NRJ GROUP (EPA:NRG) - NRJ GROUP - Press release annuals results 2018

Transparency directive : regulatory news

13/03/2019 18:25

Paris, March 13, 2019 - 5:45 pm
2018 annual results - NRJ Group

Strong growth of 23.4% in current operating profit(1) and 11.1% in net profit
                                Group share in 2018
                   Proposed dividend increases 13.3% to EUR0.17 per share

The NRJ Group Board of Directors held on March 13, 2019, and chaired by
Jean-Paul Baudecroux, approved the consolidated and the parent company
financial statements for 2018.

In millions of euros          2018   2017(r)      Change
Revenue excluding barters    392.3    382.2       +2.6%
EBITDAiv excluding barters    57.1     50.2      +13.7%
Current operating profit
excluding barters             33.7     27.3      +23.4%
Operating profit              32.3     27.2      +18.8%
Net profit Group share        22.0     19.8      +11.1%

In millions of euros    As at Dec 31, 2018   As at Dec 31, 2017(r)     Change
Net cash surplusvi           198.6                192.1                +3.4%
Shareholders'equity
Group share                  598.2                587.6                +1.8%

(r) Data restated after the application of IFRS 15, backdated to January 1,
2017 (appendice ii)

In the 2018 financial year, NRJ Group generated consolidated revenue(1) of
EUR392.3 million, a 2.6% increase compared to the previous financial year
despite two adverse factors for Radio activities: the repercussions of the
change in radio operating mode in Norway and the events that took place at the
end of the year in France.

The EBITDAiv excluding barters totalled EUR57.1 million, an increase of 13.7%.

The current operating profit excluding barters amounted to EUR33.7 million, a
significant increase of 23.4% mainly driven by the very strong reduction in the
Television division's operating loss(1) and by the improved profitability of
the Broadcasting division. The current operating margin ratev totalled 8.6%, up
by 1.5 percentage points compared to the previous financial year.

In 2018, the net profit Group share reached EUR22.0 million compared to EUR19.8
million in 2017, representing a significant increase of 11.1%. Besides the
significant increase in operating profit, it also includes a positive financial
result of EUR1.1 million and, conversely, an increase in the income tax expense
whose effective tax rate is 38.46%, as opposed to 32.23% in 2017.

On 31 December 2018, the net cash surplusvi reached EUR198.6 million, up by
+3.4%. The Group's free cash flowvii was EUR20.3 million thanks to the
financial year's good results and optimised monitoring of the changes in
Working Capital. The Group's lower generation of free cash flow in 2018
compared to the previous year, despite the good level of activity, can be
notably explained by the payment of EUR31.7 million as part of the procurement
of a new national and local FM network in Sweden, replacing the multi-city
network the Group previously operated in the country. As a reminder, this new
network, which was obtained as part of a new call for proposals for radio in
Sweden, enabled the Group to take its coverage of the population from 65% to
83%. This operation had an impact equivalent to EUR31.7 million on 2018's free
cash flow, but only EUR10.5 million on the net cash surplus, as it was financed
by the borrowing of the equivalent of EUR21.2 million.

Revenue and current operating profit (excluding barters) by activity

In millions of euros            2018      2017(r) Change

Radio                          235.0      240.5 (2)  -2.3%
Television                      90.8       87.3      +4.0%
Broadcasting                    66.5       54.4     +22.2%
Revenue excluding barters      392.3      382.2      +2.6%
Radio                           34.9       40.2 (2) -13.2%
Television                     (19.4)     (28.5)    +31.9%
Broadcasting                    19.6       14.9     +31.5%
Other activities                (1.4)       0.7    -300.0%
Current operating profit
excluding barters               33.7       27.3     +23.4%

(r) Data restated after the application of IFRS 15, backdated to January 1,
2017 (appendice ii)
(2) Restated after the combination of the "Music Media and Events" and
"International Activities" segments to form a new operating segment "Radio"
(appendice iii)

                                   RADIO
                     EDITORIAL AND TECHNICAL INVESTMENTS

In 2018, 11.2 million French people listened to one of the Group's radios each
day(3). Radio activities in France capitalised on its flagship brand NRJ which
cemented its dominant positions (France's number 1 radio among the under-65s(4)
and the number 1 morning show in France for listeners under 65(5)) and
continued to innovate by developing, for the first time in its history, a
drive-time show: an entertaining and interactive programme from 5-8pm hosted by
'Cauet et sa bande' that, thanks to its 1.5 million daily listeners, is
positioned as France's favourite show for the under-60 age group.(6)

The Radio division posted revenue(1) of EUR235.0 million in 2018, down 2.3%
compared with 2017. If the effects of the change to the operating mode in
Norway, which amount to EUR2.9 million, and the events that took place at the
end of the year in France were negated, revenue(1) from the Radio division
would have been relatively stable compared with 2017.

Within the Radio division, digital activity accelerated its progression with
growth of 10.6%, compared to growth of 4.0% in 2017.

In France, the decrease in revenue(1) combined with an increase in expenses,
principally due to continued development of digital activity, more costly
programmes and the increase in staff expenses, caused a EUR3.9 million decrease
in the Radio division's current operating profit excluding barters.

Internationally, the slight decrease(1) in revenue, excluding the change to the
operating mode in Norway, which did not have a significant impact on the
current operating profit,(1) along with the increase in expenses in Sweden
linked to operation of the new frequency plan, also contributed to the
reduction in the Radio division's current operating profit excluding barters.

                                    TELEVISION
                   VERY STRONG REDUCTION IN OPERATING LOSS(1)

Revenue(1) for the TV division totalled EUR90.8 million, up by 4.0% compared to
2017, outperforming the market.(7) In 2018, the TV division's revenue(1)
continued to build on its strong momentum which began in the fourth quarter of
2017, primarily thanks to Chérie 25's excellent commercial performance.

For 2018, the combined audience share for both of NRJ Group's free-to-air
channels (NRJ 12 and Chérie 25) was 2.5%(8) for the entire viewing public,
3.0%(8) for the 25-49 age group target and 3.4%(8) among the women under 50
responsible for purchases target.

NRJ Group's TV division led a targeted investment strategy in 2018 in favour of
audience profitability with a change to its programme scheduling. As such, with
its two free-to-air channels, the TV division recorded an increase of 12% in
its advertising revenue(1) per audience point in the 4+ age group and a EUR5.6
million decrease in operating expenses.

With the growth in its revenue(1) and the optimisation of its expenses, the TV
division significantly reduced its loss level in 2018. As such, the TV
division's current operating profit(1) improved by almost 32% with an operating
loss(1) brought down from EUR28.5 million in 2017 to EUR19.4 million.

                                  BROADCASTING
                   GROWTH IN REVENUE(1) AND PROFITABILITY

The Broadcasting division recorded revenue(1) of EUR66.5 million, an increase
of 22.2% compared to 2017, driven by organic growth of 7% in FM broadcasting
and DTT activity to a lesser extent, and by one-off DTT frequency reallocation
services of limited duration.

Current operating profit(1) increased by 31.5% to EUR19.6 million in 2018. This
growth reflects improved profitability in FM and DTT broadcasting activity and
also benefited from one-off items totalling about EUR3.8 million.

Dividend and share buyback programme

At the General Shareholders' Meeting on May 15, the Board of Directors will
propose the payment of a dividend of EUR0.17 per share for the 2018 fiscal year
with an ex-dividend date on June 3, 2019 and a payment date on June 5, 2019. It
will also propose that the General Shareholders' Meeting authorises a new share
buyback programme.

Recent change and outlook

Radio division:

In France:
* The Group will boost its investments in its programmes and their promotion,
  notably NRJ, in order to increase the total audience share for the four
  radios and their "QHM" (average quarter hour) for the high commercial
  priority 25-49 age group target. This strategy to consolidate the Group's
  position in French radio should enable it to strengthen its leadership
  among this age group target over the long term.
* The value-recovery strategy and the strengthening of sales teams shall
  continue.
* In 2019, the Group will also continue the editorial and commercial
  development of its digital activity.

Internationally:
* The Group will consolidate its positions and continue to invest in its growth
  drivers.
* In Sweden, 2019 will be a year marked by the full-year effect of the
  consequences of operating a new national network, after more than 25 years
  operating a multi-city network. This evolution, which will enable coverage
  of the population to go from 65% to 83%, requires technical changes and
  depends on a new partnership which will affect the activity's performance
  over the first few years of operation.

TV division:

In 2019, the Group will continue the audience profitability strategy it began
in 2018 in favour of improving the division's current operating profit.(1)

Broadcasting division:

In 2019, the Broadcasting division will continue its policy to gain new FM and
DTT market shares, as well as develop its various own broadcasting sites. The
revenue(1) and profitability of activities in 2019 will reflect the significant
decrease in frequency reallocation services, and the increase in hosting and
workforce expenses.

Next release: Financial information for the 1st quarter of 2019 - on May 6,
2019, after market close.

Additional information:

The consolidated and annual accounts have been audited. The audit reports will
be published once the procedures required for the filing of the Registration
Document have been completed.

The 2018 French version of Registration Document should be available on the
Group's website www.nrjgroup.fr, by March 29, 2019 at the latest.

APPENDICES

i Excluding barters:

In millions of euros       2018    2017(r)    Change

Revenue excluding barters  392.3    382.2      +2.6%
Revenue on barters          18.7     20.2      -7.4%
Revenue                    411.0    402.4      +2.1%
Current operating profit/
loss excluding barters      33.7     27.3     +23.4%
Current operating profit/
loss on barters             (1.4)    (0.1)       na
Current operating profit/
loss                        32.3     27.2     +18.8%

na: not applicable

ii Implementation of IFRS 15

The Group has implemented IFRS 15 - Revenue from Contracts with Customers - for
the first time, with a full retrospective application, thereby requiring the
restatement of comparative information.

This standard does not have a significant impact on the Group's results. Its
main impacts are as follows:
? The recognition of earnings from partnerships in the Nordic region (Sweden,
Norway and Finland) under revenue instead of other income from activities in
the amount of EUR14.3 million for 2017.
- The recognition of "similar" barters that had previously been eliminated,
with a total impact on revenue on barters amounting to EUR13.8 million for
2017.

12 months

In millions of euros  2017     IFRS 15 incidence IFRS 15 incidence    2017
                    published  of partnerships     of barters       restated
Revenue excluding
barters               367.9           14.3                           382.2
Music Media and
Events                187.2                                          187.2
television             87.3                                           87.3
International
Activities             39.0           14.3                            53.3
Broadcasting           54.4                                           54.4
Revenue on barters      6.4                             13.8          20.2
Revenue               374.3           14.3              13.8         402.4
Current operating
profit/loss excluding
barters                27.3                                           27.3
Current operating
profit/loss on barters  0.5                             (0.6)         (0.1)
Current operating
profit/loss            27.8                             (0.6)         27.2
Net profit Group share 20.2                             (0.4)         19.8
Shareholders'equity
Group share           586.7                              0.9         587.6

iii Change to segment reporting

NRJ Group modified its divisional structure, resulting in changes to segment
reporting. Specifically, it created the Radio Division, encompassing Music,
Media and  Events (MME) and International Activities, which have similar
business profiles. The Television, Broadcasting and Other Activities divisions
remain unchanged.

The Group now discloses revenue (excluding barters) and current operating
profit (excluding barters) for each of the four following divisions:
- Radio
- Television
- Broadcasting
- Other Activities

Pursuant to IFRS 8 - Operating Segments, 2017 data for each of the divisions
presented in the above disclosures has been restated to reflect the new
divisional structure.

iv EBITDA: current operating profit excluding barters transactions before
amortisation and impairment of tangible and intangible assets and before net
change in provisions recorded in the current operating profit but after current
depreciation on current assets. The caption "Net change in provisions" excludes
reversals used which are credited to the same line as that used for the
expenditures incurred.

In millions of euros                      2018   2017®
Current Operating Profit excluding
barters transactions                       33.7   27.3
Amortisation and impairment of tangible
and intangible assets, and net change
in provisions                              22.7   21.4
Change in provision for post-employment
benefits recognised in personnel expenses   0.7    1.5
EBITDAiv excluding barter transactions     57.1   50.2

v Operating margin rate: According to the Group?s rules, it corresponds to
the ratio between the current operating profit and revenue. Barters are
excluded.

vi Net cash surplus: Cash and cash equivalents net of outstanding bank
overdrafts and net of borrowings. Borrowings amounted to 22.9 million euros as
at December 31, 2018.

vii Free cash flow:

In millions of euros                     2018     2017®

Cash generated from operations before
interest and taxes                       57.4     50.2
Changes in Working Capital               21.2     11.1
Income taxes paid / reimbursed           (8.0)   (12.7)
Net cash flows from operating
activities (A)                           70.6     48.6
Net cash flows from investing
activities (B)                          (50.3)   (14.6)
Free cash flow (A)+(B)                   20.3     34.0

Notice: Some of the information contained in this financial release may be
provisional. This information reflects either trends or objectives and cannot
be taken as a forecast of results or of any other performance indicator. By its
very nature, such information is subject to risks and uncertainties which may,
in certain cases, be beyond the Company's control. More details on these risks
and uncertainties can be found in the Company's Registration Document, which is
available on its website (www.nrjgroup.fr) in the "Finances/ Publications
financières/ Rapports financiers" section.

Sources :
(1) Excluding barters: (appendice i).
(2) Restated after the combination of the "Music Media and Events" and
    "International Activities" segments to form a new operating segment,
    "Radio" (appendice ii).
(3) Médiamétrie, 126 000 radio, NRJ GLOBAL, 11.201.000 listeners, Cumulative
    2018, Monday-Friday, 5h-24h, aged 13 years +, AC.
(4) Médiamétrie, 126 000 radio, NRJ, Cumulative 2018, Monday-Friday,5h-24h,
    targets specified, AC.
(5) Médiamétrie, 126 000 radio, NRJ, Cumulative 2018, Monday-Friday, 6h-9h30,
    targets specified, AC.
(6) Médiamétrie, 126 000 radio, NRJ, Cumulative 2018, Monday-Friday,17h-20h,
    targets specified, AC.
(7) BUMP : Baromètre Unifié du Marché Publicitaire, press release of
    November 22, 2018 on the advertising market in the first nine months of
    2018 : Change in the TV advertising market revenue versus 2017 +1.8% in Q1
    2018, +1.6% in H1 2018 and +2.3 % in the first 9 months of 2018 compared
    to a change in revenue for the NRJ GROUP's TV division of +10.8% in
    Q1 2018, +10.7% in H1 2018 and +8.6% fo the first 9 months of 2018 .
(8) Médiamétrie-Médiamat, Audience share, Day of viewing NRJ GROUP TV
    Division = aggregate NRJ 12 + Chérie 25, aged 4 years + or targets
    specified, 03h-27h, Monday to Sunday, 2018.

About NRJ GROUP

NRJ GROUP is one of France's leading private media groups in the publishing,
production and broadcasting sectors and also markets its own media spaces.

In France, the Group tops the private radio market with its four brands (NRJ,
CHERIE, NOSTALGIE and RIRE & CHANSONS), is a significant player on the
television market where it operates and develops two free national channels
(NRJ 12 and CHERIE 25) and a paid channel (NRJ HITS, the number 1
cable-satellite-ADSL music channel) and, through its subsidiary towerCast,
ranks number two on the French broadcasting market. Backed by its strong
brands, marketing expertise and commercial performance, in recent years the
Group has also developed a digital ecosystem enabling it to monitor and
anticipate changes in the consumption of media via new delivery mechanisms,
expanding its original brand portfolio through websites, mobile apps,
multi-channel networks and nearly 240 Internet radio stations. Today, NRJ Group
is the number 1 private Internet radio group in France. This digital presence
enables the Group's advertising business to provide its clients with a more
targeted offering thanks to the strategic data collected by the Group.

On the international market, the Group is present in 16 other countries, with
NRJ/ENERGY, the number one international radio brand, and/or
NOSTALGIE/NOSTALGIA, either directly or through partnerships or licensing
agreements.

NRJ GROUP shares are listed on the Euronext in Paris (compartment B).
Codes - ISIN: FR0000121691; Reuters: NRG-FR; Bloomberg: NRG FP.

                    Analyst and Investor Information
  NRJ GROUP - Investor Relations 46-50 avenue Théophile Gautier 75016 Paris -
                             www.nrjgroup.fr
        FTI Consulting - Arnaud de Cheffontaines / Cosme Julien-Madoni

      NRJ GROUP, a public limited company with capital of 781,076.21 euros
                  Head office: 22, rue Boileau 75016 Paris
                          332 036 128 RCS PARIS

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