Business Development of the Segments

The Broadcasting German-speaking segment grew profitably with a constantly high margin. In the Digital Entertainment segment, the strategically important AdVoD business is developing particularly dynamically. The strongest growth driver was the Digital Ventures & Commerce segment; acquisitions complement the portfolio and add value. The Content Production & Global Sales segment slightly decreased.

086 / Group Revenue Share by Segment in %, 2016 figures in parentheses

087 / Adjusted Ebitda by Segment in EUR m

Broadcasting German-speaking segment

For the full-year, external revenues in the Broadcasting German-speaking segment slightly increased to EUR 2,239 million. This corresponds to a year-on-year growth of 1% or EUR 29 million. This was mainly due to higher distribution revenues generated by the Group from the distribution of TV stations in HD quality and via mobile streaming providers. In the fourth quarter of 2017, TV advertising revenues again increased both in the core market of Germany and in Austria and Switzerland. Notes, Note 2 “Segment reporting,” page 181 Development of the TV and Online Advertising Market

The segment’s internal revenues further grew and amounted to EUR 146 million (previous year: EUR 94 million). This particularly resulted from increased revenues of internal advertising customers due to the commercial relationships between the TV and Commerce business.

Adjusted EBITDA reflected the revenue development and amounted to EUR 767 million (+ 1% or EUR 7 million year-on-year). The corresponding adjusted EBITDA margin was 32.2% (previous year: 33.0%). By contrast, EBITDA decreased significantly to EUR 544 million (previous year: EUR 747 million) as a result of reconciling items. This was mainly attributable to expenses in the context of the strategic reevaluation of parts of the programming assets in the third quarter of 2017, which led to an unscheduled consumption of EUR 170 million. Group Earnings

Digital Entertainment segment

In the Digital Entertainment segment, external revenues increased to EUR 463 million (previous year: EUR 442 million). This 5% growth was mainly based on the development of revenues in the AdVoD business. Both the advertising-financed digital studio Studio71 and the AdTech portfolio contributed to growth. In addition, the revenues of the PayVoD offering maxdome increased. By contrast, revenues from the music and event business (Adjacent) developed below the previous year’s level. There was also an opposing effect from the deconsolidation of the Games business, which the Group sold in 2016. However, these developments were considerably more than offset by revenue growth in the strategically relevant AdVoD business. Notes, Note 2 “Segment reporting,” page 181

The individual business areas have different margin structures and growth momentum, with the effect that adjusted EBITDA decreased. It marked a decline of 13% or EUR 5 million to EUR 32 million. The adjusted EBITDA margin therefore amounted to 6.5% (previous year: 7.9%). At the same time, EBITDA decreased to EUR 10 million (previous year: EUR 37 million). The disproportionately weak EBITDA development was mainly influenced by expenses in connection with the reorganization at maxdome. Group Earnings

Digital Ventures & Commerce segment

External revenues in the Digital Ventures & Commerce segment continued to increase significantly (+ 30%) and amounted to EUR 996 million in the financial year 2017 (previous year: EUR 768 million). The development of revenues reflects organic growth and changes in the portfolio. Verivox, Flaconi and Amorelie made substantial contributions to the organic growth. In addition, the Ventures area with the business models media-for-revenue-share and media-for-equity reported solid growth. At the same time, the initial consolidation of various online portals, including Parship and ElitePartner, Windstar and Jochen Schweizer, supported the revenue momentum. However, revenues in the Online Travel vertical significantly decreased due to the deconsolidation of the online travel agency Etraveli in the third quarter of 2017. Notes, Note 2 “Segment reporting,” page 181 Changes in the Scope of Consolidation

The growth in external segment revenues resulted in an increase in adjusted EBITDA to EUR 221 million (previous year: EUR 180 million). The adjusted EBITDA margin was 22.1% (previous year: 23.0%). EBITDA increased by EUR 394 million to EUR 562 million. This includes reconciling income from the sale of Etraveli in the third quarter of 2017. Group Earnings

Content Production & Global Sales segment

In the Content Production & Global Sales segment, external revenues decreased by 3% or EUR 10 million to EUR 352 million compared to the strong previous years’ figure. This is mainly due to currency effects and typical market fluctuations in the US production business. In contrast, the British Red Arrow production subsidiaries and the German production business with RedSeven Entertainment developed positively. In addition, the global sales business reported growth compared to the same period of the previous year. Here, the initial consolidation of the US film distribution company Gravitas since November had a positive impact. Internal revenues of the segment grew due to increased revenues from the disposal of TV content to the ProSiebenSat.1 TV business and amounted to EUR 75 million (previous year: EUR 60 million). Notes, Note 2 “Segment reporting,” page 181

As a result of the overall declining revenue development, adjusted EBITDA amounted to EUR 36 million, representing a decline of 23% or EUR 11 million. The higher previous years’ figure was characterized by a positive effect at exploitation rights of licenses in the sales business. The adjusted EBITDA margin fell to 8.5% (previous year: 11.2%). EBITDA amounted to EUR 27 million (previous year: EUR 44 million).