ProSiebenSat.1 Group reported financial results for the fourth-quarter and full-year 2023. The company recorded a positive development in many areas of the portfolio at the end of the year and thus achieved its most recently specified targets for the year. The group’s revenues declined by 7% to EUR 3,852 million in, while adjusted EBITDA decreased as expected to EUR 578 million (previous year: EUR 678 million).
The market environment in the first half of 2023 in particular was characterized by uncertainty among consumers and the associated restraint in investment by the advertising industry. In the fourth quarter, however, the group's revenues increased again as expected. This reflects the slight growth in advertising revenues in the German-speaking region (Germany, Austria and Switzerland) and the high advertising demand for Joyn. The Group also recorded strong growth in the digital platform & commerce portfolio.
Bert Habets, Group CEO ProSiebenSat.1 Media SE, said: "Our strategy with Joyn at the center is now starting to pay off. This is also underlined by the positive development, especially in the fourth quarter of 2023. Our goal is to further increase usage and user base of Joyn with double-digit growth rates per year. We are firmly convinced that a free offering, centered on one platform, is the key to success. We are increasingly focusing on local and live content to strengthen our TV channels and scale Joyn by investing significantly more in this area in 2024. Exclusive content is the driver that will enable us to further improve the monetization of our reach – both in traditional TV and on our digital offerings. With our focus on Entertainment, we also evaluate opportunities to crystallize value from our non-core assets, depending on the market environment."
External revenues in the entertainment segment amounted to EUR 2,574 million in the financial year 2023, which corresponds to a decrease of 11% against 2022. The main reason for this is the 6% decline in advertising revenues in the German-speaking region. However, a positive trend emerged towards the end of the year: After the first two quarters of 2023 in particular were still characterized by the macroeconomic environment, advertising revenues in the German-speaking region increased again slightly year-on-year in the fourth quarter. The decline in TV advertising revenues slowed down significantly in the crucial fourth quarter. In addition, revenues in the digital & smart advertising business, which also include the sales of the streaming platform Joyn, grew dynamically in the Christmas period as well as for the full year. At the same time, advertising revenues in the audio business and in programmatic trade of advertising time increased. In total, digital & smart advertising revenues in the German-speaking region were up 10% compared to the previous year.
The streaming platform Joyn developed very positively as a result and recorded its strongest quarter to date in the fourth quarter of 2023. The number of monthly video users increased to 6.3 million (+30% compared to previous year quarter), viewing time to 8.8 billion minutes in total (+15% year-on-year). At the same time, AVoD revenues grew significantly by 37% in the fourth quarter of 2023.
External revenues in the commerce & ventures segment saw double-digit growth 13% in 2023 and amounted to EUR 844 million. Revenues were driven by the digital platform & commerce companies, in particular Verivox and flaconi: Verivox has benefited from the easing on the energy markets since the beginning of 2023 and has grown significantly since then. In addition, flaconi developed very positively, reflecting the high demand from consumers in the online beauty market.
External revenues in the dating & video segment decreased by 16% to EUR 434 million in 2023. On the one hand, this reflects the highly competitive market environment and the declining usage of video offerings in the U.S. On the other hand, the dating business was affected by legal changes: In 2022, the Fair Consumer Contracts Act came into force in Germany, which affected the subscription models of the Parship and ElitePartner platforms in particular and had a negative impact on the revenue development in 2023.
Looking forward to 2024, ProSiebenSat.1 Group aims to increase revenues to around EUR 3.95 billion compared to the financial year 2023 with a variance of plus/minus EUR 150 million. This depends in particular on the development of entertainment advertising revenues in the German-speaking region: With group revenues at the midpoint of the target range, ProSiebenSat.1 expects entertainment advertising revenues in the German-speaking region to grow by around 2%. While the TV advertising revenues included in this figure should remain stable, digital & smart advertising revenues are likely to continue their growth momentum.
The Group is focusing on strengthening profitability and a lean cost structure, which will have an increasingly positive impact on earnings performance and at the same time open up more headroom for investments – especially in local programming content. In order to strengthen the market share in linear TV and the growth of Joyn, ProSiebenSat.1 Group explained that it will focus even more clearly on exclusive local content and increase its programming expenses by around EUR 80 million in 2024. The Group’s total programming costs will thus amount to around EUR 1.03 billion in 2024.
Martin Mildner, Group CFO of ProSiebenSat.1 Media SE, concluded: "After a successful year-end performance, we have made a good start to the new financial year. We have set an important course for growth again in 2023. Even though the macroeconomic environment remains challenging, we expect advertising revenues in the German-speaking region to develop positively in 2024. At the same time, we want to further strengthen ProSiebenSat.1’s profitability this year and invest EUR 80 million more in local content. To this end, we will consistently continue our cash and cost management. A solid financial basis is the prerequisite for our growth."