Cash flow after income from net surplus cash/cost of net debt, interest expense on lease obligations and income taxes paid

19

(***) Including acquisition of financial assets, net change in borrowings and cost of net debt

COVID-19 IMPACTS

  • Negative impact on H1 2020 results
    • Total revenue drop of around €250m
    • EBIT drop of around €100m
  • Low visibility for the coming months
  • Withdrawal of our objectives for 2021:
    • Unify: revenue of at least €250m and EBITDA margin of at least 15%
    • TF1 group: improvement in return on capital employed relative to the 2018 level (8.8%)

20

Outlook

STRONG LINE-UP TO SEIZE OPPORTUNITIES IN BACK-TO-SCHOOL PERIOD

  • New seasons of key franchises: Mask Singer, Koh Lanta, etc.
  • TV premieres for French hit movies and international blockbusters: Le Sens de la Fête, A star is born, etc.
  • Brand new mini series: Grand Hotel, HPI, Pourquoi je vis, etc.
  • New hosts on LCI

KEY FRANCHISES

FRENCH DRAMA

CINEMA

@Christophe Chevalin - TF1

©Thibault Grabherr /Itinéraire Productions/TF1

2nd season on TF1

HPI, new series on TF1

More than 3 million box

Darius Rochebin and

office entries

Eric Brunet

22

MANY NEW PRODUCTIONS IN THE PIPELINE FOR NEWEN

  • Strong line-up of shooting for H2 2020 with originals like Grand Hotel (TF1) and Opera (OCS)
  • 2 new daily soaps Ici tout commence (TF1) and Lisa (VTM) confirming Newen know-how in such format
  • More than 10 production projects for platforms like the movie Ferry and the series Undercover (season 2) for Netflix both produced by De Mensen

Lisa

© VTM

Undercover (season 2)

© Nyk Dekeyser

23

MORE OPPORTUNITIES TO COME

SALTO, A PLATFORM WITH LOCAL CONTENT ON AN UNPRECEDENTED SCALE

  • Platform beta test in July 2020
  • Launch in fall 2020

FRENCH REGULATION COULD OPEN UP NEW OPPORTUNITIES FOR THE TF1 GROUP

  • Support for private audiovisual group through the settlement of a tax credit based on 15% of the programming costs related to French and European drama and movies incurred between March and December 2020
  • Decrees to be signed this summer on TV advertising for movies and addressable TV

24

CONCLUSION

  • The TF1 group has demonstrated its high reactivity to face the crisis...
  • … and is confident in the long-term sustainability of its activities
    • High TV consumption level renews the relevance of TV as a media
    • Production and digital markets offer strong growth potential

MOVING TO TOTAL VIDEO

25

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TF1 - Television Francaise 1 SA published this content on 29 July 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 29 July 2020 06:05:11 UTC