RTL Group boasts record profit in 2021
Broadcaster sheds units as it focuses on streaming and content
(Clarifies that several announced mergers and acquisitions are pending regulatory approval.)
Luxembourg-based RTL Group last year logged a record profit of nearly €1.5 billion as it consolidated its operations and its recovery from the pandemic's shock to advertising, the company said on Thursday.
The 2021 profit mark, more than double 2020's €625 million, came from stronger operations as well as capital gains, the company said.
Revenue rose by 10% from 2020 to €6.6 billion, boosted by the sales of units and other moves adding almost €950 million, RTL Group said. Revenue from units still within the company was 4.3% higher than 2019, before the financial shocks from the global Covid-19 pandemic, the company said.
"TV advertising money came back quickly. This clearly shows the strength of TV with regards to building reach and brand in a high-quality and safe environment," RTL Group CFO Björn Bauer said in a conference call with analysts.
Though the roots of the company date back to when Radio Luxembourg went on air in 1924 and the company maintains remote production services at its Broadcasting Center Europe in the the Grand Duchy, RTL Group is managed primarily from Cologne, Germany. The German media giant Bertelsmann has been the main shareholder since 2001 while the remaining 24% of shares are publicly traded.
Though RTL Luxembourg reaches 82% of Luxembourg residents over the age of 14 through its TV, radio and digital activities, results from the Grand Duchy were so small they were folded into other media units and not expressed in the financial disclosures.
RTL Group still employed about 600 people last year at its headquarters in Luxembourg's Kirchberg business district. A new contract for the broadcaster to provide content in Luxembourgish and other languages should keep jobs in the Grand Duchy until 2030, Prime Minister Xavier Bettel's office said in January.
The contract negotiated by Bettel's government but not yet approved by lawmakers would pay RTL close to €98 million between 2024 and 2030, capped at €15 million a year, with the average annual payment being 40% more than the current contract, a lawmaker who has reviewed the deal told Luxembourg Times.
RTL Group last year continued to beef up against changing consumer tastes increasingly seeking on-demand, online video content. The company sold off broadcasting units in Belgium and Croatia and added scope with mergers in France and Germany. All but the acquisition of Gruner+Jahr in Germany remain pending regulatory approvals.
Growth plans are based on expanding RTL Group's video streaming subscription service in Germany and the Netherlands and producing entertainment for itself and other streaming outlets like Netflix and Apple TV, RTL Group Chief Executive Officer Thomas Rabe said.
"RTL Group’s growth businesses of streaming and content progressed significantly in 2021," said Rabe, who is also CEO of Bertelsmann.
Fremantle - the company's production firm for dramas, comedies and unscripted shows – increased revenues by 25% and accounted for about 20% of group income, the company said.
Fremantle has been buying up production companies in Scandinavia, Italy and elsewhere and now claims to pump out three times more non-English dramatic content than other major studios, the company said. Fremantle is targeted to grow, including through mergers, to €3 billion in revenues by 2025 from €1.9 billion last year, the company said.
"There is an insatiable amount of appetite for quality, premium drama," Fremantle CEO Jennifer Mullin said.