ProSiebenSat.1 looks to Joyn-led future as ad sales plummet in Q1

Germany’s ProSiebenSat.1 saw its entertainment revenues fall by 20% in the first quarter, with a big drop in the German advertising market and the sale of the US production arm of Red Arrow Studios hitting its top line.

ProSiebenSat.1’s entertainment business turned in sale of €527 million for the quarter, down from €663 million for the prior year.

Excluding the Red Arrow impact, sales were down 14%, hit by a 12% drop in German ad revenues and the ongoing impact of the Russo-Ukrainian war.

Overall group revenues fell by 13% to €816 million for the quarter, with an uptick of 17% in commerce and ventures partially offsetting the decline in ad sales.

Adjusted EBITDA also tumbled, dropping from €112 million to €53 million, hit by an outsize impact from the declining high-margin ad business.

The full consolidation of streaming operation Joyn, formerly a JV with Warner Bros. Discovery, as of October 31, 2022, resulted in a negative earnings effect in the amount of €14 million.

ProSiebenSat.1 says it still expects full year revenues of around €4.1 billion, give or take €150 million, and adjusted EBITDA of €600 million, give or take €50 million.

ProSiebenSat.1 continues to highlight its strategy of putting newly consolidated Joyn at the center of its entertainment strategy, while at the same time focusing on cost-efficiency, profitability and cashflow.

“As expected, the macroeconomic environment continued to directly impact our advertising business in the first quarter of 2023. This is expected to continue in the second quarter, although somewhat less pronounced. We are already seeing significant improvements in advertising bookings in June compared to the previous months. Therefore, we currently expect adjusted EBITDA in the second quarter to be in the mid to high double-digit million euro range. At the same time, we expect a significant recovery of our very profitable advertising business in the second half of the year, in parallel with the forecast economic upturn,” said CEO Bert Habets.

“In 2023, we are laying the foundation for profitable growth in the long-term. We are thus focusing clearly on cost efficiency and making targeted investments in the areas that are strategically important to us in order to make our offerings even more attractive, especially digitally. In this context, the focus is on Joyn. With the launch of our streaming platform in Austria, we have shown that a joint platform of private and public content is possible. We are also working intensively on this in Germany. Ultimately, it’s about giving viewers the best possible offer, directly addressing their needs and habits.”