NRJ GROUP (EPA:NRG) - NRJ GROUP - Press release Half-Year Results 2020

Transparency directive : regulatory news

29/07/2020 17:57

Paris, July 29, 2020 - 5.45pm
2020 half-year results - NRJ Group

* Unprecedented context for the first half of 2020 due to COVID-19
* Decrease in revenue combined with significant cuts in expenses
* Strengthened financial soundness following sale of its stake in EIT

The NRJ Group Board of Directors which met on July 29, 2020 approved
consolidated financial statements for the first half of 2020. The period was
marked by an exceptional and unprecedented context. The Group's ability to
react enabled it to cope with a particularly brutal drop in revenue at the end
of the first quarter and the beginning of the second quarter of 2020. On June
23, NRJ Group also sold its remaining 5% interest in Euro-Information Telecom
to Euro-Information for EUR50 million.

In millions of euros                              HY 2020   HY 2019    Change

Revenue excluding barters                           141.6     192.6    -26.5%
EBITDAii excluding barters                            2.9      25.6    -88.7%
Current operating profit/loss excluding barters     (13.9)     10.6       n.a
Operating profit/loss                               (13.4)      8.9       n.a
Financial result                                     41.0      (0.8)      n.a
Net profit Group share                               27.4       3.9   +602.6%

                                                    As at     As at
                                                  June 30,   Dec 31,
In millions of euros                                 2020      2019    Change

Net cash surplusiii                                 238.8     179.8    +32.8%
Shareholders'equity Group share                     632.2     604.8     +4.5%

For the first half of 2020, set back by the health crisis and its economic
consequences, the Group recorded a EUR47.2 million (-29.9%) drop in revenue(1)
for its media activities, reaching a low point in April 2020, with a reversal
in June. The scenario took place as follows:

* In the first quarter, the Group's media revenue(1) dropped 13.6% compared to
  the first quarter of 2019.
* In April and May, the decrease was in line with the estimation of -60%.
* In June, the Group saw a reversal in trends for radio media in France, which
  was slower in television, but still suffered from the decrease in advertising
  investments. Media revenue is down16.6%.
* As a result, in the second quarter, the Group's media revenue(1) was hit hard
  by the consequences of the health crisis and fell 44.4%.

NRJ Group's performance in the first 6 months was marked by the Group's quick
response to the brutal drop in advertising revenue(1) after the lockdown was
announced. As of March 2020, NRJ Group took measures to:

* implement new ways of working to provide listeners, viewers and clients the
  services they expect, whilst first and foremost preserving its employees'
  health;
* offer advertisers solutions tailored to their specific communication needs
  for that period;
* launch a plan to reduce expenses and investments.

EUR23.1 million were saved in expenses for Radio, Television and Other
activities, absorbing almost 49% of the drop in media revenue. In addition, the
COVID-19 health crisis has not had a significant impact on the Broadcasting
division's revenue(1) and profitability in the first half of 2020, even if it
has slowed down work on new sites.

Consequently, the Group's current operating loss(1) for the first half of 2020
amounted to -EUR13.9 million. In the first half of 2019, this result was a
profit of EUR10.6 million.

Thanks to the capital gain generated by selling NRJ Group's minority share in
Euro-Information Telecom, the financial result recorded an increase of EUR41.8
million, raising the Net profit Group share to EUR27.4 million, compared with
EUR3.9 million for the first half of 2019.

The free cash-flow(iv) generated by the Group during the first half of 2020
reached EUR62.2 million (including a EUR5.3 million positive impact related to
the IFRS 16 accounting standard) and, on June 30, 2020, the Group's net cash
surplus(iii) was EUR284.7 million which, after applying the IFRS 16 standard
and taking the EUR31.5 million in lease liabilities into account, totals
EUR238.8 million.

Revenue and current operating profit (excluding barters) by activity

In millions of euros         HY 2020   HY 2019     Change

Radio                           80.7     112.5     -28.3%
Television                      29.9      45.3     -34.0%
Broadcasting                    31.0      34.8     -10.9%
Revenue excluding barters      141.6     192.6     -26.5%
Radio                           (6.7)     11.4       n.a
Television                     (15.4)     (8.0)    -92.5%
Broadcasting                     8.1       8.5      -4.7%
Other activities                 0.1      (1.3)      n.a
Current operating profit/
loss excluding barters         (13.9)     10.6       n.a

                                     RADIO

In France

In the first quarter, lockdown measures led to advertisers immediately and
massively cancelling their campaigns from16 March; the local radios and the
regional advertising sales houses were closed, and event-related activities
were stopped. These unprecedented measures disrupted the positive dynamic that
had been recorded up to this point, and caused a 38.2% drop in radio revenue(1)
in France in March.

The second quarter saw a 44.3% drop in radio revenue(1) in France. After April
and May, which were heavily affected by the drop in advertising, the Group
recorded a more limited year-on-year reduction of 10.7% in June. The
improvement was greater for national radio, whose advertising revenue(1) in
June was similar to that of last year (-1.4%). Once again, thanks to its
strength, efficacy and flexibility, radio media enabled advertisers to react
swiftly, increasing their traffic and destocking, making it the perfect media
for crisis recovery.

Thanks to the core values of its unifying brands that are familiar to French
consumers, the Group is the leading commercial radio offer for the high
commercial priority targets: the 25-49 age group target(2) and the Women Under
50 Responsible for Purchases target(2). NRJ is France's number 1 radio station
for listeners in the under-65 age group(3); 'Manu dans le 6/9' is France's
number one morning show for listeners in the under-60 age group(4), and
'C'Cauet' is France's number one drive-time radio show for the under-65 age
group(3).

In addition, in June, the Group cemented its position as the number one private
group for Internet radio(5) and the Group's 4 premium radio stations saw
simultaneous annual increases(6) of 13% for NRJ, 29% for Nostalgie, 23% for
Chérie FM and 5% for Rire et Chansons for the radio season from September 2019
to June 2020.

Internationally

In Europe, the Group's radios also worked hard to support their listeners and
advertisers. In Germany, Austria and Belgium, the local health measures
resulted in a drop in revenue(1) in March of 12%, 21% and 27% respectively, and
38%, 22% and 53% in the second quarter. Non-advertising revenue from
partnerships in Sweden and Finland has not suffered the consequences of the
COVID-19 crisis.

In this exceptional context, the Radio division's revenue(1) totalled EUR80.7
million in the first half of 2020, a decrease of 28.3% (-EUR31.8 million)
compared to the first half of 2019.

The plan to reduce expenses and investments which was quickly implemented
enabled savings of EUR13.7 million, leading to a current operating result(1) of
-EUR6.7 million, down EUR18.1 million compared to EUR11.4 million for the first
half of 2019.

                                TELEVISION

In the context of the COVID-19 crisis, the TV division's revenue(1) reached
EUR29.9 million for the first half of 2020, down EUR15.4 million compared to
the first half of 2019, or -34.0% (-13.7% for the first quarter and -51.9% for
the second quarter).

Like the majority of private groups (excluding their 3 news channels, which saw
their audience share in the 4+ age group increase by 1.3 percentage points(7)),
NRJ Group recorded a drop in its audience share in the 4+ age group to 2.3%(8)
for the period. Adjustments to NRJ 12 and Chérie 25's programme scheduling
also disadvantaged the Group's TV division's audiences for the first half of
2020.

EUR8.0 million were saved over the period and helped reduce the impact of the
decrease in revenue(1) with a current operating result(1) of -EUR15.4 million,
down EUR7.4 million compared to the first half of 2019. Part of the programming
cost savings in the first half of 2020 are only temporary as certain programmes
have been postponed until the second half of 2020.

                               BROADCASTING

As a reminder, in the first half of 2019, towerCast recorded revenue linked to
one-off DTT frequency reallocation services, which ended on 30 June 2019. Given
this negative base effect, revenue(1) for the Broadcasting division in the
first half of 2020 totalled EUR31.0 million, down EUR3.8 million (-10.9%)
compared to the first half of 2019. Discounting this item, the Broadcasting
division's revenue(1) recorded growth of more than 5% for the first 6 months of
the 2020 financial year.

The towerCast market share continued to increase in the first half of 2020,
both for DTT (+0.4 percentage points to 25.4%) and for FM (+0.4 percentage
points to 24.9%). towerCast continued with significant investments in its
infrastructure to, on one hand, offer radio and television producers an
alternative offer, and, on the other hand, reduce its own dependency on the
historically dominant operator, TDF. towerCast built 13 new sites in the first
half of the year, replacing 17 sites from third-party operators. It now
operates on 837 sites.

In the first 6 months of 2020, the division was marked by savings in expenses
created partly by the lockdown and partly by postponing projects. As such,
despite the impact of the lack of one-off services in the first half of 2020
compared to June 30, 2019, the division's current operating profit(1) was only
down EUR0.4 million to EUR8.1 million.

Recent change and outlook: COVID-19

Whilst media revenue(1) in France is maintaining its positive trend for July,
visibility beyond this point is still severely limited, particularly for the
last 4 months of 2020, which will be decisive for the annual revenue(1).

Next release: Third quarter 2020 financial information:
November 4, 2020 (after market close).

Additional information:

A limited review on the condensed interim consolidated financial statements has
been carried out. The Statutory Auditors' report will be issued with
unqualified opinion once all procedures required to file the half-year
financial report have been completed.

The French version of the 2020 half-year financial report will be available on
the Group's website www.nrjgroup.fr by July 31, 2020 at the latest.

APPENDICES

(i) Excluding barters:

In millions of euros                       HY 2020   HY 2019    Change

Revenue excluding barters                    141.6     192.6    -26.5%
Revenue on barters                             4.8       9.3    -48.4%
Revenue                                      146.4     201.9    -27.5%
Current operating profit/
loss excluding barters                       (13.9)     10.6   -231.1%
Current operating profit/
loss on barters                                0.7      (1.5)  +146.7%
Current operating profit/loss                (13.2)      9.1   -245.1%

(ii) EBITDA: Current Operating Profit/Loss excluding barters transactions
before amortisation of tangible and intangible assets and before net change in
provisions recorded in the Current Operating Profit/Loss but after current
depreciation on current assets.

In millions of euros                       HY 2020    HY 2019

Current Operating Profit/Loss
excluding barters transactions               (13.9)      10.6
Amortisation and impairment of
tangible and intangible assets,
and net change in provisions                  11.4       10.3
Amortisation of right-of-use assets            4.7        4.1
Change in provision for post-employment
benefits recognised in personnel expenses      0.7        0.6
EBITDA excluding barter transactions           2.9       25.6

(iii) Net cash surplus:

                                          As at June 30,   As at Dec 31,
In millions of euros                          2020             2019

Cash and cash equivalents                    284.7            229.5
Group's outstanding bank
overdrafts and borrowings                    (14.4)           (16.0)
Lease liabilities                            (31.5)           (33.7)
Net cash surplus                             238.8            179.8

(iv) Free cash flow:

In millions of euros                                      HY 2020    HY 2019

Cash generated from operations before interest and taxes      4.8       25.3
IFRS 16 incidence on Cash generated                           4.8        4.2
Changes in Working Capital                                   19.7        1.9
IFRS 16 incidence on Changes in Working Capital               0.5        0.4
Income taxes (paid) / reimbursed                             (4.1)      (5.2)
Net cash flows from operating activities (A)                 20.4       22.0
Net cash flows from investing activities (B)                 41.8       (9.4)
Free cash flow (A)+(B)                                       62.2       12.6

Sources:
(1) Consolidated revenue excluding barters, not audited, and according to IFRS
    standards.
(2) Médiamétrie, 126 000 radio, January-March 2020, NRJ Global,
    Monday-Friday, 5h-24h, target specified, AC, QHM and PDA.
(3) Médiamétrie, 126 000 radio, January-March 2020, NRJ, Monday-Friday ,
    13-64 age group, 5h-24h (NRJ), 16h00-20h00 (C'CAUET), AC.
(4) Médiamétrie, 126 000 radio, January-March 2020, NRJ, Monday-Friday, 13-59
    age group, 6h00-9h30 (MANU DANS LE 6/9), AC.
(5) ACPM-OJD, global digital radio broadcasting, June 2020, active listening
    sessions +30 seconds, data for France, NRJ Group: 35,821,609 active
    listening sessions.
(6) ACPM-OJD, global digital radio broadcasting, Season September 2019-June
    2020, Groupe NRJ & Radios, active listening sessions +30 seconds, data for
    France and annual change, Radio Premium NRJ = 90,057,264 sessions in Season
    19-20 vs. 79,586,335 in Season 18-19, NOSTALGIE = 50,090,574 sessions in
    Season19-20 vs. 38,737,892 in Season 18-19, CHERIE FM = 42,234,987
    sessions in Season 19-20 vs. 34,339,365 in Season 18-19, RIRE & CHANSONS =
    21,125,433 sessions in Season 19-20 vs. 20,061,585 in Season 18-19.
(7) Médiamétrie-Médiamat, Audience share, Day of viewing, (BFM
    TV+LCI+CNEWS), aged 4 years, 03h-27h, Monday to Sunday, HY 2020 vs HY 2019,
    change in points.
(8) Médiamétrie-Médiamat, NRJ GROUP TV Division = aggregate NRJ 12 + Chérie
    25, Audience share, Day of viewing, aged 4 years, 03h-27h, Monday to
    Sunday, HY 2020 vs HY 2019.

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 Universal Registration
Document, which is available on its website (www.nrjgroup.fr) in the "Finances/
Publications financières/ Rapports financiers" section.

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 FM, 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 and voice 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 17 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 /
         Tel: + 33 1 47 03 68 19 / e-mail: nrjgroup@fticonsulting.com

     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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NRJ GROUP (EPA:NRG) - NRJ GROUP - Press release Half-Year Results 2020

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