Ad Rebound at German TV Group ProSiebenSat.1

Rainer Beaujean
© ProSiebenSat.1 Media SE

TV advertising revenues, which collapsed following the first coronavirus lockdown, recovered significantly in the third quarter.

In a rare bit of good news for the coronavirus-hit commercial television business, German TV giant ProSiebenSat.1 posted third-quarter figures Thursday that show ad revenue bouncing back.

Revenues at the group, which operates national commercial channels Pro7, Sat.1, Kabel 1, and Sixx, hit $1.08 billion (€921 million) for the three months from July – September 2020, down just 1 percent from the $1.09 billion (€926 million) the company earned over the same period last year, before the coronavirus pandemic.

Like most commercial television operations worldwide, ProSiebenSat.1 saw advertising revenues plunge in the second quarter amid strict anti-COVID-19 measures —including in Germany a semi-lockdown of commercial business and public activities. In the first nine months of the year, ProSiebenSat.1 saw external revenues fall 13 percent to $472 million (€402 million).

But when the restrictions ended this summer, Germany bounced back. And quickly. Economic output in the third quarter was up an impressive 8.2 percent, the biggest increase since the country's Federal Statistic Office began collecting quarterly growth data in 1970. It was a boost that lifted all boats, and the country's advertising market grew accordingly.

At ProSiebenSat.1, operating profits (EBIT) surged 79 percent to $134 million (€114 million). The company's core television broadcasting operation, Seven One Entertainment, earned $602 million (€513 million) in the third quarter of 2020, a 5 percent drop off last year's figures, while adjusted earnings before income tax, deductions, and amortization (EBIDTA) were down just 6 percent at $134 million (€114 million) at the division.

Covid-19 related restrictions continue to impact results at production division Red Arrow Studios, however, which booked external revenues of $195 million (€166 million) for the third quarter, a 7 percent year-on-year drop.

"We are very satisfied with our development in the third quarter," said ProSiebenSat.1 Chairman and CFO Rainer Beaujean. "We were now able to benefit from the economic recovery in the summer, following the difficult first half of the year, and have seen an upward trend in the advertising market."

ProSiebenSat.1 could have trouble keeping up the pace of its recovery, however. Germany has gone into a second, "light lockdown" in November, with shops still open but public entertainment venues, including cinemas, restaurants, clubs, and bars mostly shut.

Beaujean remains optimistic. If no further restrictions are announced and Germany comes out of its second shutdown as planned in December, ProSiebenSat.1 is forecasting group revenues of between $4.52 billion and $4.63 billion (€3.85 billion - €3.95 billion) and an adjusted EBITDA of between $704 million - $763 million (€600 million - $650 million) for the full year.