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ProSiebenSat.1 provides update as ad revenues in DACH take turn for the worst

German media giant ProSiebenSat.1 Group has provided a market update in response to worsening market conditions. Although its Q3 results are not due until November 15, the company warned that “persistently high inflation, the energy price crisis and the resulting reluctance to consume are impacting growth prospects”.

Ralf Peter Gierig

In its update, the company said it has generated revenues of around €2.93bn in the first nine months of the year 2022, down around 2%. For Q3, it said business development “was particularly influenced by the macroeconomic environment in the region of Germany, Austria and Switzerland. The entertainment segment’s external revenues declined organically by around 9% in the third quarter. In particular, the advertising business, which is important for ProSiebenSat.1 Group, deteriorated significantly compared to the previous year, with entertainment advertising revenues in the region of Germany, Austria and Switzerland decreasing by around 10%.”

Traditionally, the fourth quarter is the most important quarter of the year for ProSiebenSat.1 in terms of full-year revenues and contribution to earnings. Currently, the fourth quarter of 2022 “shows signs of a more pronounced weakened macroeconomic environment than initially reflected in the latest full-year outlook. Against this backdrop, ProSiebenSat.1 is updating its financial targets for the financial year 2022. The Group now expects revenues of around €4.15 billion and adjusted EBITDA around EUR 650 million for the full-year. ProSiebenSat.1 assumes the Group’s advertising revenues in Germany, Austria and Switzerland will be down around €130 million or around 17% year-on-year in the fourth quarter.”

Ralf Peter Gierig, member of the executive board & group CFO of ProSiebenSat.1 Media, said: “Sustained inflation and energy price concerns are burdening consumer behavior in Germany, Austria and Switzerland. As an early-cyclical company, ProSiebenSat.1 is directly affected, which, against the backdrop of the currently high uncertainties, is reflected in a more cautious than expected booking behavior of our advertising customers. However, as soon as the economic environment develops more positively again, we will also be one of the first to benefit.” The financial markets reacted to the news by knocking 5% off the group’s share price in early trading.

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