• Forecast adjusted for full year 2017
  • Deconsolidation of Highlight Communications AG effective June 12, 2017
  • Pressure on earnings more than offset by non-recurring income from deconsolidation of Highlight Communications AG
  • No sale of Sport1 GmbH and Sport1 Media GmbH
  • Refinancing of EUR 65 million corporate bond expiring April 2018 to be finalized by year end
  • Special audit of circumstances surrounding Formula 1 settlement

In the first half of 2017 the earnings performance of Constantin Medien Group was characterized by the deconsolidation of Highlight Communications AG effective June 12, 2017. This led to non-cash, non-recurring income of EUR 37.3 million and consequently to a significantly improved EBIT, Group net profit for the period, and earnings attributable to shareholders.
  • Group sales in the first half of 2017 amounted to EUR 200.3 million (6M 2016: EUR 264.0 million). The 24.1 percent fall in sales is largely attributable to the Segment Film, due to lower income in Home Entertainment compared with the same period last year.
  • Profit from operations (EBIT) rose to EUR 43.3 million (6M 2016: EUR 11.0 million).
  • The Group net profit for the period improved by EUR 35.4 million to EUR 36.4 million (6M 2016: EUR 1.0 million). This included earnings attributable to shareholders of EUR 34.8 million (6M 2016: EUR -1.4 million).
  • In the absence of full consolidation, the investment of Highlight Communications AG is recognized as non-current other financial asset.
  • Since September 26, 2017, Constantin Medien AG can again freely dispose of 20.6 million Highlight Communications AG shares.

Segment development in first half of 2017
  • In the Segment Sports, sales in the first six months of 2017 remained the same year-on-year at EUR 75.6 million (6M 2016: EUR 75.6 million). For Germany's leading 360° sports platform SPORT1, the free-TV market share in the core target group of men aged 14 to 49 years remained unchanged in the first half year 2017 at a high level at 1.6 percent (6M 2016: 1.6 percent). Despite increasing, the access figures in online and mobile as well as video views remained below expectations. Marketer SPORT1 MEDIA was able to expand existing partnerships with advertisers and acquire new advertisers. Due to higher costs of materials and licenses (including for the UEFA Europa League), the segment result in the first half of 2017 fell to EUR 1.9 million (6M 2016: EUR 3.6 million).
  • In the Segment Film, sales reached EUR 100.3 million in the first six months of 2017 (6M 2016: EUR 161.4 million). This 37.9 percent sales decrease reflects the fact that the exceptionally high sales realized in the home entertainment area in the first half of 2016 could, as expected, no longer be achieved in the first half of 2017. The segment result deteriorated in the first half of 2017 to EUR -3.9 million (6M 2016: EUR -0.4 million).
  • The Segment Sports- and Event-Marketing showed the usual very solid development at a high level, thanks to the marketing success of TEAM.
  • In the Others division, the six-month operating result of the holding company Constantin Medien AG was EUR 35.6 million (6M 2016: EUR -4.0 million). This includes the profit from the deconsolidation of Highlight Communications AG in the amount of EUR 37.3 million.

Structured, competitive bidding process ended: No sale of SPORT1 and SPORT1 MEDIA
The Management Board of Constantin Medien AG - with Olaf Schröder (CEO) and Dr Matthias Kirschenhofer (Chief Officer Legal and Finance) - has today decided to end the structured, competitive bidding process regarding a possible sale of Sport1 GmbH and Sport1 Media GmbH with immediate effect. As the Constantin Medien Group concentrates on the Segment Sports, its focus lies particularly on the strategic and operative further development of the 360° sports platform SPORT1 and the production company PLAZAMEDIA.

Refinancing of corporate bond with improved terms by year end
As already announced on September 20, the Management Board is preparing to completely refinance the EUR 65 million corporate bond - maturing in April 2018 - with a renowned German financial institution and several investors. The Management Board expects to be able to finalize the refinancing at more favorable terms by the end of the year.

Special audit of circumstances surrounding Formula 1 settlement
On May 11, 2017, Constantin Medien AG signed a settlement agreement with the Bayerische Landesbank, from which Constantin Medien AG received proceeds of EUR 10,129 thousand. Of this, EUR 9,464 thousand net was transferred to KF 15 GmbH for the period from January 1, 2017 through August 31, 2017. The Supervisory Board of Constantin Medien AG decided on September 20, 2017 to form a special auditing committee regarding the audit of the circumstances surrounding the settlement in respect of Formula 1, in particular with regard to the role of KF 15 GmbH, the bodies of the Company and related parties.

Outlook
Due to the deconsolidation of Highlight Communications AG effective June 12, 2017, the sales as well as the earnings attributable to shareholders of the Highlight Communications group no longer apply from this date. The deconsolidation of Highlight Communications AG resulted in an unscheduled, non-cash, non-recurring income of EUR 37.3 million. An opposite effect was provided by unplanned costs, in particular for severance pay for former Board Members, special expenses for legal advice as well as for the upcoming special audits agreed by the Annual General Meeting and for the special audit on Formula 1. In the Segment Sports, the Management Board now expects a significant decline in sales year-on-year and a negative EBIT, due among other things to the latest indications on the development of the TV and digital advertising business of the SPORT1 platforms and on the business development in the PLAZAMEDIA group.

As a result of the deconsolidation of Highlight Communications AG and the below-target performance of the Segment Sports as well as the aforementioned unplanned costs, the Management Board is currently assuming Group sales of between EUR 250 million and EUR 280 million (previously between EUR 480 million and EUR 520 million). Taking into account the holding costs as well as the financial expenses and taxes, the Management Board expects in total a higher Group result attributable to shareholders of between EUR 7.0 million and EUR 10.0 million (previously between EUR 0.5 million and EUR 3.5 million). If the general meeting of Highlight Communications AG decides on a dividend, the Group result attributable to shareholders will increase by the dividend right of Constantin Medien AG if business performance remains the same.

Please find the results for the Constantin Medien Group at a glance in the attached Pdf document [Attachment].

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Constantin Medien AG published this content on 29 September 2017 and is solely responsible for the information contained herein.
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