Q3Quarterly Report 2006

Transcription

Q3
Quarterly Report 2006
Forward-looking statements
This quarterly report contains statements relating to future events that are
based on management’s assessments of future developments. A series of
factors beyond the control of the company, such as changes in the general
economic and business environment and the incidence of individual risks or
occurrence of uncertain events, can result in the actual results differing substantially from those forecast. EM.TV does not intend to continually update
the forward-looking statements contained in the quarterly report.
Important notice
In case of any differences the German version of the quarterly report prevails.
Content
2 Key Figures
3 Third Quarter Highlights
4 Business Units Reports I Sports
9 Business Units Reports I Entertainment
12 The EM.TV AG Share
14 Economic Developments
19 Prospects and Outlook
20 Consolidated Financial Statements
29 Finance Calendar
29 Production Credits
Key Figures
In Euro million
Non-current assets
> Intangible assets
Total assets
Subscribed capital
Equity
Equity ratio (in percent)
Long-term financial liabilities
Short-term financial liabilities
30/9/2006
181.1
86.4
372.6
70.9
179.4
48.1%
105.1
0.0
31/12/2005
178.9
89.8
316.2
66.6
153.6
48.6%
64.5
5.6
Sales
> Sports
> Entertainment
> Others
Earnings before interest, taxes, depreciation and amortization (EBITDA)
Depreciation and amortization
Earnings before interest and taxes (EBIT)
Earnings before taxes (EBT)
Shareholders’ interests
1/1 to
30/9/2006
179.4
156.5
22.8
0.2
20.4
-13.6
6.8
-2.4
0.2
1/1 to
30/9/2005
146.5
128.1
17.3
1.1
8.8
-11.2
-2.4
-6.4
-4.5
40.0
-26.3
64.5
-3.9
67.3
-114.6
60.6
3.20
193.9
58.1
0.00
52.5
5.13
269.5
51.0
-0.09
804
630
Cash flow from operational activities
Cash flow from investment activities
Cash flow from financing activities
Outstanding shares in million
Share price in Euro
Market capitalization (based on outstanding shares)
Average number of outstanding shares (undiluted) in million
Earnings per share (undiluted) in Euro
Employees (average for the period)
2
Third Quarter Highlights
Significant increase in earnings after nine months
EBITDA more than doubled at Euro 20.4 million after nine months
Group sales after three quarters plus 22 percent
Positive earnings after taxes in the third quarter and after nine months
Dynamic development maintained in the Sports segment
Group objectives reinforced for the whole of 2006
3
Business Units Reports I Sports
Sports
TV I DSF Deutsches SportFernsehen
Within the television sector, a slight increase in gross advertising investment has been evident in the first nine months
of 2006 against the same period of the previous year. Due
to the concentration of advertising spending in the months
prior to and during the 2006 FIFA World Cup™, the market
as a whole was marked by stagnation during the third quarter 2006. However, it is expected that the advertising market will show slight growth for the remainder of the year.
During the third quarter, advertising income at DSF was
therefore, in line with expectations, slightly lower than for
the same period the previous year. Advertising partners
booked space with DSF in advance of the 2006 FIFA World
Cup™, with advertising budgets being focused solely on the
“World Cup broadcasters” during the 2006 FIFA World Cup™
itself. In contrast, income from the T-commerce showed
strong growth, with an increase of around 15 percent
against the third quarter of the previous year. Overall turnover at DSF rose during the reporting period by around nine
percent.
Important contract extensions and expansion of customer portfolio
Around the German Soccer League, DSF succeeded in extending its co-operations with important big-name partners
such as Deutsche Telekom, Krombacher, Suzuki, Hasseröder
and Württembergische Versicherung. This is a clear indication of the high acceptance of the individual formats, as
well as the associated confidence in DSF.
In addition, further big-name advertising customers were
also won during the reporting period. For the first time,
Brillux booked extensive special advertising formats across
a range of sectors, while customers such as Jack Link’s
Germany and Hannover’sche Leben came on board for the
first time with classic advertising. With the new “screenshot” format, DSF’s long-standing partnership with Arcor
was expanded into a new sector.
4
Strong competition from 2006 FIFA World Cup™ and a
restrained start for Bundesliga formats
During the third quarter 2006, DSF reported a market share
of 0.9 percent among viewers overall and 1.8 percent in the
core target group of males aged 14 to 49. For the same
period the previous year, market share stood at 1.2 percent
for viewers overall and 2.1 percent for the core target group.
This somewhat lower market share against the same period
the previous year is due on the one hand to strong competition during the 2006 FIFA World Cup™. During the World Cup
month of July, DSF reported a market share of only 0.6 percent among viewers overall (third quarter 2005 – 0.9 percent).
As well as the competition posed by the World Cup in July,
a restrained start for the Soccer League formats also contributed to the lower market share. The later start times of
Bundesliga – Der Sonntag (10.00pm in the 06/07 season
against 7.00pm in the 05/06 season) and Hattrick – Die
2. Bundesliga am Sonntag (7.30pm instead of 5.30pm) had,
as forecast, an impact on several areas including market
share performance during August and September. The lower
market shares resulting from the later start times for broadcast on free-TV as defined in the DSF request for tender are,
however, compensated by lower associated rights costs.
Success with first class in-house soccer formats
Despite the lower ratings returned by the aforementioned
formats, DSF continued to achieve strong results with its
other soccer formats. With top ratings averaging 1.3 million
viewers, the Second League live match remained on the
same level as the previous year. In addition to this were
first class in-house formats such as DSF-Doppelpass, which
enjoyed significant growth during the months of August and
September. It returned an improvement against the third
quarter 2005 from an average of 600,000 viewers to
680,000, equating to an increase of 13 percent.
New formats on DSF: Bundesliga – Die Spieltaganalyse
and “Champions TV”
On September 14, DSF aired the first show in an all-new –
and within a short time highly successful – format, Bundesliga – Die Spieltaganalyse. With average ratings of up to
410,000 viewers and a market share of up to 3.6 percent
among the 14-49 year old male target group, the show has
been compulsive viewing from the very beginning. The mix
of clear, understandable analysis and expert opinion is unique within German free-TV.
The reporting period saw the launch of another new format
on DSF under the brand “Champions TV”. The three-hour
program produced by Premiere reports live from the Champion’s League on every match day – either Tuesdays or
Wednesdays – starting at 8.00pm. Very good ratings have
been reported by “Champions TV” on DSF right from the
start. The second match day on September 27 brought an
average of 4.2 million viewers and a peak rating of 5.5 million for the encounter between Werder Bremen and FC Barcelona live on DSF. The market share stood at an excellent
14.6 percent for viewers overall and at 20.3 percent for the
target group of males aged 14 to 49.
DSF presented further soccer highlights during the third
quarter with the UEFA Cup and European Cup qualifying
matches played by the German U21 squad.
Strong coverage with Wimbledon final
Program highlights from the non-soccer sector came in par-
ticular from the Basketball World Championships in Japan
and tennis (Wimbledon, Stuttgart Weissenhof and the Davis
Cup). In particular, DSF achieved healthy ratings during the
third quarter with the live transmission of the Wimbledon
Men’s Final, with a peak of up to 670,000 viewers.
During the reporting period, DSF secured the live rights to
all matches played by the German Davis Cup team for the
next three years (2007 through 2009). For the same period,
DSF also acquired the live broadcast rights to the final of
the Davis Cup. In so doing, DSF succeeded in expanding its
extensive sports portfolio with a further attractive product.
Next year will therefore once again see DSF showing the
prestigious team event in tennis alongside the top event
from Wimbledon.
Poker boom on DSF
With the broadcast of first-class poker tournaments starting
in March 2005, DSF set a trend that has since established
itself as a successful program product. During the third quarter 2006, the poker program run on DSF was once more
significantly expanded to a total of 178 hours. During the
same period 2005, DSF had only 14 hours of poker in its
line-up. In addition to the expansion of its poker run, DSF
succeeded in securing extensive advertising contracts with
the three key online platforms, PokerStars.de, free.888.com
and lastly during the third quarter with PartyPoker.net. These
contracts, which extend into the 2007 business year, will
make significant contributions to the financial results for
the 2006 and 2007 business years.
Online I Sport1
Third quarter report 2006
During the third quarter 2006, Germany’s largest sports
portal Sport1.de succeeded in continuing the positive trend
set in recent months. The third quarter 2006 was characte-
rized largely by successful marketing of the German Soccer
League, as well as by new co-operations. Once again, Sport1
made a strong positive contribution to the EM.TV Group’s
financial result.
5
New ratings record in September 2006
Sport1.de reported further growth in user ratings during the
third quarter 2006, achieving almost 66 million visits and
507 million page impressions, equating to an increase in
visits of over 37 percent in comparison with the third quarter
2005. In September, Sport1 achieved a new ratings record
with over 23.8 million visits and 212 million page impressions, attributable largely to the enormous popularity of the
Bundesliga pages.
Successful marketing
The third quarter was characterized in particular by successful marketing of the German Soccer League. Arena is presenting the 2006/2007 Soccer League season on sport1.de
and was therefore able to occupy one of sport’s most popular topics on the top-rating soccer channel on sport1.de.
Alongside a header featured on all Soccer League pages,
this exclusive presentation package includes the integration
of arena within the Sport1 live ticker and the live results
box. Furthermore, the reporting period also saw Sport1 win
Erdinger, Lufthansa and Kyocera as additional partners for
the 2006/2007 Soccer League season. Through partnerships with these big-name customers, Sport1 succeeded in
significantly exceeding its ambitious marketing targets.
Portfolio expansion
The Sport1 strategy to pursue areas outside its core business with external partners made positive progress. Within
the travel sector, a partnership was secured with tui and
berge&meer, while a co-operation for a music channel was
agreed with Napster. Within the reporting period, the new
sailing channel also went online in co-operation with
T-Systems.
Renewed confirmation of Sport1 as mobile partner
Sport1 has been reconfirmed as producer for the Soccer
League’s mobile business. This means that, for the 2006/
2007 season, it is producing Soccer League MMS for T-Online for the third time in succession. In addition, since the
start of the 2006/2007 Soccer League season, Sport1 has
also been providing the multimedia content for “Handy-TV”
on behalf of T-Mobile.
Production I PLAZAMEDIA
Immediately following the final rounds of the 2006 FIFA
World Cup Germany™ and the final on July 9 in Berlin, which
PLAZAMEDIA produced on behalf of Host Broadcast Services AG for an audience of billions, the attention of the
production market turned to the new season of the DFL
Deutsche Fußball Liga GmbH. It began on August 11, 2006
with a new production service provider Sportcast GmbH. As
a 100 percent subsidiary of DFL Deutsche Fussball Liga
GmbH, Sportcast is providing the base signal for all stadium
matches.
The broadcasting of the German Soccer League is bringing
with it an increasing demand for new technical production
standards such as IPTV (Internet Protocol Television) and
mobile TV.
6
Healthy financial performance – successful start to
2006/2007 German Soccer League season
From both an operational and economic perspective, PLAZAMEDIA successfully concluded its activities on the 2006
FIFA World Cup™ and made a good start into the new German Soccer League season. The company is working on
behalf of the new rights holders and TV partners, and is
realizing productions for the classic television distribution
channels (free-TV and pay-TV), as well as for IPTV, internet
and mobile TV, all of which went successfully on air. PLAZAMEDIA is equally well positioned within the signal management sector.
The third quarter of 2006 was very positive for PLAZAMEDIA.
Against the same period the previous year, the company
achieved increases in both sales and earnings, including revenue from the 2006 FIFA World Cup™, which concluded in
the third quarter with sales of a mid seven-digit number. The
subsidiary Creation Club (CC) GmbH also reported a strong
performance in sales and earnings for the reporting period.
Broadcast center with state-of-the-art production technology
Expansion of production facilities at the AGROB media park
was completed within the reporting period, including work
on the television technology infrastructure. This expansion
activity encompassed the broadcast infrastructure for studio production on behalf of German Soccer League pay-TV
rights holder arena, which also entered service with stateof-the-art technology. For its new customer, PLAZAMEDIA is
providing production technology management and implementation for German Soccer League products, including
the conference channel. In addition, the reporting period
also saw PLAZAMEDIA manage all productions for DSF.
PLAZAMEDIA plays in first league with IPTV and mobile TV
Also in the third quarter, PLAZAMEDIA handled broadcasting of the conference channel and live matches for IPTV
program “Bundesliga auf Premiere powered by T-Com”,
which is distributed via the IPTV platform of T-Home. Furthermore, the New Media business unit produced near-live products for Deutsche Telekom and match highlights for cell
phones (T-Mobile) and internet (T-Online), as well as two live
channels for T-Mobile that air via UMTS. Together with sister
company Sport1, PLAZAMEDIA also provided mobile sports
channel “Bundesliga-Show” on behalf of T-Mobile.
PLAZAMEDIA expands international business
On behalf of the Deutscher Hockey Bund (DHB; German
Hockey Association), PLAZAMEDIA’s activities included the
provision of the world feed (base signal for global distribution) for all matches played in the 2006 BDO Men’s Hockey
World Championship. It also produced the UEFA U19 European Cup (Men’s in Poland and Women’s in Switzerland)
for Eurosport, and was responsible for host broadcasting
the ATP Mercedes Cup on behalf of DSF. In addition, PLAZAMEDIA is providing the world feed under contract to Premiere
for all UEFA Champions League matches played on German
soil. Also for the UEFA Champions League, PLAZAMEDIA is
producing the classic conference channel with up to eight
live matches, alongside the “Champions TV” format, the
brand used by Premiere to present the UEFA Champions
League on DSF.
New series productions at PLAZAMEDIA studios
Within the reporting period, the Studio Production business
unit successfully secured new serial productions. These included the realization on behalf of Premiere of studio format
“Alle Spiele, alle Tore”, as well as highlight channel “Euroliga
Konferenz”, with conference switching between top matches
from the key European soccer leagues.
Innovative production technology – world first presented
at IBC
Together with partner company TV SKYLINE GmbH, PLAZAMEDIA presented an innovation at this year’s International
Broadcast Convention (IBC) in Amsterdam. The world’s smallest camera True RemoteCam HD1100 is particularly suitable
for use at sporting events. Following the successful presentation of the innovative “Camera Moving Systems” at the IBC,
PLAZAMEDIA produced material using a “SpeedCam” from
the IAAF Golden Grand Prix international athletics meeting
in Shanghai, under contract to Chinese public television CCTV.
Subsidiaries develop third-party business
PLAZAMEDIA’s 100 percent subsidiary Creation Club realized the German Soccer League-On-Air start campaign for
arena. The creative team redesigned the entire corporate
identity of Canal+ in Sweden, Norway, Denmark and Finland
on behalf of the SBS Broadcasting Group. Under contract
to 3Sat, the Creation Club produced “A Night in Berlin” as a
free-TV format with well-known jazz musician Till Brönner.
PLAZAMEDIA Austria is producing all qualifying matches from
the UEFA Champion’s League and the UEFA Cup featuring
Austrian teams for Premiere Austria, as well as continuing
its production of the base signal for the T-Mobile Bundesliga
and the Red Zac Erste Liga.
7
Licensing I Exclusive European merchandising rights to the 2006 FIFA World Cup™
Successful marketing of merchandising rights to the
2006 FIFA World Cup™
Following the end of the 2006 FIFA World Cup™ on July 9,
the documentation and closure phase began during the last
quarter. In relation to the sales success of individual licensees, EM.TV received commission income during the reporting period at a lower seven-digit number. This was the result
of sales made by licensees over and above the minimum
guaranteed sums paid in advance, leading to the incurrence
of additional license fees.
Thus, the marketing of merchandising rights to the 2006
FIFA World Cup™ was able to make an important contribution to the financial performance of the Sports division during
the reporting period.
Management changes within the Sports companies
Operational strengthening of the DSF management team
In July 2006, DSF Programming Director Oliver Reichert
was appointed to the position of Managing Director for Programming for the broadcaster, which saw him take on overall re-sponsibility for the editorial office in addition to his
previous duties as head of Programming and Production.
Oliver Reichert (35) has been with DSF since August 2001.
He took over program management in December, 2002.
Between 1995 and 2001 he held a number of positions for
several, mainly private, TV stations and magazine formats
such as “Die Reporter” and “Focus TV”. Between 1991 and
1995 he worked for production company teletime, prior to
which, he was a freelance journalist for a number of television institutions.
This operational strengthening of the DSF management
team has enabled DSF Chairman of the Management
8
Board Rainer Hüther, in his role as COO Sports at EM.TV
AG, to focus on driving forward the strategic positioning of
the group’s sports division, comprising DSF, PLAZAMEDIA
and Sport1. Managing Director Thomas Deissenberger continues as his dep-uty on the Management Board of DSF.
Management change at Sport1
In July 2006 also Patrick Zeilhofer (40) took over management of Sport1 GmbH, thus succeeding provisional Managing Directors Manuel Lopez and Jan Schwark.
As Chief Creative Officer (CCO) at RTL Interactive GmbH,
Patrick Zeilhofer’s most recent management responsibilities
included Programming, Marketing and Press. As Editor-inChief, recent years saw him develop RTL’s highly successful
new media content, including internet portals RTL.de,
wetter.de, gzsz.de and sport.de, not to mention an array of
mobile and digital content.
Business Units Reports I Entertainment
Entertainment
Production
Although the international advertising market has been
showing the first signs of an upturn during the first nine
months of 2006, budgets for new productions in the market for children’s and youth entertainment have not been
raised, and remained somewhat depressed. Key market
trends during the third quarter included ongoing increases
in the exploitation of formats via channels such as videoon-demand and mobile, as well as the development of productions based on new technical standards such as HDTV
(High Definition Television).
The reporting period saw EM.Entertainment continue to work
on 2D animation science-fiction/comedy series Dogstar,
which is the company’s first co-production in HD format. By
the end of September, 12 half-hour episodes of the series
had been produced.
In addition, by the end of the quarter, a total of five episodes had been produced of action/comedy series Staines
Down Drains, a co-production with Flux Animation and Flying
Bark Productions Pty Ltd. (previously Yoram Gross-EM.TV
Pty Ltd.), a 100 percent subsidiary of EM.Entertainment
GmbH. The completion of a total of 26 half-hour episodes
is scheduled for March, 2007. Furthermore, the end of
September also saw Flying Bark Productions finish work on
the first 25 episodes of 2D series Dive Ollie Dive (52 x 11’).
Bark Productions pushed forward with its development work
in the interactive sector via its multimedia unit Forest Interactive during the reporting period. Forest Interactive conceived new content in the form of images, sound and video
clips for MobiStax™, a mobile communications platform for
trading cards, and entered into negotiations with potential
Australian and international partners regarding possible cooperations around this mobile application.
Within the various genres, it was edutainment programs
that continued to dominate among pre-school children.
These programs are orientated towards ever younger and
more specific target groups and also incorporate interactive
elements. EM.Entertainment is responding to these developments principally with 3D and live action series CROCO
LOCO. The first episode of this series, which uses fun and
entertainment to encourage children to learn foreign
languages, were completed in September.
EM.Entertainment is currently working on a total of around
ten development and six co-production projects, the content of which covers the entire program spectrum for the
three to 13 age group. This portfolio of programs takes
account of current trends in animation technology and
includes productions for pre-school children such as 3D
adventure series Zigby, as well as formats for older target
groups like 3D animated fantasy/adventure series Enyo.
Alongside the production of entertainment programs, Flying
TV Sales
Media company interest in productions that, alongside conventional exploitation channels such as free and pay-TV,
are also suitable for distribution platforms in the video-ondemand or mobile sectors remained high during the third
quarter. Programs from the EM.Entertainment rights library
found particular popularity among TV stations within the
core European market. This demand was defined not least
by the program requirements of new digital broadcasters.
9
Business Units Reports I Entertainment
The appeal of formats from the company’s rights portfolio
within the important Anglo-Saxon market was demonstrated by the sale of a program package comprising 420 half
hours to British media company Chart Show Channels Ltd.
for Great Britain, Northern Ireland and Ireland. The three
year contract encompasses non-exclusive free-TV broadcast
rights to programs such as Tabaluga, Flipper & Lopaka,
Blinky Bill and The Rainbow Fish.
The international popularity of educational content remained during the reporting period. Greek public broadcaster
ERT acquired a program package comprising 155 half
hours for exploitation in free-TV, including both seasons
(totaling 52 episodes) of edutainment series Marvi Hammer
presents NATIOANAL GEOGRAPHIC WORLD, with Polish
state broadcaster TVP likewise securing the free-TV rights
to both seasons of the format.
Furthermore, EM.Entertainment went on to secure a contract with Minter TV Productions in the Ukraine spanning
272 half hours of children’s and youth programming for
free-TV station TET. Meanwhile, Slovenian state television
acquired the free-TV rights to a total of five fairy tale feature films as well as further programs, while the Polish children’s channel belonging to Channel+ Cyfrowy, MiniMini,
purchased 26 half-hour episodes of the Pippi Longstocking
animation series.
Licensing I Merchandising
During the third quarter, activities at EM.Entertainment continued to focus on the 30th TV anniversary of Maya the Bee.
Overall, the Maya the Bee Roadshow, managed by EM.Entertainment with the support of a host of licensees and promotion partners such as Nürnberger Versicherung and Europa
Park Rust, attracted over one million visitors on more than
30 event days in 19 German cities. Business also benefited
from the popularity of Maya the Bee in terms of product
licenses. Full World Merchandising GmbH extended its contract as exclusive supplier of promotional items to insurance
firm Nürnberger Versicherung until June 30, 2008.
Ahead of next year’s 10-year TV anniversary of Tabaluga,
the third quarter saw EM.Entertainment win numerous
licensees for the marketing of licensed products in Germany,
Austria and Switzerland. In early September, Heunec acquired exclusive rights in the plush toys sector for a period of
three years.
Alongside Maya the Bee and Tabaluga, the licensing sector
demonstrated sustained interest in other classics from the
10
EM.Entertainment rights portfolio: EMME, one of the biggest multimedia publishers in France, extended its contract
for The Rainbow Fish in the CD-ROM and Game Boy category for distribution in Germany, Austria, Switzerland and
various other European countries until the end of 2010. In
July, EM.Entertainment granted a license to Hong Kong
based company Lillylin Ltd. for the marketing of selected
home textiles and household goods featuring Heidi over a
period of two years in Germany, Austria and Switzerland.
In addition, Ravensburger AG secured license rights to puzzle games featuring subjects such as Maya the Bee, Vicky
the Viking and Pinocchio for the Austrian, Swiss and Slovenian markets. In Italy, Panini S.p.A. acquired two licenses
for the marketing of collector albums and images featuring
Heidi and Maya the Bee from Planeta Junior S.L., in which
EM.Entertainment has a 33.3 percent shareholding.
Licensing I Home Entertainment
The Home Entertainment division of EM.Entertainment GmbH
encompasses the exploitation of video and DVD rights, as
well as video-on-demand rights. The video-on-demand distribution channel offers further interesting growth potential
for the exploitation of classics from the company’s rights portfolio. Children’s and youth programs from the rights library
and, in particular, program classics, met with strong demand
during the third quarter, especially within Europe and Asia.
In Italy, MONDO TV secured rights to the first 26 episodes
of Tabaluga for exploitation on DVD and VHS. In addition,
media house Media Licensing acquired home entertainment rights for a period of four years to Blinky Bill’s Christmas Special, Emil in Loenneberga and Nils Holgersson for
the Benelux countries.
In the Chinese and Taiwanese market, EM.Entertainment
secured an agreement via distribution company WELL GO 6
for the exploitation of DVD and VHS rights, among others,
to feature films Pippi Longstocking, Lapitch the Little
Shoemaker and Blinky Bill’s Christmas special.
TV I Junior Channel
Junior.TV GmbH & Co. KG manages the children and family
oriented pay-TV channel Junior. In Germany, Junior is available
exclusively via pay-TV provider Premiere. The channel is available on individual subscription, and as part of the individual
packages “PREMIERE KINDER” and “PREMIERE THEMA” as
well as the all-inclusive packages “5er-Kombi” and “7erKombi”.
make-and-do show for children aged between five and 11,
which began airing in July on the Junior Channel, marking a
premiere for the channel and for German pay-TV. The Junior
Channel got into swing for the summer during the third
quarter with a school vacation program of well-known Astrid
Lindgren feature films every weekend. On September 9th
Junior celebrated the 30th TV anniversary of Maya the Bee
with a showing of the homonymous animation feature film.
Third quarter program highlights included Finger Tips, the
Management changes within the Entertainment division
Patrick Elmendorff, who, alongside Susanne Schosser, was
joint Managing Director for EM.TV subsidiaries EM.Entertainment GmbH and Junior.TV GmbH & Co. KG, will leave
the EM.TV group on December 31, 2006.
Following the departure of Patrick Elmendorff, in her role as
Managing Director, Susanne Schosser will take over responsibility for those functions previously managed by Mr Elmendorff – Worldwide TV Sales and the entire Merchandising
and Home Entertainment business. These duties are in
addition to her current responsibilities in charge of Production, Program Purchasing and National Sales. Consequently,
the organizational structure of EM.Entertainment is also
being reworked, with a new management team being successively built up in order to maximize further the advantages of integrating the Production and Sales functions.
Production/Broadcasting, Marketing, Distribution/Mobile
and Business Affairs functions will be established. Overall
responsibility for the Production/Broadcasting unit will be
taken over by Dominique Christina Neudecker, who is currently Production Manager. The position of Business Affairs
Manager has been awarded to Dr. Martin Stopper, who has
been with EM.Entertainment since October 1. His responsibilities include Legal Affairs, License Management, Controlling and Media Co-ordination.
11
The EM.TV AG Share
The EM.TV AG Share
Development of the EM.TV Share
With a dailly average trading volume of 250,000 shares,
the share price fell from Euro 3.82 in the middle of July to
the current 52-week low of Euro 2.72 on August 25. This
downward price movement was accompanied by the controversal political discussion on sports betting as well as
the agreement between Premiere and Arena on the transmission of Premier Soccer League in Pay-TV. After a sideways movement until the middle of September the EM.TV
AG’s share continually increased and closed at Euro 3.20
on September 29. Since the beginning of the year (Euro
4.33), EM.TV’s share has fallen by approximately 26 percent
(Euro -1.13), thereby developed much below to the SDAX
(+16 percent) and the Prime Media Index (+4.5 percent).
Approximately 15.0 million shares were traded in the third
quarter of 2006, with this being equivalent to an average
trading volume of 230,000 per day. In comparison with the
second quarter, the trading volume therefore receded by a
third quarter, by a half. The EM.TV share is still the most
traded share in the SDAX nonetheless. The EM.TV share
was listed at Euro 3.78 on November 20, 2006.
Shareholder structure as of June 30, 2006
Distribution of subscribed capital
Constant
Ventures B.V.
8.0%
Erwin Conradi
7.4%
Treasury shares
14.6%
Free Float
70.1%
Distribution of voting rights
9.4%
Constant
Ventures B.V.
8.6%
Erwin Conradi
82.0%
Free Float
On November 16, 2006 the Company was informed by Highlight Communication AG that 13 percent of the subscribed
capital (14.9 percent of the voting capital), based on an
option agreement with Constant Ventures and further own
share holdings are to be assigned with Highlight Communications from December 1, 2006.
Xetra closing prices of the EM.TV share in comparison with SDAX and Prime Media
Comparative indices indexed to the EM.TV closing price on December 31, 2005
EM.TV AG
SDAX
Prime Media
77
66
55
44
33
22
11
00
31/12/05
12
31/03/06
30/06/06
30/09/06
Subscribed capital of EM.TV AG
The subscribed capital of EM.TV AG amounted to approximately Euro 70.9 million on September 30, 2006, divided
into an identical number of shares. Therein approximately
1 million shares relating to exercised options from the bond
with warrants attached, registered in the Commercial Register in September, 2006, together with new shares from
conversions of the 5.25% convertible bond 2006/2013 not
yet registered in the Commercial Register, are contained.
EM.TV AG held approximately 10.3 million of own non-voting
shares, which leads to approximately 60.6 million shares
were in circulation on September 30, 2006. Approximately
7.7 million of EM.TV’s own shares are reserved for servicing
the certificates Series 2. The remaining own shares (appro-
ximately 2.6 million) are available to the Company with no
specific prior commitment.
Issues of derivatives by EM.TV AG
There were no significant exercises of the Series 2 certificate
in the third quarter of 2006, nor or conversions of the new
5.25% convertible bond 2006/2013.
Investor Relations
The aim of Investor Relations activities is to ensure a transparent presentation of the perspectives and potentials of
EM.TV in a consistently changing media landscape. For this
purpose, we provide ongoing information for investors and
analysts on our homepage www.em.tv in the Investor Relations section.
Information on the EM.TV share as of September 30, 2006
ISIN
> Ordinary share
Segment
Indices
Bloomberg/Reuters
Share price
52-week high/52-week low
Subscribed capital (incl. shares from exercised warrants and conversions)
Shares outstanding
Potential shares from derivatives outstanding
> Certificates Series 2 (strike price EUR 3.50 until April 18, 2008)
> Convertible bond of 2006/2013 (conversion price EUR 5.85 until April 2013)
> Employee participation programs
Market capitalization (based on shares outstanding)
Market evaluation for certificates Series 2 outstanding
DE 000 9147207
Prime Standard, Regulated Market
SDAX, Prime Media Index
EV4 GR/EV4GDE
EUR 3.20
EUR 5.38/EUR 2.72
EUR 70.9 million
60.6 million shares
7.7 million shares
15.0 million shares
0.3 million shares
EUR 193.9 million
EUR
7.7 million
Shares and stock options held by the Management and the Supervisory Board as of September 30, 2006
Managemant Board
Supervisory Board
Werner E. Klatten
Rainer Hüther
Dr. Andreas Pres
Dr. Bernd Thiemann
Hans-Holger Albrecht
Arthur Bastings
Number of shares
33,000
10,000
40,000
0
0
0
Shares from
Stock Options
27,397
27,397
27,396
0
0
0
13
Economic Developments
Changes in the Consolidation Group
Creation Club (CC) GmbH, which was acquired in full through
the EM.TV subsidiary PLAZAMEDIA on December 31, 2005,
was included in the profit and loss account of the consolidated financial statements with effect from January 1, 2006.
On the strength of a contract concluded on January 11,
2006, the EM.TV subsidiary EM.Entertainment GmbH
acquired the outstanding 50 percent shares in the former
Yoram Gross-EM.TV PTY Ltd., which has been operating
under the name of Flying Bark Productions Pty. Ltd. since
October 2006. The production company which was previously consolidated on pro rata basis has been included in
the consolidated financial statements by means of a full
consolidation as from the aforesaid date.
With the contract of May 31, 2006, the EM.TV subsidiary
Sport1 GmbH sold its 100 percent holding in Sport1 Multimedia GmbH, Vienna, Austria. In line with International Financial Reporting Standards (IFRS), the assets and liabilities
included the Group financials have been deconsolidated.
With effect from July 1, 2006, Flying Bark Productions Pty.
Ltd. increased its holding in Trackdown Digital Pty. Ltd. by
9.922 percent to the present 51.587 percent. The purchase
price amounted to Euro 131,000 and was effected by the
relinquishment of a receivable equivalent to the same
amount. As from the aforesaid date, the Company will be
included in the consolidated financial statements by means
of a full consolidation (previously consolidated at equity).
General, Accounting and Valuation Principles
According to the Prime Standard Regulations of the German Stock Exchange, quarterly financial statements have
to be issued in accordance with international accounting
regulations – IFRS or US-GAAP. EM.TV AG is preparing its
consolidated financial statements in accordance with International Financial Reporting Standards (IFRS).
In the enclosed financial statements at September 30,
2006, there were no changes in accounting and valuation
principles in comparison with the annual financial statements of EM.TV AG at December 31, 2005.
The business operations of the EM.TV Group are divided
into the “Sports” Segment (basically DSF, the PLAZAMEDIA
Group including Creation Club and Sport1 as well as the
Merchandising and Marketing Rights to the 2006 FIFA
World Cup™) and the “Entertainment” Segment (basically
EM.Entertainment, Junior.TV GmbH & Co. KG and Junior
Produktions GmbH and Flying Bark Productions Pty. Ltd.).
In addition, there is the “Others” Segment which includes
the income and expenses of EM.TV AG as the holding company for the Group
Sales and Earnings Situation
In the third quarter of 2006 – a seasonally weaker period –
the EM.TV Group achieved a significant increase in sales
and earnings in comparison with the third quarter of the previous year. Because of the development of operating results
in the first nine months the Board reinforces the sales and
earnings objectives notified for the whole of 2006.
14
Group sales amounted to Euro 179.4 million in the first
three quarters of 2006 compared with Euro 146.5 million
in the same period of the previous year. This was equivalent
to a growth rate of 22.5 percent. Adjusted by the initial fullconsolidation of Creation Club (CC) GmbH and the Australian
production company Flying Bark Productions Pty. Ltd., the
growth rate in the first nine months was equivalent to 11.1
percent.
At Euro 57.5 million (+24.7 percent), sales in the third quarter were also significantly higher in comparison with the
same quarter of the previous year (Euro 46.1 million). This
quarterly increase was mainly attributable to a sustained
business upturn in the Sports segment which had already
commenced in the second quarter.
The sales split between the individual segments has not
changed: as in the previous year, approximately 87 percent
of Group sales were attributable to the Sport segment in
the first nine months of 2006. The Entertainment segment
accounted for 13 percent of Group sales.
Other operating income amounted to Euro 15.2 million in the
first nine months, thereby showing an increase of 20.5 percent in comparison with the previous year’s period (Euro
12.6 million). This item is made up of a large number of various individual factors with none of them predominating
over the others.
Cost of materials, the main expense item in the Group, rose
by 13.6 percent from Euro 81.8 million to Euro 92.9 million
and was therefore lower than the corresponding growth rate,
amongst other things on account of the improved cost structure in the Sports companies. In the third quarter, the cost
of materials was almost constant with the corresponding
period of the previous year. At 44.1 million (2005: Euro
37.2 million), personnel expenses rose by 18.5 percent in
the nine month period, with this reflecting the increase in
the number of employees attributable to the larger consolidation group.
Other operating expenses increased by 20.4 percent to
Euro 38.3 million in the first nine months of 2006 (2005:
Euro 31.8 million). After six months the increase had been
41.1 percent, inter alia on account of the higher advertising
and travelling expenses in connection with the 2006 FIFA
World Cup™. At Euro 10.5 million, other operating expenses
in the third quarter were 13.2 percent lower than the equivalent amount in the comparable quarter in 2005.
Group earnings before interest, taxes, depreciation and
amortization (EBITDA) amounted to Euro 20.4 million in the
first nine months and were more than double the equivalent
amount in the previous year therefore (Euro 8.8 million). In
the third quarter, there was a significant improvement from
Euro -3.5 million to Euro 6.5 million in comparison with the
same quarter of the previous year. It should, however, be
noted that earnings in the previous year’s quarter were negatively affected by the one-off effects with DSF.
After depreciation and amortization of Euro 13.6 million
(+21.4 percent in comparison with the equivalent amount
of Euro 11.2 million in the previous year), Group earnings
before interest and taxes (EBIT) amounted to Euro 6.8 million
in the nine-month period compared with Euro -2.4 million in
the same period in 2005. The third quarter closed with a
positive EBIT of Euro 1.8 million compared with Euro -7.4 million in the previous year.
The negative balance of Euro 2.0 million incurred in the
first nine months in income from investments in associated
companies is mainly attributable to the complete writedown of the minority holding in arena media GmbH (operator of the previous Mega\Vision auction channel, formerly
arena) made in the first quarter of the year.
At Euro -7.2 million, financial result from January to September 2006 was significantly lower than the equivalent
amount in 2005 (Euro -3.9 million). Euro 3.1 million thereof
was attributable to a one-off special accounting charge in
connection with the premature repayment of the 8% bond
with warrants attached of 2004/2009 at the end of the
second quarter. The additional interest on the 5.25% convertible bond 2006/2013 issued in May (with a volume of
15
Euro 87.75 million) also had an influential effect. Financial
result in the third quarter amounted to Euro -1.4 million
(compared with the third quarter of 2005: Euro -1.0 million).
The EM.TV Group achieved earnings before taxes (EBT) of
Euro -2.4 million compared with Euro -6.4 million in the corresponding period of the previous year. At Euro 0.3 million,
earnings before taxes were slightly positive in the third quarter (third quarter of 2005: Euro -8.5 million).
The Group shows a tax credit of Euro 2.5 million in the first
three quarters (nine months of 2005: a tax credit of Euro
2.7 million) which was mainly attributable to the capitalization of deferred taxes. There was a tax charge of Euro 0.3
million in the third quarter (prior year’s quarter: a tax credit
of Euro 3.9 million).
After taxes and minority interests, positive earnings of Euro
0.2 million were achieved in the first nine months compared
with Euro -4.5 million in the same period of the previous
year. This was equivalent to undiluted earnings per share of
Euro 0.00 (based on an average share circulation of 58.07
million). In the same period of the previous year, the earnings
per share were equivalent to Euro -0.09 per share (based
on an average share circulation of 51.0 million).
In the third quarter, earnings after minority interests amounted to Euro 0.1 million (previous year’s quarter: Euro -4.6 million).
Development of the Segments
The Sports segment developed at a dynamic rate in the first
nine months of 2006, with sales increasing by Euro 128.1
million or 22.2 percent to Euro 156.5 million. All three sports
companies (DSF, the PLAZAMEDIA Group and Sport1)
achieved an increase in their respective sales in comparison with the previous year. The upward trend in the second
quarter was continued in the period from July to September
therefore.
Earnings of the Sports segment amounted to Euro 10.5 million after the end of the third quarter and were therefore
significantly higher than the corresponding amount of Euro
6.3 million in the previous year. The earnings contribution
in the third quarter was equivalent to Euro 5.3 million compared with Euro -3.2 million in the third quarter of 2005.
The Entertainment segment achieved sales of Euro 22.8
million from January to September of the report year compared with Euro 17.3 million in the previous year’s period.
The major impulse for the sales increase is still the program
delivery contract with ZDF which was booked in the first
quarter prolonged as from 2006, in addition to the initial
16
consolidation of the production subsidiary Flying Bark Productions (formerly Yoram Gross-EM.TV). The results of the
Entertainment segment were equivalent to the positive
amount of Euro 2.4 million after nine months compared
with a loss of Euro 1.7 million in the same period in 2005.
The results of the “Others” segment amounted to Euro -5.9
million after nine months, thereby showing an increase of
14.5 percent in comparison with the corresponding period
in the previous year (Euro -6.9 million).
Net Asset and Financial Position of the Group
The balance sheet total of the EM.TV Group amounted to
Euro 372.6 million at the end of the third quarter and was
therefore Euro 56.4 million higher than the equivalent
amount at December 31, 2005 (Euro 316.2 million). The
increase in the balance sheet total was mainly attributable
to the reorganization of the Group’s financial liabilities in
the second quarter by the issue of the 5.25% convertible
bond 2006/2013.
On the assets side of the balance sheet, there were no major
changes in long-term assets in comparison with the balance sheet dates on December 31, 2005 and September 30,
2006. The increase in „Technical equipment and machinery”
(+ Euro 3.4 million) and “Advance payments and constructions in progress” (+ Euro 6.1 million) is mainly attributable
to increased investments in the PLAZAMEDIA Group, especially in connection with the coverage of the Soccer League.
In comparison with the position at the end of 2005, shortterm assets rose by Euro 54.4 million to Euro 191.6 million.
The main influential factor was the increase of Euro 72.6 million in liquid assets to Euro 118.4 million, the consequences
of the issue of the 5.25% convertible bond 2006/2013, the
inflow of funds from the exercise of option rights and the reduction in trade accounts receivable.
On the liabilities side of the consolidated financial state-
ments as of September 30, 2006, the equity totalled at
Euro 179.4 million, after an increase of Euro 25.8 million or
16.8 percent in comparison with the equivalent amount at
the end of the previous fiscal year (Euro 153.6 million). The
subscribed capital of the Company rose by Euro 1.0 million
to Euro 70.9 million in comparison with the equivalent
amount at the end of the second quarter of 2006. The increase is attributable to the exercise of option rights in connection with the 8% bond with warrants attached of 2004/
2009. The equity ratio was equivalent to 48.1 percent at
the end of the third quarter compared with 48.6 percent as
of December 31, 2005.
As of September 30, 2006, long-term liabilities increased
by Euro 43.0 million to Euro 118.5 million in comparison
with the end of 2005. In the case of the financial liabilities
included therein, the 5.25% convertible bond 2006/2013
issued in the report period was offset by the premature repayment of the outstanding nominal amount of Euro 37.1
million relating to the 8% bond with warrants attached of
2004/2009.
Short-term liabilities of Euro 74.8 million at the end of the
third quarter were Euro 12.3 million lower than the value
as of December 31, 2005. The Group had no short-term
bank liabilities as of September 30, 2006 (December 31,
2005: Euro 5.6 million).
Cash Flow
The cash flow from operating activities of the EM.TV Group
amounted to Euro 40.0 million in the first nine months of
the report year compared with Euro -3.9 million in the corresponding period of 2005.
the Sports segment in connection with the German Soccer
League. The substantial amount of Euro 67.3 million in the
previous year was marked at that time by the inflow of
funds from the sale of shares in Tele München Gruppe.
Investment activities gave rise to a cash flow of Euro -26.3
million, with the aforesaid reflecting expenses for the acquisition of investment holdings (Creation Club, Flying Bark
Productions and Trackdown), together with investments in
The cash flow from financing activities reached a positive
level of Euro 64.5 million (nine months in 2005: Euro -114.6
million on account of the repayment of the zero coupon
note). The inflow of funds from capital increases resulting
17
from the exercise of option rights and in connection with
the issue of the 5.25% convertible bond 2006/2013 was
partially offset by the outflow of funds for the premature
repayment of the outstanding amount of the 8% bond with
warrants attached of 2004/2009 and the further reduction
in financial liabilities.
The total volume of cash flows from January to September
gave rise to a positive cash flow of Euro 72.8 million compared with a cash-outflow of Euro 51.2 million in the equivalent period in 2005.
Personnel
The EM.TV Group had an average of 804 employees in the
first nine months of 2006 compared with 630 persons in
the corresponding period of the previous year. The afore-
said increase was mainly attributable to the increase in the
consolidation group represented by Creation Club and
Flying Bark Productions.
Financial Position of EM.TV AG
EM.TV AG which draws up its financial statements in accordance with the provisions of the German Commercial Code
(HGB) showed a balance sheet total of Euro 330.7 million as
of September 30, 2006 compared with Euro 284.0 million
as of December 31, 2005. Liquid assets amounted to Euro
73.0 million (Euro 25.9 million as of December 2005).
The equity of the AG amounted to Euro 177.0 million at the
end of the third quarter (Euro 169.5 million as of December 31, 2005). This gave rise to highly sound equity ratio of
53.5 percent compared with 59.7 percent at the end of
2005.
Major Occurences after the Balance Sheet Date
On November 16, 2006 the Swiss media company Highlight
Communications AG has informed EM.TV AG that it has concluded an option agreement with Constant Ventures II
Luxembourg S.A. in Holland for the purchase of 5.69 million
shares in EM.TV AG. The voting right for these shares will
be held by Highlight Communications AG as of December
1, 2006 according to the aforesaid notification.
Highlight Communications has also notified us that it had
acquired shares in the company before and will thereby hold
an attributable stake of approximately 13 percent of the
share capital of EM.TV AG, as of December 1, 2006 which
equals to approximately 14.9 percent of the voting capital.
18
The Supervisory Board and Management Board of EM.TV
AG interpret the acquisition of shares as a strategic step
and welcome it in principle as a further stabilization of the
shareholder structure of EM.TV. The Management Board of
EM.TV AG will contact the Administrative Board of Highlight
Communications AG in the near future in order to enquire
about the specific entrepreneurial interests of Highlight
Communications on the one hand and, on the other, to discuss the possibilities of co-operations from the point of view
of EM.TV extending to strategic alliances between the two
companies.
Prospects and Outlook
Prospects and Outlook
After the first nine months, the EM.TV Group is well positioned to achieve its economic objectives for the whole
financial year. At the same time, it has to be borne in mind
that it has been necessary to adsorb substantial expenses
during the course of the current year. Specific reference is
made in this respect to the write-down of the minority holding in arena media GmbH in the first quarter and the compound interest on the premature repayment of the bond with
warrants attached of 2004/2009 which was required in accordance with IFRS. Both factors have had a negative effect
equivalent to approximately Euro 5 million on the pre-tax
results in the first nine months of the current financial year.
In the report on the second quarter of 2006, EM.TV drew
attention to a sales and earnings risk in the Sports segment
on account of the legal disputes regarding the future of
sports betting offers in Germany. This risk no longer applies
on the basis of the present legal and economic development of the aforesaid dispute and the attainment of additional sales by the sports companies in other sectors.
Against that background the Management Board re-affirms
its objectives for the whole of 2006:
> Consolidated sales of approximately EUR 250 million,
equivalent to a growth rate of approximately 19 percent in
comparison with 2005;
> A consolidated EBITDA of EUR 27 to 30 million, equivalent
to an increase of at least 27 percent;
> A consolidated EBIT of EUR 8 to 10 million, equivalent to
an increase of at least 40 percent.
Unterföhring, November 2006
EM.TV AG
The Management Board
19
Consolidated Financial Statements I Balance Sheet
ASSETS AT SEPTEMBER 30, 2006 in EUR ‘000
30/9/2006
31/12/2005
Intangible assets
86,425
89,832
Goodwill
52,432
54,508
991
1,285
Non-current assets
Land, property rights and buildings
11,211
7,806
Other equipment, factory and office equipment
3,227
4,026
Advance payments and assets under construction
6,929
790
Investments in associated companies
3,240
5,253
Technical equipment and machinery
Other investments
Long-term receivables
Deferred tax assets
288
328
5,042
9,021
11,300
6,069
181,085
178,918
Current assets
Finished goods and merchandise/work in progress
Trade receivables
Receivables due from associated companies
Receivables due from joint ventures
Other assets
Cash and cash equivalents
Total assets
20
64
72
50,203
68,650
1,692
2,827
128
0
21,057
19,886
118,407
45,806
191,551
137,241
372,636
316,159
EQUITY/LIABILITIES AT SEPTEMBER 30, 2006 in EUR ‘000
30/9/2006
31/12/2005
Equity
Subscribed capital
70,907
66,601
Own shares
-10,333
-16,726
Contributions made to execute the resolved captial increase
Capital reserves
Other reserves
Accumulated losses carried forward
Minority interests
Contribution in connection with share-issues
which have not yet been registered
0
3,274
117,790
101,600
429
316
-5,950
-7,937
243
229
6,280
6,242
179,366
153,599
27
0
Long-term liabilities
Long-term accruals
Pension accruals
Deferred tax liabilities
380
1,763
105,128
64,549
228
210
12,741
8,966
118,477
75,488
Short-term liabilities
Bonds
Liabilities to banks
Advance payments
Trade accounts payable
30
30
0
5,577
5,594
3,353
17,988
17,516
421
0
1,541
1,386
Other liabilities
39,177
44,106
Other accruals
7,390
9,837
Tax accruals
2,625
5,267
74,766
87,072
372,636
316,159
Liabilities due to associated companies
Liabilities due to joint ventures
Total equity and liabilities
21
Consolidated Financial Statements I Consolidated Profit and Loss Account
JANUARY 1 TO SEPTEMBER 30, 2006 in EUR ‘000
Sales
Own work capitalized
Total output
1/7 to
30/9/2006
1/1 to
30/9/2005
1/7 to
30/9/2005
179,419
57,482
146,526
46,078
1,176
189
496
116
180,595
57,671
147,022
46,194
Other operating income
15,177
3,553
12,594
4,171
Cost of materials
-92,922
-29,586
-81,842
-29,911
Personnel expenses
-44,130
-14,608
-37,186
-11,853
Amortization and depreciation
-13,634
-4,696
-11,174
-3,852
Other operating expenses
-38,264
-10,506
-31,783
-12,111
Earnings before interest and taxes
6,822
1,828
-2,369
-7,362
Earnings from investments in associated companies
-2,000
-118
-82
-181
Financial result
-7,177
-1,380
-3,923
-963
Earnings before taxes
-2,355
330
-6,374
-8,506
Taxes
2,541
-277
2,713
3,937
186
53
-3,661
-4,569
57
35
-829
0
243
88
-4,490
-4,569
180,595
57,671
147,022
46,194
20,456
6,524
8,805
-3,510
EBIT
6,822
1,828
-2,369
-7,362
EBT
-2,355
330
-6,374
-8,506
Earnings after taxes
thereof minority interests
Total output
EBITDA
22
1/1 to
30/9/2006
Shareholders’ interests for the year per share undiluted in Euro
0.00
-0.09
Shareholders’ interests for the year per share diluted in Euro
0.00
-0.09
Average number of shares in circulation (undiluted)
58,072,177
51,041,099
Average number of shares in circulation (diluted)
68,424,171
69,262,199
Consolidated Financial Statements I Consolidated Cash Flow Statements
JANUARY 1 TO SEPTEMBER 30, 2006 in EUR ‘000
Minority interests
Deferred taxes
Cost of materials through use of fixed assets disposal
Amortization depreciation of fixed assets
Earnings on disposal of fixed assets
Other non-cash items
Changes in inventories, trade receivables and other assets
which are not allocable to investment or financing activities
Changes in trade payables and other liability
which are not allocable to investment or financing activities
1/1 to
30/9/2006
1/1 to
30/9/2005
243
-4,490
-57
829
-2,262
-2,691
1,192
1,552
15,798
11,306
-22
-55
986
-743
22,862
-10,806
1,298
1,176
40,038
-3,922
Payments for acquisition of companies
-9,484
-39,768
Payments for intangible assets
-3,793
-3,230
Payments for tangible assets
-12,539
-5,229
Payments for financial assets
-38
-2,552
-781
0
Cash flow from operating activities
Divestment of companies
Proceeds from disposals of intangible assets
Proceeds from disposals of tangible assets
Proceeds from disposals of financial assets
Cash flow from investment activities
93
0
267
74
15
118,000
-26,260
67,295
Proceeds from capital increases and allowances by shareholders
28,689
4,090
Repayment of long-tem liabilities
-41,389
-124,986
Proceeds from receipt of longterm liabilities
77,170
6,300
Cash flow from financing activities
64,470
-114,596
Cash flow for the year
78,248
-51,223
40,229
105,961
118,407
55,311
Net funds at the beginning of the year
Net funds at the end of the year
Effects of foreign currency differences
Changes in net funds
Cash and cash equivalents*
Short-term bank liabilities
Short-term net funds at the end of the financial period
Changes in liquity funds
Changes in short-term bank liabilities
-70
573
78,248
-51,223
118,407*
58,474 *
0
-3,163
118,407
55,311
72,601
-47,487
-5,577
3,163
*thereof EUR 146 thousand ( Y. 2005: ‘000 EUR 9,590) bound for security reasons.
23
Consolidated Financial Statements I Segment Reporting 2006
SEGMENT INFORMATION BASED ON OPERATING SECTORS JANUARY 1 TO SEPTEMBER 30, 2006 in EUR ‘000
External sales
Intercompany sales
Other own work capitalized
Remaining segment gains
Segment expenses
Entertainment
Sports
Others
Transition
Group
22,759
156,487
173
0
179,419
35
203
0
-238
0
551
625
0
0
1,176
4,067
8,198
5,290
-2,378
15,177
-24,977
-154,993
-11,358
2,378
-188,950
> thereof amortization and depreciation
-7,669
-5,335
-630
0
-13,634
Segment result
2,435
10,520
-5,895
-238
6,822
158
-2,156
-2
0
-2,000
Period result of associated companies
Non-allocated operational elements
Write-down financial assets and marketable securities
-8
Interest expenses
-9,282
Interest income
2,113
-2,355
Other segment informations
Segment assets
> thereof shares of associated companies
138,091
131,564
91,393
3,240
0
0
361,048
3,240
11,588
Non-allocated elements
Assets of the Group
Segment liabilities
372,636
17,197
38,337
72,718
17,184
120,525
Liabilities of the Group
Segment investments
193,243
2,959
13,298
16,370
113
SEGMENT INFORMATION BASED ON REGIONS JANUARY 1 TO SEPTEMBER 30, 2006 in EUR ‘000
External sales
Period results of associated companies
Segment assets
Segment investments
24
Germanspeaking
Rest of
Europe
Rest of
the world
Total
174,414
1,779
3,226
179,419
-2,158
158
0
-2,000
338,740
10,867
11,441
361,048
0
3,240
0
3,240
15,461
262
647
16,370
Consolidated Financial Statements I Segment Reporting 2005
SEGMENT INFORMATION BASED ON OPERATING SECTORS JANUARY 1 TO SEPTEMBER 30, 2005 in EUR ‘000
External sales
Intercompany sales
Other own work capitalized
Remaining segment gains
Entertainment
Sports
Others
Transition
Group
17,303
128,119
1,104
0
146,526
0
0
0
0
0
496
0
0
0
496
2,611
6,624
5,326
-1,970
12,591
-22,134
-128,484
-13,334
1,970
-161,982
> thereof amortization and depreciation
-8,310
-2,228
-636
0
-11,174
Segment result
-1,724
6,259
-6,904
0
-2,369
42
-124
0
0
-82
Segment expenses
Period result of associated companies
Non-allocated operational elements
Write-down financial assets and marketable securities
-8
Interest expenses
-6,142
Interest income
2,227
-6,374
Other segment informations
Segment assets
127,599
123,004
45,247
3,097
2,156
0
295,850
5,253
12,859
Assets of the Group
Segment liabilities
308,709
17,418
33,424
31,513
82,355
78,358
Liabilities of the Group
160,713
Segment investments
2,262
8,671
78
11,011
SEGMENT INFORMATION BASED ON REGIONS JANUARY 1 TO SEPTEMBER 30, 2005 in EUR ‘000
External sales
Germanspeaking
Rest of
Europe
Rest of
the world
Total
143,473
937
2,116
146,526
-124
61
-19
-82
283,861
7,316
4,673
295,850
2,171
3,082
0
5,253
Segment investments
9,070
803
1,138
11,011
Period results of associated companies
Segment assets
25
Consolidated Financial Statements I Changes in Consolidated Equity
CHANGES IN CONSOLIDATED EQUITY in EUR ‘000
Own
Shares
Resolved
capital
increase
Capital
reserves
Other
reserves
Accumulated
losses carried
forward
65,617 -17,317
983
100,631
33
-142,268
134,331
134,331
-134,331
Subscribed
capital
Balance 1/1/2005
Reclassification of earnings brought
forward from the previous year
153,100
0
0
1,340
836
504
Total
53
-983
983
Capital increase from options
Changes in consolidated enities
25
25
Acquisition of minority interests
-5,878
-5,878
-4,490
829
-3,661
266
266
Currency conversion differences
Net profit of the year
Balance 30/9/2005
66,601 -16,813
0
101,467
352
-7,937
-4,490
6,066
145,246
Balance 1/1/2006
66,601 -16,726
3,274
101,600
316
-7,937
229
6,242
153,599
229
-229
Reclassification of earnings brought
forward from the previous year
Withdrawl from capital reserve for end
of conersion right for the convertible bond
Entry of shares from option rights
Capital increase from options
-1,760
6,393
Contribution from conversion
of convertible bonds
0
1,760
1,032
9,625
16,018
8,194
8,194
131
131
Employee shared-based payment
Revaluation of assets
17
17
491
491
95
Changes in consolidated entities
Currency conversion differences
-395
-2
429
-5,950
Net profit of the year
Balance 30/9/2006
0
-3,274
4,306
Capital increase from convertible bonds
26
11,090
53
Employee shared-based payment
Entry of shares from option rights
Shareholders’ Minority
interests interests
70,907 -10,333
0
117,790
95
-397
243
-57
186
243
6,280
179,366
Consolidated Financial Statements I Information on the Consolidated Companies
The following companies have been included and fully consolidated in the consolidated financial statements for the
current financial year, thereby giving rise to changes in the
consolidation:
Flying Bark Productions Pty. Ltd. (formerly: Yoram GrossEM.TV Pty. Ltd.)
With a contract dated January 11, 2006, EM.Entertainment
GmbH, a wholly-owned subsidiary of EM.TV AG, acquired
the outstanding 50 percent of the previous joint venture
company. The purchase price was equivalent to TEUR
4,868, with the seller being the previous partner Yoram
Gross Holdings. As from the aforesaid date, the Company
will be included in the consolidated financial statements by
means of a full consolidation (previously included on a pro
rata basis).
Trackdown Digital Pty. Ltd.
With effect from July 1, 2006, Flying Bark Productions Pty.
Ltd. increased its holding in Trackdown Digital Pty. Ltd. by
9.922 percent to the present 51.587 percent. The purchase
price amounted to TEUR 131 and was effected by the relinquishment of a receivable equivalent to the same amount.
As from the aforesaid date, the Company will be included in
the consolidated financial statements by means of a full
consolidation (previously consolidated at equity).
CASH OUTFLOW FROM INVESTMENTS in EUR ‘000
Intangible assets
Tangible assets
Entertainment
segment
Total
2,976
2.976
339
339
Long-term receivables
60
60
Deferred tax assets
66
66
Non-current assets
3,441
3,441
410
410
Trade receivables
Receivables due from associated companies
77
77
Other current assets
99
99
1,618
1,618
Current assets
2,204
2,204
5,645
Deferred tax liabilities
927
927
299
299
1,226
1,226
Trade account payables
689
689
Liabilities due to affiliated companies
206
206
Other liabilities
245
245
Long-term Liabilities
38
38
1,178
1,178
Net asset value
3,241
3,241
Goodwill
1,558
1,558
Purchase price
4,799
4,799
Tax accruals
2,404
Acquired liquid funds
Long conversion to equity
1,618
131
In arrear payed purchase price for Creation Club (CC) GmbH
6,434
Cash outflow from investments
9,484
27
Consolidated Financial Statements I Information on the Consolidated Companies
Sport1 Multimedia GesmbH, Vienna, Austria
All the shares in Sport1 Multimedia GesmbH, Vienna,
Austria were sold under the terms of the contract dated
May 31, 2006. The selling price amounted to Euro 1 million. The deconsolidation was made on the date of sale.
CASH OUTFLOW FROM DIVESTMENTS in EUR ‘000
Intangible assets
Tangible assets
Non-current assets
Trade receivables
Other current assets
-7
-52
-59
-319
-105
-1,781
Current assets
-2,205
-2,264
Long-term Liabilities
Trade account payables
Other liabilities
Tax accruals
89
1,605
25
1,719
1,719
Net asset value
-545
Net sales price
1,000
Remaining profit
Proceed of liquid funds
1,000
Disposal of liquid funds
-1,781
Cash outflow from divestments
28
455
-781
Finance Calendar 2007
March 27, 2007
Annual Report 2006/Annual Press Conference
May 22, 2007
Report for the first quarter of 2007
June 27, 2007
Annual General Meeting (AGM) for 2006 business year
August 21, 2007
Report for the second quarter of 2007
November 20, 2007 Report for the third quarter of 2007
Note: Analysts conference calls will usually be on the release day of the annual report and the
quarterly reports respectively.
Production Credits
Published by
EM.TV AG
Beta-Straße 11, 85774 Unterföhring, Germany
Tel. +49 (0) 89 99 500-0, Fax +49 (0) 89 99 500-111
E-Mail info@em.tv, www.em.tv, HRB 148 760 AG Munich
Edited by
EM.TV AG Kommunikation/Investor Relations
Frank Elsner Kommunikation für Unternehmen GmbH, Westerkappeln
Designed by
EM.TV AG/Creation Club (CC) GmbH
29
EM.TV AG
Beta-Straße 11
85774 Unterföhring, Germany
Tel. +49 (0) 89 99 500 -0
Fax +49 (0) 89 99 500 -111
E-Mail info@em.tv
Internet www.em.tv
HRB 148 760 AG München

Q3Quarterly Report 2006

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