RTL Forecasts Unchanged Earnings, Sales Amid Europe Rebound

RTL Group SA fell the most in six weeks as Europe’s biggest broadcaster forecast that sales and earnings won’t grow this year, even as the region’s economies continue to recover.

Revenue and earnings before interest, taxes and amortization in 2014 will be “broadly stable,” the company said in a statement today. Sales last year fell 1.8 percent to 5.89 billion euros, missing the average analyst estimate of 5.94 billion euros in a Bloomberg survey, while Ebita rose 6.9 percent to 1.15 billion euros.

RTL is struggling amid Europe’s bumpy recovery from the longest recession since introducing a single currency. While operating profit rose in Germany and the Netherlands, it fell in France, the company said. Luxembourg-based RTL’s forecast of little changed earnings and sales at constant exchange rates contrasts with the outlook of German rival ProSiebenSat.1 Media AG (PSM), which sees rising revenue and profit this year on the back of an improving ad market.

“We expect a low dynamic in sales and earnings development in the mid-term due to upcoming pressure on the margin in the advertising-financed Free-TV business,” Harald Heider, an analyst at DZ Bank AG who has a sell rating on the stock, said in a note to clients.

Liberum Capital analysts Ian Whittaker and Lisa Hau called RTL’s forecast of stable revenue and Ebita “conservative.”

RTL shares fell as much as 3.4 percent, the steepest intraday decline since Jan. 24, and were trading 3.1 percent lower to 92.05 euros as of 14:03 p.m. in Brussels, giving the broadcaster a market value of 14.3 billion euros.

German Share

The company’s market share in Germany, where operating profit rose 7.1 percent to 622 million euros, fell to 30.6 percent last year from 31.3 percent, narrowing its lead over ProSiebenSat.1, which maintained its share at 25.2 percent, RTL said.

The German operations were also more profitable as the budget to promote sports events shrunk as Ukrainian heavyweight champion and UDAR Party leader Vitali Klitschko spent more time in Kiev than in the boxing ring, co-Chief Executive Officer Anke Schaeferkordt said. The company broadcast just two major boxing events last year, compared with five a year earlier, she said.

The company, which has interests in 55 television channels and 27 radio stations, is currently reviewing a “bolt-on acquisition” in the U.S. for its FremantleMedia content unit, co-CEO Guillaume de Posch said, adding that the group’s forecast excluded the effects from potential acquisitions.

The company plans dividends totaling 7 euros per share, down from the 10.50 euros paid for 2012.

To contact the reporter on this story: Richard Weiss in Frankfurt at rweiss5@bloomberg.net

To contact the editor responsible for this story: Benedikt Kammel at bkammel@bloomberg.net

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