German ProSieben targets expansion into China and India

5 October 2011 23 h 46 min 8 comments

During a press meeting at the company’s headquarters on Tuesday 4 October, ProSiebenSat.1 (the second-largest broadcasting group in Europe, reaching more than 78 million TV households) announced its intention to invest in China and India.

According to Thomas Ebeling, CEO of the group: Television is the heart of ProSiebenSat.1. It gives us the strength to develop the company into a powerhouse for TV and digital entertainment. In our growth strategy which we present today, we have identified additional revenue potential of more than EUR 750 million by 2015. We want to take another major step forward and further consolidate our leading position as one of the most profitable media companies in Europe, partly by reducing its dependence on its home-market television business. We will utilize the attractive growth opportunities in the digital world and abroad and work hard to achieve further profitable growth.” .

According to its management, ProSiebenSat.1 which owns and operates commercial television stations and radio networks in Germany and across several northern and southeastern European countries “will target expansion into China and India”.

“Even though debt reductions could put ProSiebenSat.1 in a position to spend as much as EUR400 million on acquisitions, the company has no plans to spend that much money”, CFO Salzmann said. Of the EUR750 million additional revenue figure, the company sees a potential of at least EUR250 million in TV revenue from the German-speaking region and more than EUR150 million from its international TV segment. “In 2015, we expect to be generating nearly half of our revenue outside the traditional TV advertising market in Germany,” Ebeling said.

In the “Broadcasting International” pilar, ProSiebenSat.1 is mainly pushing for organic growth as well as evaluating opportunities in high-growth markets. Additional organic revenue opportunities in the international TV business are estimated at more than EUR 150 million, with the average annual growth rate (CAGR) set at an upper single digits level until 2015. To achieve this, the Group will be expanding existing activities as well as evaluating future growth markets. Thomas Ebeling commented, “We want to exploit our international opportunities more actively and more effectively than ever. We will also be focusing on attractive, dynamic growth markets. “

In the area of production and global sales of program content, the Group aims to grow by more than EUR 100 million, with a CAGR significantly above 20% until 2015.

We will systematically internationalize our strong content, develop collaboration with partners and consolidate our presence, particularly in the USA and dynamically growing markets“, stated the CEO on Capital Markets Day.

The Chinese presence of SevenOne International

ProSieben is already active in China through SevenOne International, the ProSiebenSat.1 Group’s programming sales company.

“Galileo”, the first-rate sciencetainment program that explains common, technical and scientific phenomena is shown by ProSieben since 1998 and is adapted in China, by Shanghai DocuTV.

“My Man Can” (produced by Redseven Entertainment) which follows four women gamble with their partners’ abilities is already a ”smash hit in China, airing prime-time on Jiang Su Satellite Channel. In fact, the game show was the most successful foreign entertainment adaption in China in 2010″, according to SevenOne.

ProSiebenSat.1 is controlled by private equity firms Kohlberg Kravis Roberts & Co. and Permira and had an operating margin of 30.4% on sales of EUR2.6 billion in 2010, excluding the sold Benelux assets.

SOURCES: Dow Jones, ProSiebenSat.1

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