Constantin Medien: Business figures in the third quarter 2017 substantially lower than the same quarter last year and significantly below budget

• Deconsolidation of Highlight Communications AG as of June 12, 2017 has a full impact for the first time in the third quarter
• Sales in the Segment Sports fell sharply year-on-year, in particular as a result of non-compensation for the discontinued production framework agreement with Sky, as PLAZAMEDIA's new customer business, announced in 2016, remains well below target
• The digital business of SPORT1 also continued to be significantly below expectations, as in the first half-year
• Operating profit (EBIT) impacted by operating effects and also by extraordinary charges from the past
• New Management Board initiates measures after examination of business activities

Constantin Medien AG's business figures are considerably lower than in the prior year's quarter and are also behind target in the third quarter 2017. On one hand, this is due to the deconsolidation of Highlight Communications AG as of June 12, 2017, which had a full impact for the first time in the third quarter. On the other hand, this was also due to the drastic drop in the Segment Sports, which was particularly caused by the non-compensation from the production framework agreement not renewed with Sky and expired as of June 30, 2017 after a term of 18 years, as the new customer business of PLAZAMEDIA announced in 2016 continues to be severely below budget. Also, the digital business of SPORT1 continues, as in the first half-year, to be significantly behind expectations. Already since the summer of 2017, both areas have shown significant deviations from the budgeted sales and operating profit (EBIT) targets for 2017. The new Management Board, with Olaf Schröder as CEO and Dr. Matthias Kirschenhofer as Chief Officer Legal and Finance, has already initiated measures after having examined the Group's business activities with the aim of again creating a solid basis for the successful further development of the sports companies of the Constantin Medien Group.

Group key figures for Q3 2017

• Group sales amounted to EUR 25.1 million following EUR 101.7 million in the same quarter last year. The 75 percent drop reflects, on the one hand, the deconsolidation of Highlight Communications AG effective June 12, 2017. From this date on, as already announced, the sales and earnings attributable to shareholders of the Highlight Communications Group with the Segment Film and the Segment Sports and Event-Marketing are no longer attributable to the Constantin Medien Group.
• On the other hand, the sales from the Sports Segment in the third quarter 2017 considerably fell by 29.7 percent to EUR 25.1 million compared to EUR 35.7 million in the same period the year before. After PLAZAMEDIA's production framework agreement with Sky expired at the end of June 2017 after a term of 18 years, the new customer business of PLAZAMEDIA was also behind expectations in the third quarter 2017 and could not compensate the loss of its largest customer, Sky, as announced in 2016. Moreover, the digital business sales of SPORT1 continued, as in the first half-year, to be significantly below expectations in the quarter under review.
• The profit from operations (EBIT) dropped to EUR -6.3 million in the third quarter 2017 compared to EUR 6.6 million in the prior year's quarter. Besides the loss of earnings due to the deconsolidation of Highlight Communications AG and the lower sales in the Segment Sports, this loss was also due to extraordinary charges for severance payments to former Board Members, expenses for corrections of earlier undertakings and projects as well as legal consultancy costs.
• The result from the Segment Sports fell to EUR -2.7 million due to the aforementioned considerable below-budget development compared to EUR 2.2 million in the third quarter 2016.
• The earnings attributable to shareholders stood at EUR -11.9 million in the third quarter versus EUR 1.2 million in the same period last year. This includes a loss of EUR 3.2 million from the settlement of 8 million Highlight Communications shares with the loan from Stella Finanz AG. The already published agenda of the Annual General Meeting of Highlight Communications AG on December 1, 2017, provides for the resolution of a dividend of CHF 0.30 per Highlight Communications AG share. Should the Annual General Meeting approve the proposed resolution, Constantin Medien AG is also entitled to this dividend for the 8 million Highlight Communications AG shares settled. This would largely offset the loss of EUR 3.2 million.

Measures of the new Management Board following examination of business activities
After the Management Board of Constantin Medien AG has already decided at the end of September to end the bidding process regarding a possible sale of SPORT1 and SPORT1 MEDIA, which caused a great deal of market uncertainty in the months before, the Management Board has launched additional measures after it had critically examined the business activities of the individual companies in the Segment Sports:

• New structures in the TV and Digital areas of SPORT1
  Once the digital business of SPORT1 with regard to coverages and sales had already fallen behind expectations as well in the first half-year, necessary structural and personnel adjustments were made in the TV and Digital areas - with the objective of further optimizing cross-media content and capitalization of the content offers. Moreover, the attractive rights portfolio of the leading 360° sports platform in the German-speaking region was further expanded in the long term, among others, with the extension of the ADAC cooperation until 2020 and a three-year exclusive partnership with Team Sauerland, which comprises of at least 20 boxing events per year with a total of about 100 fights.
• Business operations of the agency LEITMOTIF will be focused on consulting area from 2018 onwards
  The business operations of the agency LEITMOTIF, which was founded in mid-2015, will be focused from 2018 on the consulting area, which started in February 2017. The creative area will be discontinued from next year after a critical review due to non-fulfillment of sales and earnings expectations and insufficient revenue prospects.

Olaf Schröder, CEO of Constantin Medien AG: 'Together with my Board colleague, Dr. Matthias Kirschenhofer, and following the Annual General Meeting on August 23, 2017, we have intensively analyzed Constantin Medien AG and its subsidiaries, identified the risk positions and evaluated them. The initiated and currently ongoing measures aim to again create a solid basis for the successful strategic and operative further development of the companies in the Segment Sports.'

Outlook for the business year 2017
The Management Board of Constantin Medien AG raises its forecast for the net income attributable to shareholders in the financial year 2017, which is now expected to range from EUR 15 million to EUR 18 million (previously: EUR 7 million to EUR 10 million) at unchanged exchange rates.

The reason for the increase in the forecast is the expectation of the Management Board that the majority of the shareholders of Highlight Communications AG will follow the proposal of the Board of Directors at the Annual General Meeting on December 1, 2017, and decide on a dividend of CHF 0.30 per share. The Management Board passed today the relevant resolution for the 20.6 million Highlight Communications AG shares owned by Constantin Medien. If the Annual General Meeting decides to approve the dividend proposal, then Constantin Medien AG is also entitled to this dividend for the 8 million Highlight Communications AG shares settled with the loan from Stella Finanz AG.

The Management Board has maintained the previous forecast for Group sales 2017 of Constantin Medien AG of between EUR 250 million and EUR 280 million.

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