TF1 (EPA:TFI) - TF1 GROUP 2021 FIRST-HALF RESULTS

Transparency directive : regulatory news

28/07/2021 07:42

[28.07.2021] PRESS RELEASE

TF1 GROUP 2021 FIRST-HALF RESULTS

First-half consolidated revenue up 27.8% at EUR1,128.7m, close to 2019 level
Advertising revenue up 71.5% in Q2 2021 at EUR444.6m, up 1% on 2019 Current
operating profit EUR169.1m in H1 2021, current operating margin 15% 2021
guidance: double-digit current operating margin from 2021, in line with 2019
levels
                                                       Boulogne, 28 July 2021

The TF1 Board of Directors, chaired by Gilles Pélisson, met on 27 July 2021 to
close off the financial statements for the first half of 2021. The results
below are presented using the new  segmental reporting structure adopted  by
the TF1 group and in accordance with IFRS 16 (applicable from 1 January 2019).
Published revenue and operating profit data are available in our 2021
first-half Financial Information Report and on the TF1 group corporate website:
www.groupe-tf1.fr/en.

(EURm)         Q1 2021 Q1 2020 Q2 2021 Q2 2020 H1 2021 H1 2020 CHG. EURM CHG.%
TF1 group
advertising
revenue*         357.9   355.8  444.6   259.2   802.5   615.0   187.5  30.5%
Revenue from
other
activities*      151.9   138.1  174.3   130.4   326.2   268.5    57.7  21.5%

Media **         444.5   444.1  538.9   340.9   983.4   785.0   198.4  25.3%
Advertising
revenue**        357.8   355.8  444.6   259.3   802.4   615.0   187.4  30.5%
o/w digital
advertising
revenue**         27.9    27.4   35.2    25.3    63.1    52.7    10.4  19.7%
Newen Studios**   65.2    49.9   80.1    48.6   145.3    98.4    46.9  47.6%
Consolidated
revenue*         509.8   493.9  618.9   389.6 1,128.7   883.5   245.2  27.8%
Media **          46.8    42.7  100.6    28.1   147.4    70.8    76.6 108.1%
Newen Studios**   10.0    (0.7)  11.7    (2.3)   21.7    (3.0)   24.7    -
Current operating
profit*           56.8    42.0  112.3    25.8   169.1    67.8   101.3 149.4%
Current operating
margin*          11.1%    8.5%  18.1%    6.6%   15.0%    7.7%     -  +7.3pts
Operating profit* 56.8    42.0  109.9    25.8   166.7    67.8    98.9 145.9%
Net profit
attributable to
the Group*        34.3    24.0   74.1    14.4   108.4    38.4    70.0 182.3%
Cost of programmes
for the 5 channels*
                (202.1) (199.1)(246.6) (139.7) (448.7) (338.8) (109.9) 32.4%
Cost of
programmes***   (210.8) (208.2)(255.6) (147.2) (466.4) (355.4) (111.0) 31.2%

*Published data
**Proforma data
***"Cost of programmes" is a new indicator, which replaces "Cost of programmes
for the 5 channels" from 31 March 2021. Unlike the previous indicator, it
includes costs associated with non-linear activities (MYTF1, LCI Digital) and
with the theme channels (TV Breizh, Ushuaïa TV and Histoire TV).

In light of (i) the strategy implemented from autumn 2020 of developing
synergies between the TF1 group's broadcasting activities and its digital
operations (Unify), (ii) the organisational changes announced on 23 June
2021(1) and (iii) the divestment of TF1 Games, the Group has changed the
composition of its operating segments with effect from the first half of 2021.

The Group's digital operations (Unify) are now included with our broadcasting
activities in  a  new operating segment, "Media", alongside our music and
entertainment activities. This allows for a better understanding of our content
production and distribution operations, via a separate segment ("Newen
Studios").(2)

To facilitate the interpretation of the Group's results for the six months
ended 30 June 2021, proforma figures for the six months ended 30 June 2020 are
provided using the new presentation.

Consolidated revenue of the TF1 group for the first half of 2021 reached
EUR1,128.7 million, a sharp increase of EUR245.2 million (+27.8%). On a
constant structure basis and at constant exchange rates, consolidated revenue
was up 28.5%.

Group advertising revenue was EUR802.5 million, a year-on-year rise of EUR187.5
million (+30.5%). This sharp increase was mainly driven by strong momentum in
TV advertising during the second quarter, the Q2 2020 comparative having been
affected by the first lockdown.

Revenue from other activities amounted to EUR326.2 million, up EUR57.7 million
(+21.5%). Content production activities at Newen posted strong revenue growth
compared with the previous year, when most shooting was suspended for nearly
two months.

Current operating profit amounted to EUR169.1 million(3), an increase of
EUR101.3 million versus the H1 2020 figure of EUR67.8 million. The H1 2021
figure includes a TV broadcasters tax credit of approximately EUR20 million,
offset against an increase in impairment allowances due to a higher level of
programme deliveries than in 2020.

This topped the level achieved in 2019 (EUR163.0 million). Current operating
margin for the period was 15.0%.

Operating profit came to EUR166.7 million, after charging EUR2.4 million of
non-recurring expenses relating to the proposed merger between TF1 and M6.

Net profit attributable to the Group was EUR108.4 million, up EUR70.0 million
year-on-year.

(1) See press release issued 23 June 2021:
https://groupe-tf1.fr/sites/default/files/communiques/communique_de_presse_-
_evolution_organisation_groupe_tf1.pdf
(2) For the first half, the divested operations of TF1 Games continue to be
presented within the Newen Studios segment.
(3) Current operating profit after leases (i.e. excluding the impact of IFRS
16) for H1 2021 was EUR167.6 million, up EUR101.5 million year-on-year.

Media

- Audiences(4)

French viewers' enthusiasm for television held up strongly in the first half of
2021. Average daily viewing time among individuals aged 4+ was 3 hours 45
minutes, down year-on-year but 17 minutes higher than in the first half of June
2019.

The audience share of the TF1 group among advertising targets remained high,
and increased year-on-year (33.5% of W<50PDM(5), +1.6 points; 30.5% of 25-49
year-olds, +0.9 of a point), demonstrating the appeal of TV and the pulling
power of the Group's channels.

In the first half of 2021, as public health restrictions gradually eased, the
TF1 group's channels again proved their ability to unite, entertain and inform
the people of France. These good performances were built on successes across
all targets and content genres:

- A strong French drama offering, including the runaway success of the new
  series HPI which attracted up to 12.4 million viewers and a best-ever TV
  catch-up audience of over 2.4 million (adding an extra 20%).
- The return of must-see sport, with the Euro 2020 football tournament
  attracting a peak audience of 16.3 million for the France/Switzerland match.
- Iconic entertainment shows achieving high viewing figures, such as The Voice
  (peak audience of 6.8 million) and Quotidien on TMC, France's most-watched
  talk-show (peak audience of 2.4 million).
- Go-to news coverage, with strong ratings for the lunchtime bulletin (peak of
  6.5 million viewers, 45.5% share of individuals aged 4+) and the evening
  bulletin (25.3% share of individuals aged 4+ on weekdays, rising to 28.0% at
  weekends).

The TF1 group's online platforms also posted strong ratings, leveraged by
non-linear viewing figures on the MyTF1 catch-up platform, racking up 1.4
billion video views to end June 2021 (up 21% year-on-year).

Every day, nearly 33 million French people are reached by at least one of the
TF1 group's channels.

On the Marmiton website, the number of sessions(6) hit 320 million by end June
2021. Marmiton's successful positioning was recently recognised with the award
of the Harris Interactive "Label of Excellence". The number of sessions on the
Doctissimo website was 178 million. Both sites were confirmed as market leaders
in their special-interest category.

(4) TV viewing figures from Médiamétrie.
(5) Women aged under 50 purchasing decision-makers.
(6) "Sessions" represent the number of individual sessions initiated by all
users of the website.

- Revenue for the Media segment reached EUR983.4 million, a rise of EUR198.4
  million (+25.3%).

- Media segment advertising revenue for the first half of 2021 was up 30.5% at
  EUR802.4 million, helped by a favourable prior-year comparative reflecting
  the economic impact of the lockdown from March to May 2020. Some sectors
  such as leisure, arts and apparel, where advertising spend had previously
  been in decline, actually increased their spend relative to the second
  quarter of 2019.
  Digital advertising revenue amounted to EUR63.1 million, up EUR10.4 million
  on the first half of 2020, driven mainly by MyTF1. Advertising revenue from
  the Group's websites (Marmiton, Doctissimo) was marginally lower than in the
  first half of 2020.
- Revenue from other Media segment activities advanced by EUR11.0 million
  year-on- year, lifted by a recovery in advertiser services (Ykone, Gamned)
  and strong momentum in subscription box sales (including My Little Paris).
  Despite a tough prior- year comparative, interactivity revenue held steady
  year-on-year thanks to the screening of the Euro 2020 football tournament.

- The TF1 group's cost of programmes reached EUR466.4 million, an increase of
  31.2% on the 2020 first-half figure of EUR355.4 million. April and May 2020
  were marked by substantial cost savings on programmes, designed to absorb the
  erosion of advertising revenue. During 2021, a controlled ramp-up of
  programme spend - so we can broadcast a rich and diverse range of all-new
  content - has enabled us to meet the expectations of our advertisers.

- The Media segment reported a current operating profit of EUR147.4 million, a
  year-on-year rise of EUR76.6 million, generating current operating margin of
  15.0% (up 6.0 points year-on- year).

Newen Studios(7)

The Newen Studios group, which has operations in seven countries, produces and
distributes content across several genres such as drama, unscripted shows,
cartoons, documentaries, TV movies, and feature films.

- The Newen Studios segment posted revenue of EUR145.3 million for the first
  half of 2021, up EUR46.9 million year-on-year.

Operating results during the first six months were boosted by a catch-up
effect, with some productions scheduled for 2020 (especially in Canada and
Belgium) having been postponed due to the Covid-19 crisis. Shooting is now
proceeding normally for our studio teams, subject to strict compliance with
barrier measures.

(7) For the first half, the divested operations of TF1 Games continue to be
presented within the Newen Studios segment.

Newen continues to expand internationally, as shown by the acquisition of a
majority stake in Spanish producer iZen (which is fully consolidated from June
2021). The Group has also struck major partnership deals with other industry
players such as A&E Networks, which has acquired a 35% stake in Newen's
Canadian subsidiary Reel One to accelerate growth in its operations(8). Overall
revenue at Newen Studios was up 47.6% year-on-year, with activities outside
France accounting for 40% of total revenue.

During the first half a number of productions for pure player platforms were
confirmed, such as Diamonds in the first quarter (a De Mensen production for
Netflix) and more recently Liaison, the first major French-language series to
be commissioned by Apple TV+ (co-produced by Newen subsidiaries Léonis
Productions and Ringside Studios). Orders from platforms represented 28% of the
total book of orders at end June 2021, compared with 7% a year earlier.
Overall, the book of orders stands at 1,500 hours.

Distribution activities are also buoyant, as witness the new series HPI - the
most successful drama series on TF1 for 15 years - which is being distributed
by Newen in a number of countries outside France.

- The Newen Studios segment reported a current operating profit of EUR21.7
  million, a marked upswing of EUR24.7 million from the EUR3.0 million loss
  posted in the first half of 2020. The segment's current operating margin was
  15.0%.

Financial position

Shareholders' equity attributable to the Group was EUR1,626.5 million as of 30
June 2021 out of a balance sheet total of EUR3,540.2 million.

Free cash flow (before changes in working capital requirements) amounted to
EUR165.7 million in the first half of 2021.

The TF1 group had net surplus cash of EUR34.3 million as of 30 June 2021 (net
debt of EUR46.8 million including lease obligations), compared with net debt of
EUR0.7 million at 31 December 2020 (net debt of EUR93.1 million including lease
obligations).

Extra-financial performance

During the first half of 2021, the TF1 group screened numerous programmes on
social issues, especially on issues around disability (such as the drama
Mention particulière 2). The Group also carried out an in-depth review of the
editorial line of its aufeminin website, to place greater emphasis on social
issues and inclusivity. On the production side, Newen Studios is piloting an
eco- production approach on a number of programmes (including Plus Belle la
Vie), and is working to develop a standard for measuring eco-friendly
production performance.

(8) See the press release issued on 25 June 2021 :
: https://groupe-tf1.fr/sites/default/files/communiques/press_release_newen_
ae_networks_june_24_2021.pdf

Over the first six months of the year, TF1 and LCI carried an impressive total
of 210 news stories on environmental issues.

The TF1 group was issued a C+ score by the ISS ESG rating agency, and given
"prime" status in the media sector.

Outlook

The guidance below assumes no further deterioration in the public health
situation.

The creation of the new Media segment will help the Group unlock new synergies
and strengthen its position across all content distribution channels. The
back-to-school period promises an ambitious line-up, accessible by both linear
and non-linear viewers, featuring strong programmes from all-new French drama
like Une affaire française and Il est Elle to new seasons of Danse avec les
Stars, The Voice, Mask Singer and  District  Z. This will confirm our central
role in the total video universe, delivering what advertisers want. Backed by a
scheduling strategy designed to conquer market share and a strong
know-your-customer ethos, our ad sales teams are primed to create even more
value for advertisers.

Newen Studios will pursue its objectives of growing revenue outside the French
market and increasing its book of orders with pure player platforms.

Given the incorporation of our Digital activities within the Media segment, we
are not reiterating the guidance announced in February 2021 for the current
operating margin of our Unify division. Buoyed by this reorganisation and its
high potential for synergies, and by the pick-up in production activities, the
TF1 group expects double-digit current operating margin from 2021, in line with
2019 levels.

Following a favourable opinion from employee representative bodies at the end
of June 2021, the Bouygues and RTL groups announced on 8 July that they had
signed agreements relating to the proposed merger between the TF1 and M6
groups.

Closing of the transaction remains subject to regulatory approvals from the
French competition authority (ADLC) and French broadcasting industry regulator
(CSA), who are now in a position to complete their analysis of the deal within
the time-frame initially set.

Our Financial Information Report for the first half of 2021 is available at
http://www.groupe-tf1.fr/en. A conference call on our first-half results is
scheduled for 09.30 CET on 28 July 2021. For details of how to connect go to
https://www.groupe-tf1.fr/en/investors/results-and-publications, and click on
?Access our results announcements for the current year?.

                                   TF1 GROUP
                       INVESTOR RELATIONS - comfi@tf1.fr
                   CORPORATE COMMUNICATIONS - mcarcabal@tf1.fr

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