Group Earnings

2017 was a new record year for ProSiebenSat.1 with revenues of EUR 4,078 million and adjusted EBITDA of EUR 1,050 million. The Group enlarged its portfolio and expanded it as a result of strategic acquisitions, this had a major effect on the development of revenues and costs. ProSiebenSat.1 is focusing on investments that synergistically complement the portfolio and that are suitable for TV advertising.

In 2017, ProSiebenSat.1 Group increased its consolidated revenues to EUR 4,078 million. This corresponds to a growth of 7% or EUR 279 million compared to the financial year 2016. The main revenue driver was the Digital Ventures & Commerce segment. Revenues in the Broadcasting German-speaking segment rose slightly for the full-year and the segment contributed 55% or EUR 2,239 million to consolidated revenues (previous year: 58% or EUR 2,210 million). Business Development of the Segments

Other operating income amounted to EUR 332 million (previous year: EUR 34 million). The increase reflects the gross proceeds of EUR 302 million from the sale of Etraveli. In this context, selling costs of EUR 8 million accrued. They are reported in total costs. Changes in the Scope of Consolidation, Notes, Note 4 “Acquisitions, disposals and other transactions in connection with subsidiaries,” page 189

Total costs increased by 17% or EUR 534 million overall and amounted to EUR 3,590 million (Fig. 082). This includes consumption of programming assets totaling EUR 1,145 million (previous year: EUR 915 million). In the third quarter of 2017, ProSiebenSat.1 Group reevaluated its programming assets. This reevaluation was strategic and went beyond the common analysis as part of the regular impairment test. In this context, ProSiebenSat.1 identified a need to impair programming assets by around EUR 170 million. Depreciation and amortization recognized as part of total costs increased by 28% or EUR 58 million to EUR 263 million. This mainly relates to impairments on brands and other intangible assets.

Operating costs increased due to acquisitions in particular and amounted to EUR 3,053 million (previous year: EUR 2,804 million). This equates to an increase of 9%. Operating costs are the relevant cost item for calculating adjusted EBITDA. (Fig. 083)

082 / Total Costs in EUR m

Adjusted EBITDA grew by 3% or EUR 33 million to EUR 1,050 million. The corresponding adjusted EBITDA margin amounted to 25.8% (previous year: 26.8%). The margin development reflects the changed allocation of revenues by segment: The Group’s objective is to generate additional revenue potential, particularly in the digital industry. The digital business is developing dynamically overall, but is subject to different earning structures and partly lower margins than the TV business. Development of the Business Segments

Group EBITDA was a considerable 10% up on the previous year at EUR 1,084 million (previous year: EUR 982 million). This figure is characterized by reconciling items totaling EUR 34 million (previous year: EUR –35 million), which comprise the following (Fig. 084): While the sale of Etraveli resulted in gross proceeds of EUR 302 million in the Digital Ventures & Commerce segment, the strategic reevaluation of parts of the programming assets led to expenses of EUR 170 million in the Broadcasting German-speaking segment. Expenses in connection with reorganizations amounted to EUR 45 million (previous year: EUR 22 million). They were mainly due to unscheduled consumption of programming assets in connection with the acquisition and reorganization of the Austrian broadcasting group ATV and the reorganization of maxdome in the Digital Entertainment segment. Costs in the amount of EUR 32 million also resulted from M&A projects (previous year: EUR 16 million) that were mainly attributable to the Digital Ventures & Commerce segment. Other EBITDA effects amounted to minus EUR 21 million (previous year: EUR 3 million) and, among others, include positive valuation effects on cash-settled share-based payments (Group Share Plan) of EUR 4 million (previous year: EUR 9 million) and expenses for impending losses (EUR 10 million) and legal claims (EUR 9 million) mainly in the Broadcasting German-speaking segment.

The financial result amounted to minus EUR 174 million (previous year: EUR –119 million) and is characterized by opposite developments in the other financial result. The other financial result amounted to minus EUR 82 million (previous year: EUR –34 million). In 2017, the Group reported impairments and reversals of financial assets of minus EUR 77 million (net) (previous year: EUR –21 million). These primarily resulted from an impairment of shares in gamigo (EUR 13 million), Pluto TV and Jaunt. In contrast, the previous year’s figure includes impairments on financial investments of minus EUR 44 million. In 2017, there was also a positive valuation effect of EUR 5 million from the media-for-equity portfolio. This compares to a positive valuation effect on shares in Stylight GmbH of EUR 9 million in 2016; the previously held shares in Stylight increased in value in connection with the majority acquisition in July 2016. In addition, the Group reported valuation adjustments of put option liabilities of minus EUR 59 million (previous year: EUR –24 million) for 2017.

While the other financial result increased for the reasons mentioned above, the interest result remained virtually stable at minus EUR 83 million (previous year: EUR –84 million). The result from investments accounted for using the equity method amounted to minus EUR 10 million (previous year: EUR –1 million). Notes, Notes 11-12 “Interest result,” “Result from investments accounted for using the equity method and other financial result,” page 199–200

Pre-tax profit amounted to EUR 646 million, corresponding to a decline of 2% or EUR 12 million compared to the previous year. The revenue growth and the deconsolidation profit from the sale of Etraveli were largely offset by extraordinary accounting effects with an impact on expenses. In addition to the strategic reevaluation of parts of the programming assets, these effects also included impairments and reversals of financial assets.

Income tax expenses decreased by EUR 41 million to EUR 165 million with a tax rate of 25.5% (previous year: 31.3%). The lower tax rate particularly reflects the sale of Etraveli in the third quarter of 2017. The developments described resulted in an increased consolidated net profit from continuing operations by 6% to EUR 481 million (previous year: EUR 452 million). At the same time, consolidated net profit after non-controlling interests from continuing operations rose to EUR 471 million (previous year: EUR 444 million). Adjusted net income rose by 3% to EUR 550 million (previous year: EUR 536 million). Basic underlying earnings per share decreased to EUR 2.40 (previous year: EUR 2.47). Notes, Note 13 “Income taxes,” page 201 Notes, Note 14 „Earnings per share“, page 203

Further information on revenue and earnings figures for the fourth quarter 2017 can be found in the section “Information”.