TF1 (EPA:TFI) - Press release Capital Markets Day TF1 group

Transparency directive : regulatory news

18/09/2018 08:05

PRESS RELEASE

                                                 Boulogne, 18 September 2018

               TF1 GROUP CAPITAL MARKETS DAY: "TOMORROW IS OURS"

  The TF1 group reiterates its guidance and shares its ambitions for its new
businesses The group is forecasting improved return on capital employed three
                            years from now(1)

TF1 is hosting a Capital Markets Day to showcase its vision of the Group for
the years ahead as it continues with its transformation, and the prospects for
value creation. The purpose of the day is to share the ambitions and strategic
thinking in each of the Group's key businesses: broadcasting, production,
content distribution, and online services.

The TF1 group provides a unique offer of free and paid-for content and
services, addressing the various ways in which consumers use content.

Television is still the most-consumed of all media in France, averaging 3 hours
and 44 minutes a day(2). It remains the leading platform for consumption of
video content(3): 91% of video viewing time on any type of screen is spent
watching TV programmes. For 15-24-year-olds, the figure is nearly 70%,
demonstrating their strong appetite for TV content. Although linear consumption
still accounts for the majority of TV screen time, delinearised consumption is
on a sharp uptrend.

In an increasingly competitive landscape, the TF1 group's channels are more
than ever the go-to option, as witness the 47 million French people who watch
them every week. This reach is testimony to the Group's ability to deliver
high-quality content to a very broad audience at the right time by adapting to
changing behaviours and trends.

This status as a content distribution powerhouse illustrates the central role
played by the TF1 group and its airtime sales house in creating instant brand
value for advertisers, and is enhanced by the use of technology and data.

In addition to monetising its attraction power with advertisers, the TF1 group
has changed its core business model via the MYTF1 replay platform and soon
through the Salto OTT platform. Furthermore, by monetising its content and
add-on services through telecom operators, the renewed business model will
deliver an additional revenue stream.

The TF1 group is also transforming itself by accelerating fast into new growth
territories, production and digital, that are already creating value.

Newen, a major multi-genre producer with a diversified customer base.

Since it was acquired by the TF1 group in 2016, Newen - France's leading
independent producer - has expanded and diversified its customer base, drawing
on a rich pool of independent producers and talents to build acknowledged
expertise in all genres (from drama to animation) and budgets (from
multi-million to low-cost).

The Newen group has a reputation for excellence across the board, from writing
through production to distribution, and intends to capitalise on this expertise
to expand its footprint in Europe.

Newen is a profitable and growing production house, aiming to produce over 300
hours of drama in 2019 and to increase volumes over the next three years, after
two years of strong growth(4).

(1) ROCE = (Current Operating Profit - theoretical tax + profit of
joint-ventures and associates) for fiscal year N / average of the capital
employed for fiscal years N-1 and N; capital employed = total shareholders
'equity including non-controlling interests + net debt end of fiscal year. 2017
ROCE was 8.9%.
(2) Source: Médiamétrie - H1 2018 data. Individuals aged 4 & over
(3) Source: Médiamétrie 2017 - Estimate based on the following panels:
Médiamat 2017, Global TV April-June 2017, Médiamétrie Netratings.
(4) Including volumes produced for the TF1 group.

Setting up a new digital business enables the TF1 group to provide a
complementary offer based on web- sourced content for internet users, and to
strengthen its offer towards advertisers.

The acquisition of the aufeminin group(5) has led to the build-up of a digital
entity consisting of high-profile brands (aufeminin, Marmiton, My Little Paris,
Livingly Media, MinuteBuzz, Studio71, Beauté Test, etc) centred on strong
universal interests (wellness, lifestyle, food, beauty, parenting, etc) and
targeted communities.

Thanks to the unique proprietary technology developed by Livingly Media, the
TF1 group has access to a digital inventory marketing tool that optimises
campaign performance and a solid track record in the American market. The
ability to build engaged communities around strong brands, and to understand
and gain insights on those communities, will guarantee the ability for the
Group to deliver a B2C social e-commerce offer combined with expert support for
advertisers in disintermediated mode.

The ambition of the digital entity is to continue growing revenue, with an
objective of around EUR250 million in three years' time and an EBITDA margin of
at least 15% by the end of that period.

Alongside the organic growth of these two divisions, the Group is announcing
that an investment budget in the region of EUR50 million a year over three
years will be dedicated to acquisitions.

With these moves into digital and production, the TF1 group is reducing its
dependency on the French TV advertising market, by developing businesses that
offer not only better visibility with longer economic cycles, but also greater
flexibility thanks to a more variable cost base. The TF1 group is reiterating
its ambition to deliver growth in revenue from activities other than
advertising on the five free-to-air channels, with those other activities
expected to account for at least one-third of consolidated revenue in 2019.

The Group is also reiterating its guidance of growth in the current operating
margin rate (excluding major sporting events) from 2018, and a double-digit
current operating margin rate in 2019).

The overall effect of these various growth levers will be an improved return on
capital employed(6) for the TF1 group three years from now.

            The presentation is available on our corporate website:
                         http://www.groupe-tf1.fr/en.
       For details of how to connect to the Investor Day webcast, go to:
       https://www.groupe-tf1.fr/en/investors/results-and-publications/
                      financial-results-and-publications

                                   TF1 GROUP
                 INVESTOR RELATIONS DEPARTMENT - comfi@tf1.fr
                              TWITTER @groupetf1

(5) 95.26% equity interest held as of today; announcement on 7 September 2018
of the intention to launch a simplified cash tender offer followed by a
squeeze-out.
(6) ROCE = (Current Operating Profit - theoretical tax + profit of
joint-ventures and associates) for fiscal year N / average of the capital
employed for fiscal years N-1 and N; capital employed = total shareholders
'equity including non-controlling interests + net debt end of fiscal year. 2017
ROCE was 8.9%.

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