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ProSiebenSat.1 sees strong recovery as ad market and e-commerce deliver

German broadcaster ProSiebenSat.1 saw a strong recovery in the third quarter, with revenues almost on par with 2019 thanks to a recovery in the ad market and a strong showing from online beauty and dating properties.

The group posted revenues of €921 million, down from €926 million in 2019, with EBITDA up 13% to €149 million.

ProSiebenSat.1 said the strong showing reflected a recovery in the German advertising market from July, a solid showing from online beauty provider Flaconi and a positive impact from the acquisition of US online dating outfit The Meet Group.

The broadcaster is continuing to invest in e-commerce activities in some areas while realising value by selling off in others. It plans to bring The Meet Group and matchmaking business Parship Group together in a new ‘fourth segment’ to complement its existing business lines under the ParshipMeet Group banner.

Core TV entertainment unit SevenOne Entertainment saw a year-on-year revenue decline of only 5%, down to €499 million, compared with a 34% drop in Q2.

Production arm Red Arrow on the other hand continued to suffer from the impact of COVID-19 on production in the US in particular, with revenues down 7% adjusted for currency movements.

Ecommerce rode to the rescue to some extent for ProSiebenSat.1, with NuCom Group sales rising by 1% to €172 million.

ProSiebenSat.1’s doubling down on its strategy of combining a focus on its core German-speaking markets in entertainment with ecommerce and realising value from disposals where that makes sense won praise from analysts at Berenberg.

“With a more positive tone given the consensus-beating numbers for Q3, management reiterated its strategic goals. We do not view these as materially different from previous management, in that the goal has always been to leverage unsold advertising inventory via the marketing of businesses in which the company had either a strategic or financial interest (whether in the form of equity or revenue share). New management has essentially tightened the focus of the group via the sale of assets the ownership of which no longer makes sense for ProSiebenSat.1. Thus far, the proceeds from Windstar and MyLoc have surprised to the upside,” the analysts said.

Berenberg cautioned that the current resurgence of COVID-19 and restrictions could have a negative impact, and noted that a less deep fall than anticipated this year could also mean a less steep recovery in 2021.