Fremantle Owner Downgrades 2023 Financials Following Half-Year Profit Tumble

RTL Group, the owner of American Idol outfit Fremantle, has downgraded its full-year financial expectations following a tricky six months during which group profit tumbled by more than 50%, although Fremantle revenues grew slightly.

Delivering its half-year results this morning, RTL cited “challenging TV advertising markets in particular in Germany” leading to group revenue dipping by 5.1% to €3.1B ($3.4B) and group profit falling by 56.6% to €132M. Adjusted EBITDA fell by almost exactly 50% to €250M and basic and diluted Earnings Per Share were down by 70%.

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Bertelsmann-owned RTL, which owns Fremantle, streamers RTL+ and Videoland, linear channels acrosss Europe and publishing assets, has therefore downgraded its full-year revenue targets from the €7.3B-to-€7.4B mark to around €7B, which would mean a small loss rather than minor gain as originally forecast. Adjusted EBITDA targets have dropped from the €1B-to-€1.05B mark to circa-€950M, which would again mean a small loss on the prior year.

The downgrades are reflective of a wider TV and film market being impacted by global macroeconomic shocks along with the strife in the U.S. Big European players such as Germany’s ProSiebenSat.1 and Scandinavia’s Viaplay have recently implemented big layoffs. The former’s second-quarter earnings nosedived in figures published earlier this week.

RTL is keeping its lofty target for Fremantle to hit €3B revenues by 2025 and the super-indie would have been pleased to grow turnover slightly across the half year to top the €1B mark, although adjusted EBITDA fell by the far bigger 40% to €36M. Fremantle turnover for the first quarter of this year slid 5% amidst a wider RTL tumble of almost 10%.

Although things have slowed down in 2023, Fremantle was highly acquisitive during 2021 and 2022 and the RTL results today confirmed the continued strategy of “investing in Fremantle – both organically and via acquisitions – in all territories across entertainment, drama and film, and factual shows and documentaries.”

Deadline analysis earlier this year found that Fremantle had splurged around €250M across two years on companies including Normal People maker Element Pictures and Devils indie Lux Vide. The company has also struck talent deals with the likes of All Quiet on the Western Front auteur Edward Berger.

RTL CEO Thoms Rabe said today’s results were “broadly in line with expectations.”

“We are convinced that investing through the cycle will put us in a strong competitive position when the advertising markets recover,” he added.

“The market environment in the first half of 2023 was particularly challenging, with geopolitical and macroeconomic uncertainties in addition to the long-term structural shifts in video viewing. The RTL Group team remains focused on bringing our strategy to life: strengthening our core business, growing our streaming and content businesses, and building alliances and partnerships.”

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