Constantin Medien AG: 2017 business development characterized by non-recurring effects - Way is paved for focus on sports business

PRESS RELEASE
 

Constantin Medien: 2017 business development characterized by non-recurring effects - Way is paved for focus on sports business
 

- Group sales of EUR 263.8 million within target forecast range of EUR 250 million to EUR 280 million
 

- Profit from operations (EBIT) of EUR 36.7 million in particular due to non-recurring, non-cash deconsolidation gain

- Earnings attributable to shareholders of EUR 27.8 million significantly above the last forecast from November 2017

- Going concern of Constantin Medien AG secured

Ismaning, March 26, 2018 - 2017 was a decisive year for the Constantin Medien Group marked by non-recurring effects. The measures introduced by the new Management Board from September onward led to positive development in the fourth quarter in the operative business.

The loss of control of Highlight Communications AG resulted in the deconsolidation of the Highlight Communications group, effective June 12, 2017. The Group's profit and loss statement therefore contains the segments Film as well as Sports- and Event-Marketing only up to this date, so naturally the year as a whole cannot be meaningfully compared with the previous year.
 

Key figures of the Group 2017

- Group sales fell by 53.4 percent to EUR 263.8 million (2016: EUR 565.7 million); well within the target forecast range of EUR 250 million to EUR 280 million.

- Profit from operations (EBIT) at EUR 36.7 million was only slightly below the previous year's figure (2016: EUR 39.5 million) due to the non-recurring, non-cash effects particularly because of the deconsolidation, namely that profit contributions not appearing in the previous year were more or less offset by non-recurring income of EUR 38.3 million from the deconsolidation of Highlight Communications AG.

- The financial result improved considerably by EUR 13.6 million to EUR -5.3 million (2016: EUR -18.9 million).

- The Group net result amounted to EUR 28.8 million, compared with EUR 14.4 million in the previous year. Earnings attributable to shareholders of Constantin Medien AG of EUR 27.8 million were significantly above the adjusted expectations (2016: EUR 8.3 million).
 

Financial position of the Group as of December 31, 2017
The equity ratio (total equity relative to balance sheet total) was 35.9 percent as of December 31, 2017, compared with 20.9 percent a year earlier. The increased equity ratio is primarily due to the sharp decline in the balance sheet total by 62.7 percent. A partial debt relief came into effect already on December 31, 2017, due to the offsetting of financial liabilities with Highlight Communications shares.
 

Events after the Balance Sheet Date
Full repayment of the EUR 65 million 7.0% corporate bond 2013/2018 due to mature on April 23, 2018 was guaranteed on March 22, 2018, when the Management Board sold 12,417,482 Highlight Communications AG shares to Highlight Event and Entertainment AG at a price of EUR 5.20 per share. The interest incurred for the 2017/2018 period totalling about EUR 4.55 million will be paid from existing liquidity. The Group has thus repaid all of its financial liabilities and is completely debt-free. The financial result will also considerably improve when taking into account the elimination of future dividends due to the sale of the Highlight Communications AG shares.

Due to the conclusion of the aforementioned agreement with Highlight Event and Entertainment AG, the going concern of Constantin Medien AG is secured. The external auditor has issued an unqualified audit opinion und the substantial liquidity risks mentioned in the 2016 Annual Report have been reduced considerably.

Olaf G. Schröder, CEO of Constantin Medien AG: "With our combined efforts in the last few months of the past financial year, we managed to secure the going concern of the Constantin Medien Group and to get our corporation back on course for operative growth. Within a few months we cleared away the stumbling blocks and successfully resumed our strategy for a sports-focused enterprise. We secured our Group financing, reduced finance costs, ended costly legal disputes, streamlined the Group, and cleared its debts. But all these positive results don't hide the fact that we still have a long way to go. We spent too long following a zigzag strategy. As far as the financial figures are concerned, the asymmetric year-on-year comparison at Group level caused by the deconsolidation of the Highlight group will account for lower sales in the first half of 2018. But that should not distort the fact that we are working successfully in our core business areas in sports."
 

Performance of the Segment Sports
Sales in the Segment Sports amounted to EUR 139.1 million, 13.4 percent down on the previous year. After the framework production agreement between PLAZAMEDIA and Sky had expired at the end of June 2017, the new customer business of PLAZAMEDIA was behind expectations and could not compensate that loss. In its core target group, SPORT1's market share remained almost the same year-on-year. But it saw a positive ratings development for, amongst others, the Bundesliga talk show "Der CHECK24 Doppelpass", with an average of 1.01 million viewers during the first half of the 2017/2018 soccer season - a new record since the format began in 1995. Other ratings highlights in 2017 included the UEFA Europa League, the World Darts Championship with new record audiences and the thrilling Ice Hockey World Championship 2017.

Outlook for the 2018 financial year
For 2018, Constantin Medien AG is expecting significantly lower sales at the Group level than in previous years due to the year-round deconsolidation of Highlight Communications AG. Based on current estimates and the operational development of the sports companies, the Management Board of Constantin Medien AG is presently assuming Group sales of EUR 110 million to EUR 130 million for the 2018 financial year. Taking into account the holding costs as well as the financial result and taxes, the Management Board expects a Group result attributable to shareholders of EUR -1.5 million to EUR -4.5 million.

The Constantin Medien Group at a glance

Group results according to IFRS

The full consolidated accounts of Constantin Medien AG for the 2017 financial year are available on the company's website (www.constantin-medien.de).

Contact:
Contact PR:
Constantin Medien AG, Michael Röhrig, Phone: +49 (0) 89 - 99 500 461, Fax: +49 (0) 89 - 99 500 466, email: michael.roehrig@constantin-medien.de

Contact IR:
Constantin Medien AG, Stéphane Winzenried, Phone: +49 (0)89 - 99 500 803, Fax: +49 (0)89 - 99 500 371, email: ir@constantin-medien.de

Constantin Medien AG, Münchener Straße 101g, 85737 Ismaning, Phone: +49 (0)89 - 99 500 0, Fax: +49 (0)89 - 99 500 111