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Intrinsic Value is all-important and is the only logical way to evaluate the relative attractiveness of investments and businesses.
Intrinsic Value is all-important and is the only logical way to evaluate the relative attractiveness of investments and businesses.
Good morning, ladies and gentlemen, welcome to the Q2 and H1 2019 Results Call of ProSiebenSat.1 Media SE. This conference is being recorded. Today's call is hosted by Mr. Ralf Gierig. Please go ahead, sir.
Good morning, ladies and gentlemen. Welcome also from my side to our Q2/H1 2019 results call. Today's call is hosted by our CEO, Max Conze, and our CFO, Rainer Beaujean. I will join the Q&A session. Before we start with the presentation we will have for those of you who follow our webcast, a short video featuring our new show, The Masked Singer, which was an amazing success on German screens. For those of you who are connected to the telephone line, those will listen to music during the course of the trailer, so please stay tuned.Post the trailer, Max and Rainer will first lead you through our presentation. Web links and dial-ins were made available via our email invitation and can be found on our IR web page including presentation materials. The presentation will be followed by Q&A session, as said. With this, we start with the trailer.[Presentation]
Good morning, and thank you for joining us. I wanted to start with a quick anecdote. The other day, I met one of our TV hosts and one of our big stars on a Friday morning at the airport. We were grabbing a coffee, and as we were chatting, he told me that he and his son were just watching The Masked Singer the evening before. And then because his son isn't very old, when it was time for him to go to bed, his son asked whether he could finish watching The Masked Singer on Joyn. And I really got a kick out of this for 2 reasons: one, I think it shows that entertainment is relevant across all audiences; and that with Joyn, we're extending those audiences from TV to digital in a very meaningful way. And I'll talk about that more later. Now if you go to Slide 5, I wanted to start off and remind you of the strategic priorities that we set out last fall and that we have been consistently focused on and executing. Number one, to build a future-fit entertainment and commerce champion, importantly, return to and accelerate organic growth while investing for total shareholder return; two, focus on local content, make that content more live, more local, more relevant and win back bigger audiences; three, reach large audiences across all channels by building out our digital footprint both through own and third-party platforms; four, turn that reach into more money, particularly focused on creating more addressable inventory; five, drive content production by expanding our synergistic local footprint and scale up Studio71, our digital outfit globally; and six, on NuCom, to build our synergistic commerce portfolio by serving large consumer needs with a focused portfolio and building market leaders across all 4 verticals. So how are we doing? Well, we've been very focused on executing across all of those priorities and I think we're seeing good progress across all of them, though, of course, it's a journey and we're working hard every single day. So let me cover the 6 points. On growth, we're seeing group revenue growth of 4%, both for the second quarter and for the first half. By the way, that compares to about an average of minus 4% for our European peers. And while certainly we would want more in the future, we think that puts us well on track in delivering growth and acceleration.Two, on local content, we are seeing the best TV audience shares in June, in Q2, in the first half, and importantly, total video viewtime was up for the first time in the second quarter. Now total video viewtime measures all minutes of all content we put out on all channels whether they be TV and digital. And that's a really, really important metric because what it really means is that we are beginning to compensate and overcompensate with digital viewing the declines in linear viewing. And by the way, that is before we have launched Joyn. Three, we've had, I think quite a successful launch with Joyn, 3.8 million monthly active users within the first month, which, by the way, is 4x what 7TV, the predecessor of Joyn, had the months before. Four, smart and digital advertising growing plus 26% and we're making good progress in coming after addressable reach with the joint venture called d-force with RTL and the full commercial launch of addressable TV spot. Five, Red Arrow Studios had another super quarter with plus 28% revenues and Studio71 also delivering double-digit revenue growth. And last but not least, on NuCom, we're well on track with 18% revenue growth to become a EUR 1 billion leading European digital platform and commerce champion. On Slide 7, I just wanted to remind all of us on the breadth of our business because at times I feel that the narrative is getting a little bit too narrow, that we are a TV advertising business. And while, by all means, TV is still a very important core and I think can be a healthy core in the future, we derive 50% of our total revenues from non-TV advertising. And in fact, that part of the business, if you culled all the parts together, is growing at about plus 12%. And so if you look at the parts underneath, you can see on Red Arrow Studios, plus 20%, plus 41%. You can see on Entertainment, the TV core advertising, which continues to be challenged, and I'll talk about more on that later, but you also see the growth in Digital & Smart and Distribution. And by the way, the negative number on other nonadvertising is entirely maxdome deconsolidation effects so if you look at that number organically, it would also be growing. And then you see very good and healthy growth across the 4 verticals at NuCom. So if then we go to Slide 8, what are the numbers for Q2 and for the first half. As I said earlier, revenues are up 4% organic and reported. Entertainment revenues are minus 1% organic and that is a mix of a 3% decline in TV core advertising, offset 2/3 by 26% growth in digital and smart advertising. Red Arrow Studios are growing 21% and 28% organic and reported. And Commerce/NuCom Group, plus 7% and plus 18% reported. The plus 7% are marginally weaker than we would like because there's some weakness in the energy market, which is affecting Verivox, but all in, we're pleased with that performance. And I think you can see that we are doing what we told you in our strategy: returning to revenue growth, accelerating digital and diversification. And all of that is coming through in our numbers. We've also just seen and closed July. Now July is a small month, pretty easy comparators so I don't want to put too much into this. But nevertheless, entertainment and advertising revenues grew 8%, TV advertising grew 4% and digital grew 68%, which I think is beginning to show the impact of Joyn as this was the first month where we launched. And by the way, if you look at year-to-date, that takes a minus 3% in advertising to about minus 1.6%. Our forward outlook, I think, in advertising markets continues to be uncertain, but nevertheless, I think this is encouraging that our strategy and execution is taking hold. Now on to local content. I gave you the anecdote on Masked Singer at the beginning, but I just wanted to talk a little bit about that this. So Masked Singer is a Korean format, but then was a smash hit on FOX in the U.S. and we brought to Germany. And this has really been a summer fairytale for us. Masked Singer is basically celebrities competing and singing in outrageous costumes: the angel, the astronaut, the cockatoo, the monster, and all of Germany feverishly guessing who is behind those masks. We've had 7.2 million viewers on average per episode, 38.1% market share for the finale. And by the way, at that very magical moment when the astronaut was revealed, we had over 50% market share and 28.2% average per episode, 26.6 million digital views. These are numbers we certainly have not seen in this decade and numbers that usually are reserved to world championships in football. And I think it's a wonderful reminder that entertainment has unrivaled magic and power, that investing in content and playing that content across all channels is the right and winning strategy. Now on to Slide 10. We're not just entertainment, and so to contrast that thought, I'll give you a view on what we do on magazines or infotainment. We have leading brands in Germany such as Galileo; Frühstücksfernsehen, which is our good morning, Germany; red and taff and Late Night, all of them increased market shares and we reach 1 in 4, 14 to 29 years old. So if you look at the numbers on the right, those are 14 to 29-year-old audience shares. Digital viewtime across all of them is up 15%, and for example, on Late Night Berlin, 40% of all viewing is already digital. So all of them, I think, are great examples of excellent brand franchises that are meaningful and relevant in TV, but they are meaningful and relevant digitally. They capture broad, and importantly, young audiences. And maybe also this is a good reminder of the unparalleled reach all of our programs have across all channels because we reach about 65 million Germans every single week across all TV and all-digital channels. Now on to Slide 11. While I talked about viewer ratings earlier and having had the best June, Q2 and first half since 2015, I think we're just getting started. I'm really excited about the great fall lineup. We have 40 new factual and magazines; 8 new movies including the thriller, the Abandoned Village, produced by award-winning Wiedemann & Berg team; 14 new reality formats and 24 new shows. And I think Queen of Drags with Heidi Klum and produced by our very own RedSeven will be a very exciting highlight of that fall. By the way, if you look at ProSieben as a channel, we've increased own productions in primetime by 33% this year. On to Slide 12. So on the 18th of June, we launched Joyn, by the way, built in just under 1 year from scratch with completely new and world-class tech. We're 6 weeks in. It's early, but we're very happy with the early momentum that we're getting. Now I wanted to remind you of the proposition: this is the one place where with no barriers, you can access the most TV and viewing digitally. 55 live channels including the public broadcasts of ARD and ZDF. We launched with 5 originals, 40 formats, have 7 days previewing. We have about 20,000 episodes in the library and we're offering 30-day catch-up, all of this for free and frictionless. And when I meet people over dinner or breakfast, the magical moment I find is you download the app, which takes about 5 seconds, then you open the app and with 2-finger movements, you click on live TV, you click on a channel and suddenly you have TV right there where you want it. And I think that is making entertainment and TV a mobile and broad viewing experience. And while it sounds simple, it's quite magical. You can't get this anywhere else. And certainly, everyone I meet, whether it be friends or family, are hooked. Now how are the early numbers looking? Well, we've had 3.8 million monthly active users in the first month, that's 4x what 7TV had. Our stated target is to get to 10 million within 2 years and hopefully much faster than that. We've had 1.5 million uniques, almost 2.5 million app downloads. I think quite excitingly, this is a mobile-first experience and viewing is about half live and half library. What's next? We're very focused on continuing to improve the free experience by making access to Joyn ubiquitous across all platforms. We're going to load up Chromecast and remaining smart TVs through fall. We're bringing more content, more search functionality, more curation and then we are hard at work for a winter premium subscription tier launch. It's too early to give you all the details on this, but I've just had a review on this last week and I think we'll be very strong. We'll have 10-plus originals when we launch, a vast library, and amongst other things, we'll be the home of Olympics in 2020. Discovery as a partner is fully committed, and we will begin to look at expansion beyond Germany in 2020.Now going to Slide 14. So how does all of this turn into money? Well, there's a lot of things we're working on from better client-facing organization to creating total reach metrics. But the one that I really wanted to focus on, and I think is most important, is to build ability for us to hunt more euros of what in totality is a very big, vast and healthy advertising market if you want to get out of the TV advertising corner. And the secret to do that is to create large, addressable or targetable inventories. And we're making good progress on this. Number one, we have launched an addressable TV spot. In Q2, we ran 19 geo-targeted campaigns in the better version. We have about 60 client requests for the second half. Two, we're working on mixing that addressable TV inventory with addressable digital inventory, so that we can reach large enough audiences and clearly Joyn plays an oversized role in this. And then three, we've just set up the joint venture, d-force, with RTL that makes all addressable inventory across their and our infrastructure available in one place. And this, I think, makes the job for advertisers and agencies much, much easier and should really support scaling this business that we think will be a multibillion market in the future. Now on to Slide 15 and Red Arrow Studios where we've had a very strong second quarter and first half. On the production side, we saw successful international production such as Jailbirds or Vienna Blood. Jailbirds is, by the way, if I may say so the nonscripted version of Orange Is the New Black and is also running on Netflix. So if you haven't seen it, by all means, check in. In the U.K., this format was Netflix' #1 reality show and #5 of all shows very shortly after its premier. Also Studio71, our global digital player posted double-digit growth in revenues across all key markets and we're seeing important initiative in the production and podcast market with productions for Facebook Watch in the U.S. and a rising podcast business where we have now done over 40 podcasts live in the U.S. The best one, I think, is called Something Scary. It has 4.5 million monthly listeners. And again, other than numbers trying to pick up some entertainment out of this call, this is very worthwhile to check in. And if you look at our total social distribution, plus 27% growth on YouTube, plus 1.7 billion Snaps and lots of very good work across Facebook and other digital infrastructures. On to NuCom, Slide 16. I think we're well on track to create a EUR 1 billion commerce champion with NuCom. We're very focused on the 4 big consumer needs and corresponding verticals. I just wanted to give you 2 examples. So on eharmony, we're making good progress in integrating that into the PARSHIP Group. Registrations are now growing by 13% after a long period of decline. We will switch eharmony to our tech platforms in fall and have quite a confident outlook on the business. The other example I wanted to give you is Jochen Schweizer mydays. We launched a Jochen Schweizer TV show called The Dream Job that Jochen himself was looking for a new managing director for his company and all had to go through crazy challenges around the world and being Jochen, jump out of planes and all those kind of things. And while, by the way, that TV show did good, but wasn't a great success, nevertheless, it lifted the growth rate on Jochen Schweizer 2x just because there was more exposure. And I think that's another nice reminder that entertainment and commerce are very, very synergistic. And Bill Ford, GA's CEO, and I talk a lot and we're both very pleased but also excited about what we may do in the future with this business. And that's also on Slide 17, I just wanted -- you've seen this before, I just wanted to remind us that I think there's a very clear synergy case for NuCom Group and Entertainment. I've been, amongst many other things, a marketer for 25-plus years. And having at one's fingertips the awesome entertainment reach, convening and star power to fuel commerce assets is, I think, the dream of every marketer and it's something that we can be unique while our much more tech data-driven commerce businesses are helping us on the journey and entertainment, which is becoming a more consumer-facing and more tech-driven business, witness Joyn. So then on to Slide 18. I thought I'll close, but just give you an update on how we're doing across our transformational agenda. We have now completed our leadership team with Rainer joining as CFO and Nick joining as CTO. And I think we really have built a top team that has a great balance of industry experience, ProSieben know-how, but also brings fresh thinking to the opportunities and challenges ahead of us. I'm really pleased that Rainer is now onboard. It's only been a few weeks, but it feels like we've worked together for years. And he is bringing discipline, urgency and fresh thinking to our business, P&L and bottom line. On critical capabilities, as I think you saw earlier, we're really focused on building out important consumer-facing technology and addressable advertising technology, building better sales-client structures and working across a broad range of important partnerships. Partnerships are key to winning. We've been the original instigator of the European Media Alliance. We have TF1 and Mediaset as shareholders in Studio71. We have just set up the joint venture with RTL, which I really believe is an industry-first. We are the first strategic partner for Facebook Watch in Europe. We're doing Joyn together with Discovery. And indeed, we have a few other ideas and cooperations in the pipeline. Now third, I just wanted to talk about one entertainment company and structure. I think we have a unique opportunity to take the 3 pillars of our business and really make them operationally very sharp and focused. We have done that successfully with NuCom, which is operating as an end-to-end clearly structured company. And we're now doing the same with Entertainment, so that we can have an end-to-end company. We have defined the key leaders, we've defined the operating model and we will implement this in fall. As we do that, I think it also gives us an opportunity to have a leaner holding structure, and importantly, that setup will offer optionality as we look at the future of the group. But within all of that, the key is that we stay relentlessly focused on executing our organic growth agenda. And with that, I pass over to Rainer.
Thanks, Max. Good morning to all of you. Before we delve into Q2, first 6 months financials, let me start with some personal remarks. As some of you know, I have had some touchpoints with the broader media industry in the earlier part of my career. So when I got in touch with Max for the first time, I was curious to how I can help drive the change with Max and the team had set out to deliver. The more we get into detail, the more excited I got about the opportunities, good positioning, top programs, leading viewer shares, strong brands and synergistic NuCom play for ProSiebenSat.1 Media as equal. But there's also need for transformation. This needs investments to lay foundations for the future growth. It is early days, but I expect that my focus as CFO will be on 3 key areas in the coming weeks and months: first, increasing the focus on monetization, reviewing closely and driving return on investment; second, exploring more ways of driving down costs and increasing efficiencies. And third, increasing transparency to give you the tools to track the progress we make. As Max said, this is a journey, so bear with us whilst we are implementing the changes that are needed. Now to the results for the second quarter and the first 6 months 2019. Slide 20 shows that we achieved group revenue growth of 4%, both in Q2 and the first half 2019. On an organic, as defined as portfolio and currency-adjusted basis, group revenues also grew 4% in Q2, which also is the best organic performance in the group could achieve in the past 3 quarters. As you can see on this chart, we also added more details about the organic revenue performance, which should also underpin that I will attach even greater importance to this KPI going forward. Whilst revenues increased in Q2, the development of earnings was marked by the planned and already indicated investments recorded as expenses, in particular, in the Entertainment segment. About 2/3 of the adjusted EBITDA decline can be attributed to incremental P&L investments in content, digital reach and monetization. Another 1/3 primarily stems from the decline of high-margin advertising revenues. As you know, we are undergoing a big investment program in our core business. This affects this year's earnings development, but it is necessary actions, and as Max already outlined before, we see encouraging signs that these investments are paying off. Let me now continue with more color about the revenues and earnings performance of the Entertainment segment on Page 21. Entertainment segment Q2 revenues declined by 4% or EUR 27 million, which was affected by net deconsolidation effects of maxdome, 7NXT and consolidation of esome in the amount of EUR 23 million. Having said this, organic revenues only slightly declined by 0.8%, which we view as a decent performance given the still demanding TV advertising environment. After minus 6% in Q4 2018 and minus 4% in Q1 2019, Q2 shows an encouraging stabilization of the segment's underlying revenue performance. While TV core advertising revenues declined 3% in quarter 2, all other Entertainment revenues combined grew 11% organically with strong contributions of the digital and smart advertising and the distribution business. Q2 adjusted EBITDA, as expected, declined to EUR 186 million, which primarily reflects a high amount of already indicated P&L investments in program, digital platforms and monetization initiatives such as advertising technology. As Max already pointed out, these investments have started to bear fruit with a strong audience share performance in the TV business, a growing reach and usage of our digital products as an advanced and future-ready advertising technology, which will put us in the position to roll out increasingly automated and targeted advertising solutions on a broader scale. The progress also becomes visible in terms of selected operational KPIs, which you can see on Page 22. As Slide 22 shows, we achieved an overall positive performance in terms of key entertainment data points. Total video viewtime, which is a good indicator of the usage of our content across all platforms in the German-speaking market, increased by 0.3% to 257 billion minutes or 4.3 billion hours. Audience share in the target group 14 to 49 increased by 1.2 percentage points to 28.4% and the gross advertising share was also marginally up in Q2. The share of digital and smart advertising revenues, which marks the progress we are making in terms of the transformation of our advertising business increased by 2 percentage points to 8%. The number of HD subscribers further increased by 7% to 9.8 million. And last but not least, the share of Red Arrow's contribution to the local commissioned content on our TV channel portfolio has strongly increased by 5 percentage points to 24%. This development illustrates the result of our strategy to increasingly produce key local formats in-house. Please turn to Page #23. In the Content Production & Global Sales segment, we saw dynamic revenue performance of both Red Arrow's TV content production business as well as the digital Studio71. Q2 external segment revenues increased by 28%, and hence, has led to a continuing positive performance after an already strong first quarter. In terms of Red Arrow, the positive development was primarily driven by the production companies Endor, Left/Right as well as our German content production hub, RedSeven. Although not shown on the slide, internal revenues generated with our German-speaking TV operations notably increased by 67% from EUR 14 million to EUR 23 million. Again, this development shows the increasing importance of Red Arrow for our local content initiative and gives us much better control over our most successful programs. Studio71 also continued to grow strongly with an increase in revenues of 41% or EUR 17 million. The company benefited from strong growth in its key markets, Germany and the United States. Segment adjusted EBITDA amounted to EUR 9 million and reflects a less favorable revenue mix as well as cost seasonality in Q2. In the first half, however, adjusted EBITDA improved 28%, which mirrors the revenue increase and shows a stable margin development, too.Please turn with me to Page #24. The positive financial performance also becomes visible in terms of the segment's KPIs. Almost all indicators show a positive development with a dynamic increase in terms of hours being produced by Red Arrow as well as monthly minutes watched at Studio71. The latter was largely driven by a significant increase in the number of YouTube channel subscribers, which grew from 1.1 billion to 1.4 billion people globally. From my point of view, it is worth highlighting that Studio71's monthly usage worldwide has already reached almost 55% of ProSieben.1's TV channel usage in the German market. Although Studio71's monetization potential still is below the level of our TV business, I'm convinced that the company will become an increasingly important contributor for the group in the future. Let me continue with the revenue or the financial performance of the NuCom Group on Page #25. Our Commerce segment, also known as the NuCom Group, achieved revenue growth of 18% to EUR 198 million in Q2. The development was driven by double-digit growth in all verticals and benefited from consolidation effects of Aroundhome in Consumer Advice and eharmony in Matchmaking. Portfolio- and currency-adjusted revenue growth of 7%, which is mainly the result of a soft development in the Consumer Advice vertical. Here, we saw an organic revenue decline in the mid-single-digit euro million range, which is related to a volatile energy price comparison market. Whilst Q1 benefited from the insolvency of an energy provider, which led to above-average switching requests, tariff developments and limited bonus incentives currently do not foster consumer propensity to switch. All other portfolio companies combined have grown about 13% in revenues organically in Q2, which demonstrates the good progress we are seeing in the other verticals. Adjusted EBITDA on the segment increased by 8%, which is largely the result of the organic growth. The acquisitions of Aroundhome and eharmony are great strategic fits to NuCom's portfolio, but as planned, it will take time until their revenue feed through to the bottom line. Please move with me to Page #26. The operational KPIs on the Commerce segment show a positive development in every category. While the number of transactions of Consumer Advice and the number of registrations in Matchmaking have benefited from acquisitions, the strong growth of transaction in the Beauty & Lifestyle vertical of plus 35% illustrates the vibrant development we are seeing there. In order to further stimulate this already strong growth and to secure further market share gains in a rapidly expanding online beauty market, we will step up investments for Flaconi in the second half, particularly in terms of advertising as well as the expansion of the business and product. Let me now finish my part of the presentation with the confirmation of our full year financial targets on Page #27. We continue to target mid-single-digit percentage group revenue growth in full year 2019. This growth will be primarily driven by our non-TV core advertising business, which has grown 12% in the first half. This being said, we are optimistic that our group revenue target can be achieved even under consideration of a potential continued lackluster TV advertising performance. We also confirm our adjusted EBITDA margin target range of 22% to 25%. This range takes into account already announced incremental investments in the Entertainment segment of, in total, EUR 120 million as well as additional investments in our online beauty destination, Flaconi, to capture a bigger part of a dynamically growing market. Please note that the level of investments in Entertainment in Q3 will be similar to Q2 with a counterbalancing cost development in Q4. While we continue to work on cost efficiency improvements across the group, the ultimate outcome in terms of adjusted EBITDA and adjusted net income in full year 2019 will, as highlighted before, significantly depend on the TV advertising market development. Last but not least, I would like to confirm a financial leverage at the upper end of the target range by year-end 2019, which will be supported by free cash flow-driven net debt reduction. With this, I hand back to Max for closing remarks.
Thank you, Rainer. Before we go to questions, I just thought I'll give you, if nothing else, the 3 things I want you to take away. Number one, our transformation is on track. It's works in progress but with group revenue growth of plus 4%, local content paying off, digital growing 20%-plus and continued productive and synergistic diversification with NuCom and Red Arrow Studios, we are on track. Two, we are confident about the half year 2 2019. We have a very strong local content lineup, promising productions, Joyn coming of its own, the launch of addressable TV spots and further initiatives. Three, remember, it's a transformation journey. We are choosing to invest in our business to build for future growth, both top and bottom line, and total shareholder return. Thank you.
[Operator Instructions] We will now take our first question from Lisa Yang from Goldman Sachs.
I have a couple of questions, please. Firstly, I noticed you're slightly more conservative now on -- or cautious on the TV advertising outlook and expect a decline in TV advertising for the year versus flat to slightly down before. Just wondering if you could maybe quantify the level of decline that you expect and maybe what sort of assumptions you are making on the level of add-on bookings in Q4? The second question is related to that as well. I mean previously you said we should expect the EBITDA decline in Entertainment of EUR 70 million, but that was obviously based on a slightly better TV advertising environment. So just wonder if you can give us an update on EBITDA decline that you expect this year in Entertainment? And thirdly, on NuCom, to get your target of EUR 1 billion of revenue for this year, unless there's any big M&A coming in, in H2. I mean it does imply big acceleration in second half to double-digit organic growth. And so given the slowdown in Q2, I'm just wondering what gives you the confidence and what are the various drivers of that improvement in the second half?
I'll take your first question. So look, I think on TV ads, if you look at the first half, we've seen TV ads to be there or there about 3.5%. In our planning, we're making conservative assumptions and so we're making negative growth assumptions on TV ads in the second half even though the comparators are easier. And as I have said in the past, the market doesn't have a lot of forward visibility, we could end up doing better, we could end up doing a little bit worse, but I'm comfortable with our range of forecasting. And importantly, in our Q4 swing, it isn't built on an unreasonable TV advertising growth assumption. So fundamentally, we think TV advertising will continue to be weak, but as I think you've already seen in Q2 and maybe even more pronounced in July, the acceleration of digital and smart advertising is really beginning to counterweigh that in a very, very meaningful way. And we have all the confidence to continue seeing this going forward. I'll answer question three and then I'll pass over to Rainer on EBITDA. So on NuCom, look, all in, we feel very good about the NuCom portfolio. Yes. Q2, there is a specific weakness on Verivox because the energy markets are a bit compressed. Energy markets have been bumpy in the past. I mean it's fundamentally a question of how much price competition is in that market. We have a very active program that looks at Verivox for the balance of the year both on energy but also in accelerating telco and financial verticals. And we are doing incredibly well on Flaconi, have a very strong program running through the balance of the year and the same is true across the portfolio. So I think all in, our outlook is positive organically. And with that, I'll pass to Rainer on EBITDA.
Yes. Thanks, Max. Thanks, Lisa, for your question. There is no update on our EBITDA guidance up to the year-end. We see exactly what we have said before. It all depends overall on the advertising market, as Max already answered the question, when you look on the -- when you asked the question for the TV outlook and the advertising market for the full year.
Our next question comes from Annick Maas from Exane BNP Paribas.
My first question is you've announced last year a share buyback, which was never completed. Now given the share price is quite weak actually these days, I was wondering if that could potentially be an opportunity for you to relaunch that share buyback? My second question is on Mediaset, if we just could get a view on how you plan to cooperate with Mediaset? And then finally, can you repeat the July numbers you gave on the call? And also maybe give us indication on the August TV ad trends given you don't have the World Cup comps at that stage?
Yes. Let me answer on the share buyback. First of all, we are not happy with that share price development overall, obviously not. But on the other side, we also have to see what kind of opportunities we will have in the future and the share buyback is always -- it's a good signal for our investors for sure. You know that we believe in our shares, but also can send other signals that you believe that there is potential in the company. And for instance, I already can announce because I will do it tomorrow, that I will buy some shares, too. And that's the reason why we are not planning currently to look on the share buyback program.
Your second question, Annick, on Mediaset. Well, look, we have a long-standing good relationship with Mediaset, as we do across the European Media Alliance, which we set up many years ago. In fact, both Mediaset and TF1 are shareholders in Studio71, our global digital video player. And we have constant conversations where there may be growth and synergy opportunities, and I think I've mentioned this in the past, mainly in the areas of streaming technology, advertising technology and opportunities to expand European growth across some of our NuCom assets. And let's see what the future brings. On three, August ad trends, that's the crystal ball question because then the next question becomes what is September and what is Q4, it's all very hard to tell. But we are comfortable I think with the way we're forecasting the business and we're comfortable with the guidance that we're providing for the year, and I think would not want to comment further than that. Thank you very much.
Can you just repeat the numbers of July that you've given during the call, they were quite quick so...
Yes. I'm happy to do that. So July is plus 8% Entertainment and total advertising growth with plus 4% underlying TV advertising growth and plus 68% digital and smart advertising growth. I will say that July is both a small month and I think you made the point, Annick, the comparators are a bit easier. So I think it's encouraging, but I wouldn't -- I'd be cautious and I wouldn't run away with those numbers either.
Our next question comes from Chris Johnen from HSBC.
I would like to take them one by one. First, Rainer, maybe some additional comments on your first 5 weeks. How do you view, if you can say something, the group's leverage targets, the dividend policy, the current group structure. Maybe some additional comments would be appreciated.
And you're totally right, these are my first 5 weeks, and for sure, you look at everything. Leverage targets, I already outlined that in my outlook. We believe that we will be at the year-end to the higher end, approximately at 2.5x net debt-to-EBITDA. Dividend policy is in place, and that's what we have to accept and it's fine. And the group structure, Max already outlined several times that we are working on getting it overall more in their segment areas and that we will separate Entertainment to make it more efficient and that's clearly something where, I believe, this is the right way. And all the things, which I found here, are well thought and I'm very optimistic that it will help us to drive the company to a better future if we go this path consequently, and that's exactly what we're doing here.
If I may follow up on that. I mean I understand the comment on leverage for '19. But would you say it is too early for you to comment on whether you think the leverage target is actually sensible or whether there could be a potential change in view? I mean same about the dividend policy, you say it's in place and we have to accept it and it's fine, but that doesn't necessarily sound as if you are behind it, to be honest.
I am behind it. And the targets are existing and that's reason why I would like to mention it because at the end of the day, if you want to change it, then you change it. But this is not our target. So dividend policy is intact, that has been changed. It's fine. And the leverage target is also something where you always -- which we also feel -- where we feel comfortable with. And again, that's also something when you work further down and for sure our target is to reduce the leverage target from the 2.5x further down, but you always have to look, and that's what we also do. We look on opportunities and if there are opportunities, then you have to discuss it at that time when it's happening.
Okay. That's clear. Second question on Joyn. How should we think about the ad load comparables, specifically to 7TV? I mean is it fair to say that, let's say, with 3x the amount of traffic, we are basically looking at 3x the amount of volume? And then related to that on your smart advertising on smart TVs. I noticed that on Samsung, there is still, to date, no advertising shown on Joyn. Obviously, I think that's a temporary thing. Do we have any sort of idea on when Samsung will greenlight the pre-rolls and what sort of impact would you expect that to have given that -- I mean July, plus 68%. I would assume Joyn plays a major role in that. If you could comment on that?
Yes. So I think all in all it's still early days on Joyn, but I think we're pleased with the launch. Your comment on Samsung is right. We are, because it's complex, working through every technical access infrastructure so that we can have ubiquity in people's ability to access Joyn. So we've just uploaded Apple TV, for example, and there are some technical issues with Samsung that are temporary and I would expect we'll solve as we flow through the quarter. I think in advertising loads, we're, shall I say, smarter and more educated than we were on 7TV before. We also have much better technology. So 7TV I think was very annoying at times because you got the same ads and so forth. So we're balancing monetizing well and I think you can see this in the July numbers. But also let me be very clear that, for the moment, we're really focused on building up our user base, and so it's not quite 3x but not terribly far off. And that was it on a Joyn or did I miss a piece?
Yes. Maybe and add one on the Eurosport player and Discovery basically giving the rights away to the zone. I mean does that change...
Yes. Yes. Look, that was a deliberate joint decision discussed amongst us and it was a very simple choice that we felt just having Bundesliga Friday games isn't fundamentally big enough to make a massive difference. And so our joint choice was that selling that off and then using that money to double down on originals and content is a better strategy. We are looking at our sports strategy going forward. And as I think I commented earlier, 2020 is the year of the Olympics. Via Discovery, we have all the Olympics rights and maybe that will be a good kickoff and harbinger of more things to come.
Our next question comes from Omar Sheikh from Morgan Stanley.
I've got 3 questions, if I could. So Max, maybe not only focusing on the TV business, I'm going to start off with a question on NuCom. Obviously, you've given it a little bit of color on the top line for this year. I wonder if you could just clarify the investment that you flagged in Flaconi and whether that would be incremental or self-funded, so maybe just a bit of profit guidance on NuCom, that would be helpful. That's the first question. And secondly, I wanted to just talk about Joyn. You previously indicated an investment -- or net investment of EUR 50 million for 2019. In the context the initial traction you've got, how should we think about the investment next year? Do you think that will be similar level, the same or any higher? That's the second question. And then finally, want to just check that I understand the guidance for the full year. You said -- previously, you said that it's based on advertising stable to slightly declining and you've obviously clarified that a little bit in your comments so far. But are you sort of implicitly saying that the non-TV advertising parts of your business are growing a little bit faster than you previously expected and therefore you've reiterated the guidance? Or is there some other interpretation?
So on NuCom, look, we're making on top investments in Flaconi I think to the tune of EUR 10 million, somewhere or thereabouts. And that's really because we think we have a fantastic growth case. We're growing 40%. We're, by the way, now expanding in Poland. Beauty, Commerce is still massively underdeveloped. We have more opportunities to link an asset like Flaconi into the access that we have to influencer communities. We're looking at creating broader private label offerings and so forth. So we're just really working this all out and I think it's a good example of the kind of growth, energy and excitement we can get out of NuCom. On Joyn, we would, and I think that's what we've guided before, there or thereabout see similar investment levels in 2020. On 2019 guidance, the guidance I think is what it is and it's the range that we have provided. There are many moving pieces. And I think we have, as best as we know, I think a reasonably conservative view on TV advertising, and we are doing well in accelerating our digital footprint. And then if I may, Omar, given you are the most prominent sector bear, which, by the way, I think is entirely legitimate, but I always look at it and I think, look, there is -- for us to win in entertainment, we have to fundamentally -- we work out or prove 2 points: number one we need to prove that we can capture more viewers in the future, and while that's a work in progress, I think we're beginning to do that if you look at our total viewer shares and if you look at the total amount of minutes that are being consumed; and number two, we have to prove out that we can overcompensate what may very well be a structural decline in TV advertising with more digital advertising stage. One, and again, we're beginning to do that not completely but I think you can see the trends. And then stage 2, with smarter advertising products that access more of the market, and by the way, monetize better for us. And again, you can see that we're beginning to do that, which is also why you see Rainer and me continuing to put our personal money in this business because we believe in it.
Okay. That's -- I understand that math. Just maybe I could follow up then on -- in that context on Joyn. if you're trying to grow off-line viewers or viewers outside of traditional linear television, do you think the EUR 50 million investment per annum in that platform is enough? If you are looking to build a platform with scale, do you think there's scope for you to invest more?
Well, the EUR 50 million are the net loss, and by the way, there's 2 partners. So that's 2x EUR 50 million net loss. If you look at the absolute investments flowing in, they are significantly above that. I'd actually have to look up the number, but whilst maybe if you look at the total investments, they truly are 2 to 3x that.
Omar, Ralf speaking. Obviously, as you can assume, Joyn is a business with revenues in excess of EUR 100 million already. And when you then compare this to the net loss, which, in total, is roundabout EUR 100 million, you can see that we have a substantial investment jointly with Discovery into the venture. And we believe, according to what we plan, that this will suffice.
Actually, let me -- because it's a really fair question, are you putting enough firepower into the site? I think the other thing that we're doing is we are uniquely using the broader entertainment infrastructure that we have to feed and drive Joyn, whether that is trailers that are saying after you've watched an episode on Monday evening, if you want to see the next episode, you can see it live on Joyn right now instead of waiting until next week, whether that is cross-wiring fan communities or whether it is making our staff available. So there's both, if you want monetary -- tangible money, but there's a lot that we are feeding in that doesn't show up in the P&L. But at the end of the day, if somebody else did it, it would cost tens and tens of millions.
Our next question comes from Adrien de Saint Hilaire from Bank of America.
So I've got a few of them, please. So Max, you mentioned the fact that your first half was the best since 2015 in terms of market share. Just wondering if you could make this analysis looking at the absolute viewing time. I mean how does H1 '19 compare to previous years? Secondly, you mentioned 68% growth in digital and smart advertising in July. Is it fair to assume that now that the d-force joint venture has been approved, growth would accelerate from that level? And then thirdly, maybe a question for Rainer as well. You did a deal with General Atlantic a couple of years ago, valuing Commerce at EUR 1.8 billion. Obviously, that doesn't seem to be the number, which the market retains right now. So would you consider other, let's say, value-crystallization opportunities around Commerce or around other assets?
Thank you very much, Adrien. So on your first question, I think on absolute viewing time, given linear viewing is declining, if you were to compare the numbers in absolute viewing, it'd probably be 5% to 10% below. The bit that I think is really interesting to me is as we started to measure total video viewtime -- and by the way, we're working hard on measuring net reach across all channels and platforms, but it's actually quite difficult so we just don't have those numbers yet. But for me, that's a really important metric because, fundamentally, my view is, in entertainment we are in the business of producing great content that people want to see and the first measure of success is are more people seeing it. And I'm very agnostic on whether they're seeing it in a linear viewing experience or Joyn digitally or whatever, and I think that's quite a meaningful important proof point. On your second question on digital and smart ad growth. So yes, you crossed the wire. I was going to make a comment on this. So the cartel authorities have approved the RTL d-force joint venture with us, which I think is a really good and encouraging sign because it creates a really important infrastructure point in the market where advertisers and agencies can now access the totality of addressable and smart inventory across TV and across digital and across the RTL universe and the ProSiebenSat.1's universe in one place. And I think in scaling that, that will be very meaningful, and yes, I think underpins a continued positive outlook on digital and smart advertising growth. 68% is a big number. I think if you look at the first half at 26%, would we expect that 26% to accelerate in the second half? The answer is yes to -- but I don't want to quantify that number. On NuCom valuation. Look, we are, just as on entertainment, I think we're very focused in operationalizing NuCom. We've done a lot of work there. I think we have put very good teams in place. We have a very clear strategy around what the consumer needs and verticals. We have absorbed and bolted on a number of businesses and we're beginning to turn yield and growth on those. And so I think all of that is progressing very well. As I have said in the past, at the right moment in the future, we will look at value-crystallization opportunities and the most obvious being at some point in time to IPO NuCom and/or IPO asset clusters within those. But for the moment, we're in executing and operating mode.
Our next question comes from Laurie Davison from Deutsche Bank.
Three questions from me, please. First, just a question on advertising. Dentsu have just missed numbers and cut guidance today, specifically on multinationals advertising into Asia. I'm just wondering whether you've seen any deterioration within the mix of the advertising you've reported from multinationals starting to cut back in July and August. Second question for Rainer. M&A is back up again. You've spent EUR 101 million in the first half. Previous CFO's talked about ongoing M&A of around EUR 200 million, but you were quite significantly below that last year. So are you going to -- should we be thinking that M&A spend on a recurring basis is going back up to the kind of EUR 200 million level on a full year basis? And lastly, another question for Rainer. If advertising were to significantly deteriorate in the second half, what would be sacrificed, the dividends, the Joyn investment, programming spend or M&A?
Laurie, I will take the first one. I used to spend a lot of time in Asia, but where multinationals are going in Asia, I think, have little impact on what is happening here. Look, as I said before, the advertising market has little visibility. There are some sectors that are strong and weak, but we don't see any accelerating signals. I'll give you an example. I mean Automotive has been a weaker part of that market, certainly last year and this year, but there's actually some momentum coming in because both VW and BMW are launching big e-mobility campaigns and we're participating in those. So it's just -- the point I'm trying to make is it's incredibly difficult to manage or forecast market because at the end of the day, it's an aggregation of individual players in the industry. And as I said before, we are comfortable, I think, with the guidance range and forecasting that we have put in for the year.
So let me answer the second question. M&A, honestly, I don't want to put out a number in the market because it's opportunity-driven. When we have something which is attractive, then we will look into it and then we decide based on numbers, very disciplined: if we can do it, if we want to do it and if it creates value for the company overall. And that the only thing I would like to say to that.
And just, by the way, on the EUR 100 million, to make a comment, I think they're quarter-on-quarter good EUR 100 million. We've used them to take over minority shareholders that we had in Studio71 and we have a strong belief set on Studio71 and we're one of the top 3 global digital video players. I just had a long meeting with the global YouTube and Google executives on what we might do more and so I think that's money very well spent. We have taken out minority shareholders on Virtual Minds. And let me remind you that Active Agent is the technology engine that is driving our RTL joint venture. And so again, that to me feels like very value-accretive money being spent. And then the third is we bought Regiondo, which is an important component of taking our Experience business to the next level. Because Experiences are one of the fastest-growing and mostly highly valued sectors globally and we have a pole position and we want to be the ones that enable people in Germany at base to book any experience they want, anywhere and at any point in time and Regiondo is adding very important capabilities for us to do so.
And the last question is a difficult one because at the end of the day, our belief is that we reach our numbers at the year-end, that's the reason we've reiterated our guidance, from a margin point of view for the EBITDA margin, between 22% and 25%. And I feel comfortable, and that's for sure, what you do when you come new onboard, you look on the current analyst forecasts and I've seen that the most of the analysts have an EBITDA margin between 22% and 23%. And here, overall, I feel comfortable. So whatever happens, we -- and Max already said that in his speech, we reiterated that in our outlook statement also for the top line with a mid-single-digit growth number, we feel also comfortable. So therefore, for me it's more or less that we have to deliver on what we promised, and that's exactly how I would like to play it. And if there's something new to tell, then we will discuss it.
Okay. But just in terms of priorities here, what comes first out of those four?
Overall, as I said, there is always a mixture between things and then we have to see what is necessary, what is not necessary. Again, we feel comfortable with our guidance for the year-end.
Our next question comes from Patrick Schmidt from Warburg Research.
Maybe a quick follow-up on your M&A strategy I mean what is your leftover firepower for H2? I mean you said it's opportunity-driven, but do you actually have any opportunities in H2 looking at your leverage ratio and targets for the full year will be the first question. And then secondly, where do you see your long -- or let's say midterm profitability in your Entertainment segment? I mean we're obviously all aware that you, at the moment, are investing heavily into advertising technology and content, et cetera. But do you see, for example, let's say, overall higher production costs, especially when you compare yourselves, let's say, 5 years ago when you mainly broadcasted U.S. content? And lastly, it's just a quick follow-up on -- regarding Joyn and the Discovery bit that they sold the Bundesliga rights. Were you aware of that when you got into that cooperation because I think it's one of the most attractive assets you have for a potential premium or a potential, let's say, paying customers for your plans in winter?
So for the M&A strategy and firepower, for sure, it all depends on the EBITDA which you are buying it's a multi -- it's a calculation game. On the other side, our guidance at the upper end of the 2.5x is based on low M&A further on. So we have to see what's happening and then it's opportunity-driven. And if you find something, which is attractive, then we have to discuss it. But currently, I would say we feel comfortable with our guidance. And on top of that what I said at the beginning, it's opportunity-driven. Second question, long and midterm profitability in Entertainment. First of all, we focus on the year-end numbers. As you all know, that's difficult enough what we have discussed already. In that case, that we have fundamentally to prove that we get up in Q4 our numbers and that's based on the advertising market. We have mentioned that several times during this call. Again, we feel comfortable and we take it from there in March then.
The -- just to add one point on Entertainment. So yes, there are elements where we are adding costs because we're creating more locally meaningful programs and there's some degree of program inflation, I guess, going forward. But at the same point in time, as our reach becomes targetable, that reach is a lot more valuable. So I'm a very big believer also that in the long term, mid- to long term, profitability in Entertainment can and will be very attractive. On Joyn, yes, that was a complete joint-up discussion with Discovery and we decided that together, not because Bundesliga is not attractive, it's terribly attractive, but it's only the Friday games. And so it's a too thin slice we felt relative to the cost to make a big difference and so we jointly decided to use that money and double down on original content creation and then work on a sport strategy I think really kicking in gear with the Olympics next year.
All right. Maybe just a quick follow-up on Entertainment again. So you feel comfortable that you can reach, let's say, historical margins within that segment in the mid- to long term?
Overall, we are not margin-driven in that case. We are more the absolute number, which is relevant for us at the year-end.
Okay. Understand the point of the year-end, but I'm talking about the midterm, so let's say next 3 to 5 years?
It is too early to forecast that right now. Let's finish the year and then we will discuss it again. But again, we are more looking on the absolute number like I also did it in the past because that's relevant because that's generating cash flow and that's generating profitability and opportunities also for the future.
Our next question comes from Sarah Simon from Berenberg.
I've got just 3 quick ones. Firstly, just on Joyn, Max, I think you said, but can you just confirm, that the 68% growth in July is not really coming from Joyn because you haven't started to push the monetization. It's more about kind of core online as opposed to Joyn. Second one was just on d-force. Can you give us a quick rundown of what that actually means in terms of the commercial offer? And then the third one was just on Studio71. How much of the revenues of Studio71 are coming from Germany?
So on Joyn, no. The 68% in July are meaningfully impacted by the launch of Joyn and so I think it's actually a positive sign that Joyn is beginning to impact the expansion of our digital growth strategy. On Studio71, Germany is there or thereabouts 25% of the global footprint, no? Mid-double-digit million, thank you. And on d-force, well, look, what it means in terms of commercial offer is that -- and we're in the midst of working kind of bringing this alive technically, but it fundamentally means that we're able to make addressable TV, addressable/targetable digital inventory available across the infrastructure that RTL has in our infrastructure, put that together and offer that to clients. And we have about, I think, 60 clients or so that have an initial interest. Then as these things go, first, we needed to set it up, which we've done. We needed approval, which we've done. Now we need to start going live, and I think as we go live and we get into Q3 and into the future, we will begin giving you more detail and more numbers on how that is going.
But -- so presumably, you've got 2 separate sales forces, but sharing of the infrastructure. Is that the way we should think about it so that there's one interface for the buyer?
No. It's a programmatic platform. So the inventory is already ingested. Of course, the pricing is set completely independent by both companies. But I can that -- I have one programmatic base where I can access all the inventory and that makes it much, much easier, much faster and less complicated for clients and agencies to access addressable and smart inventories.
Our last question comes from Richard Eary from UBS.
Just 4 actually quick questions. First one, Max, just in terms of you've mentioned total viewtime a number of times in the presentation and it was sort of encouraging to see the fact that, that actually had stabilized. Can you actually give us a sort of breakdown in terms of total viewtime between linear and nonlinear so we can actually track that performance, so we can understand how that relates to the advertising share that you've given on that slide as well? That's the first question. The second question you talked about obviously some initial programmatic sales, which I think you said you'd already done 18 sales, but obviously potentially 60 in the second half. Can we talk about the pricing of that in terms of those 19 geo campaigns and what the pricing differentials were so we can understand that. The third question is on Joyn. I think I heard correctly that you talked about the potential to grow that geographically. I don't know whether you can expand on that or whether it's too soon to do so. And then just, Rainer, just on -- the last question just on guidance I know this has probably been asked in several different ways. But just to be clear: the historical guidance we've talked about is a EUR 50 million EBITDA impact this year on the consolidated numbers. But with the Flaconi investments of EUR 10 million that was mentioned on the call, should we now think that widens from EUR 50 million to EUR 60 million or is there something that I've missed? So they are the 4 questions.
So let me take your first 3. On total viewtime, so if you take on total viewtime, if you want the amount of linear decline and then you look at how we are filling up relative to that linear decline, then 2/3 of that is the growth in market audience share and about 1/3 is the growth in digital. And by the way, if you recall one of the KPI pages, if you look at our total footprint, about 8% I think is now digital. And on the one hand, one could say, well, that's really small, shouldn't it a bigger, and the answer is yes. But I think it's a fantastic opportunity because it also shows how much scalability we still have going forward. On programmatic sales, pricing of campaigns, I don't want to comment on specifically. Yes, all in, we think as campaigns become addressable, there is pricing opportunity to the tune of 50% to 100%. But for the moment, we're really just focused on scaling that business. And it's a very new thing in Germany, helping our client partners and our agency partners understand what it is we have to offer and scale up. And on Joyn, potential growth geographically, the answer is yes. We have 2 big European media players that have expressed strong interest to think about and look with us whether this could travel beyond. I think the answer here is one of timing and sequencing. We're very, very focused in completing the build-out of our AVOD and free offering. We're very focused in putting the premium layer together for a launch in winter and that is absorbing 100% of the energy and the team that we have available. As and when that is done, we will begin taking a look at when, how and with what kind of structure we might look at opportunities beyond our core markets.
Max, can I just ask a quick follow-up, just go back to that Slide 22 in the deck with total viewtime, 257 billion minutes of that. What is the actual breakdown of that in terms of digital versus linear to compare with the 92% and 8% basically for core advertisers on hand, digital and smart?
Yes. Richard, it's Dirk speaking. Just a quick comment here. You see on the same slide also the daily linear TV consumption, which was down 2%. And this obviously has affected the whole market. And in the total market, we have gained audience share, which is, let's say, 2 -- roundabout 2/3 of linear TV viewing gains we have achieved by audience share gains. The rest basically why we are up in total is the rights from our digital assets as well as Studio71 in Germany, but it's not including Studio71's global business. But we did -- yes, go ahead, Max.
No, I was just going to make a comment because all of you look at linear viewing numbers, which continue to show a decline and one would think sometimes that decline has accelerated. You have got to be a bit careful with those numbers because, for example, they don't measure at all today what viewing is caught on streaming platforms and so forth. So that's why we're now looking increasingly at total video viewtime so the total amount of what's being consumed and then the measure that we're working hard on is to be able to look at total reach and then be able to unduplicate that reach across everything because I think that's the truest view of how many people are watching our stuff and whether they're doing that in linear or digital experience, I'm completely agnostic to.
So let me answer your last question. I'm pleased to take into account that everything, which we have already announced, especially the incremental investments in our Entertainment segment of the approximately EUR 120 million as well as the additional investments in our online beauty destination, Flaconi, are part of our guidance range, which we have given out. And also have in mind again that the level of investments in Entertainment in Q3 will be approximately similar to our Q2 investments. And then we have to counterbalance these investments with cost development in Q4. And that's also one of the things we are working on is cost efficiency improvements across the group. And for sure, the ultimate outcome in terms of adjusted EBITDA and adjusted net income in the full year 2019 will depend significantly on the TV advertising markets development for the year-end. So therefore, yes. The extra investments of whatever the number will be, EUR 10 million, $20 million for Flaconi, will impact the year, but it's all included in our guidance. And again, I feel comfortable with the numbers, which we have seen margin-wide between 22% and 23% from the analysts, which we can see currently.
Okay. Ladies and gentlemen, this was the last question for the call. We thank you for your participation and if you have any follow-ups, please do not hesitate to get in touch with Dirk and team. And with this, we wish you a very good day. Thank you.
This concludes today's conference. Thank you all for your participation. You may now disconnect.