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Good morning, ladies and gentlemen. Welcome to the Quarter 2 2020 H1 Results Call of ProSiebenSat.1 Media SE. This conference is being recorded. Today's call is hosted by Mr. Dirk Voigtländer. Please go ahead, sir.
Good morning, ladies and gentlemen, and welcome also from myself to our Q2 2020 results conference call. Today's call is hosted by Rainer Beaujean, Chairman of the Executive Board and Group CFO, as well as Ralf Gierig, our Deputy CFO of the group. As always, Rainer and Ralf will first lead you through the presentation and provide an update on the operational development as well as the group's financial performance. The presentation will be followed by a Q&A session. Web links, dial-ins and the presentation material were made available via e-mail sent out this morning. With these opening remarks, I now hand over to Rainer.
Thank you, Dirk. Good morning also from my side, and thank you for joining today's analyst and investor call.Today will be about ProSiebenSat.1's result in the second quarter and the first half of 2020. COVID-19 is still a quite predominant element of our lives socially as well as economically. But the situation has clearly brightened compared to the last time we spoke. As discussed in our Q1 call, my Executive Board colleagues, Christine Scheffler, Wolfgang Link and I had implemented an immediate action plan early on to mitigate the COVID-19 impact on our company. We have thus provided for a stable liquidity and financing situation, and first results of our cost management actions are already visible. And the good news is that after the easing of the lockdown measures in our core markets, Germany, Austria and Switzerland, signs of recovery are increasing in the economy as well as in our advertising business. I will follow up on this with more details a little bit later. First, let's see what we have on our agenda for today. We will start with a quick overview of the status quo in Germany and the conditions under which we are currently operating our business. We then continue with our group financials regarding the first 6 months and the past quarter. All developments came in as expected. Thus, it will come as no surprise that the COVID-19 effect hit us in quarter 2. And we will finish this presentation with an operational update on some of our key projects, reflecting how we push our strategy forward. And of course, I will also comment on the first outlook regarding July and August. Our crystal ball for the months after is still unclear. Let's start on Slide #3. How has the COVID-19 pandemic been developing in Germany? Daily new infections had its peak in March and April. Since then, the infection rate has been significantly slowing down. As already mentioned in our Q1 call, the German government is doing a great job in managing this crisis and keeping the situation under control. This is certainly due to the well-equipped health system, also in international comparison, and due to the sound budgetary management of the parties. The government was thus able to quickly offer a far-reaching financial support package, including a VAT reduction until the end of the year. All this has been leading to a more optimistic economic picture today. After easing the lockdown measures in May, the mood against German consumers -- amongst German consumers and executives has brightened. According to the ifo Institute, business expectation among German companies rose from its 69.5 points low in April to 97 points by the end of July. Consumer mood in Germany is also recovering, thanks to the rapid reopening of the German economy and society, both economic and income expectations as well as propensity to buy are rising. As a result, GfK Consumer Climate Index forecast figured -- a figure of minus 9.6 points for July. This is 9 points higher than its level in June. In short, in our key core markets of Germany, Austria and Switzerland, the crisis has been managed very well so far, and economic indicators are beginning to brighten. This also supports the recovery of the advertising business. We are seeing the first positive trend in July and expect July advertising revenues to decline by slightly less than 20% compared to the previous year. And that's a much smaller decline than in the past quarter. And there are also signs of a further improvement in August. We see currently an improvement to around minus 10% compared to last year. But please have in mind that July and August are very small months. Most relevant are the months from September to December. We are thus moving in the right direction. Luckily, we do not depend on export business and are, therefore, less vulnerable to the continuing economic upheavals overseas. Nevertheless, it is clear that all forecasts have to be treated with caution as everything depends on the further development of the pandemic. But now let's dive deeper into our development in the second quarter and first half of 2020. On Slide 4, you can see that we have positive and negative developments across our segments in a COVID-19-influenced environment. On the one hand, we see positive impacts for some of our assets. The last few months have shown that television usage has increased strongly, both in our linear and nonlinear platforms, because we offer exactly what viewers are looking for: regular, reliable infotainment and big entertainment, and this is reflected by an increased reach and viewing time in the last months. Total Video Viewtime, which means minutes that viewers consume our content on all our platforms, rose by a strong 7% in the second quarter. We see equal growth rates in terms of daily TV consumption and daily net viewers. Especially important, we increased our prime time market share in the first 6 months for the fourth consecutive half year, and we all know that prime time is the most valuable TV time slot for advertisers. This clearly shows that our focus on local and live, especially at prime time, pays off. Also, our digital offerings are gaining viewers, which is underlined by 4% more unique users for our channel website. And our digital Studio71 records excellent figures with its influencers and web content. We see a plus of 22% in video views in the second quarter compared to the previous year. Overall, we are reaching a total of 11.8 billion video views. But like all other media companies, we are in a paradoxical situation. While our content offerings were extremely successful these past months, advertisers had postponed their campaigns or reduced their spending due to the COVID-19 impact on their own business. You can see on the slide that in the second quarter, TV was facing advertising reductions of up to 80%, depending on the respective industries, with the tourism sector, unsurprisingly, showing the sharpest decline. And as you will see later on in our financials, this trend, of course, also impacted our advertising revenues considerably. But our sales colleagues have been working tirelessly since the beginning of the crisis to stay close to the customers, to find individual solutions for them and to put together appropriate advertising packages for their situation. After the VAT reduction, for example, they have targeted precisely those companies that want to pass on the tax reduction to their customers and communicate this via advertising. In general, we are also seeing that the strengthened cooperation between our sales colleagues and the program teams under one roof, within the SevenOne Entertainment Group, is starting to pay off. Besides the advertising business, also our production segment suffered from the COVID-19-related lockdown measures. Postponements or cancellations of scheduled productions across the globe resulted in 28% fewer hours that the Red Arrow colleagues produced during the second quarter compared to the previous year. In this challenging environment, we clearly benefited from our diversified portfolio, thanks to NuCom Group. Some examples. The online beauty provider, Flaconi, increased its revenues in the second quarter by a very strong 68% year-on-year. And our matchmaking service, Parship Group, proved especially resilient with the first time customers' revenues growing by 46%. With these positive developments, we were able to compensate for the most difficult situation in NuCom Group companies, such as SilverTours, Jochen Schweizer mydays and Aroundhome. These businesses were significantly affected due to lockdown effects on the traveling and experiences industry. With this, I hand over to my Deputy CFO, Ralf Gierig, who will provide deeper insights into the financial implications of these developments and discuss of our group financials with you.
Thank you, Rainer, and good morning also from my side. I would like now to continue with an update of our Q2 and H1 2020 financial performance, our balance sheet as well as where we stand in terms of the targeted cost savings to cope with the COVID-19 crisis. Please turn to Page 6 for an overview of our segment revenue performances. Thanks to a well-diversified portfolio of ProSiebenSat.1 and, in particular, the growth of NuCom Group, the impact of the COVID-19 crisis on the group's revenue performance was less pronounced in revenues than it would have been otherwise. This said, group revenues decreased by 25% to EUR 709 million in Q2, while the SevenOne Entertainment Group and the content production business of Red Arrow Studios saw a revenue decline of 34% and 31% in Q2, respectively. The NuCom Group, as a whole, showed resilience in terms of its top line development and posted a very satisfying plus 5% growth. As already indicated in the Q1 results conference call, we saw a very muted advertising environment in the second quarter as our advertising customers showed reluctance to spend as they experienced significant revenue and earnings shortfalls, too. Despite lockdown measures having started to be eased during Q2 in Germany, the second quarter, therefore, still showed a decline in advertising revenues of 37% to EUR 323 million. Given the better development in Q1, the decline of advertising revenues in the first half is limited to minus 21%. On the positive side, the largely subscription-based distribution business has continued to grow dynamically by 9%, both in Q2 and H1 2020. Revenues in the SevenOne Entertainment Group reached EUR 398 million in Q2 and EUR 961 million in H1. At the same time, the production business, especially in the U.S. and the U.K., has been meaningfully affected by the lockdown and by the still difficult situation in these countries regarding COVID-19. As a result, Red Arrow Studios' revenues dropped by 31% to EUR 102 million in Q2, which can mainly be attributed to lower production revenues. On a first half year basis, segment revenues fell by 17% to EUR 236 million. I would like to highlight the comparatively strong performance of NuCom Group, which illustrates the importance of diversification for our group. NuCom Group revenues grew 5%, both on an organic and reported basis, to EUR 209 million in Q2 2020. Although the Consumer Advice and Experiences businesses declined notably due to the negative effects of COVID-19 on their businesses, the Matchmaking and Beauty & Lifestyle business more than compensated this development. We are, in particular, very satisfied with the strong growth of the Matchmaking business as this is not only demonstrated -- as this not only demonstrated its resilience in the crisis, but also shows the successful turnaround of eharmony in the U.S. In the Beauty & Lifestyle business, Flaconi stood out with exceptional revenue growth resulting from strong demand for online shopping of beauty, hygiene and cosmetic products. Let me now tell you how our operating profitability has developed. Please turn to Page 7. As we indicated in our Q1 results conference call, the SevenOne Entertainment Group was expected to see the most pronounced decline in adjusted EBITDA across the group due to the significantly higher level of fixed cost in its business compared to the other 2 segments. Page 7 shows that adjusted EBITDA of the SevenOne Entertainment Group declined to EUR 13 million in Q2, as well as EUR 155 million in H1, respectively. Red Arrow Studios achieved an adjusted EBITDA contribution of EUR 1 million in Q2. This also marks a pronounced decline compared to the prior year as the lockdown measures prevented us from producing as planned. Please bear in mind that we largely recognize revenues and thus resulting EBITDA contributions in accordance with IFRS based on the percentage of completion method. Although the NuCom Group has achieved solid revenue growth, the adjusted EBITDA declined by around EUR 4 million in Q2. This can be attributed to an earnings decrease of the high-margin car rental platform, billiger-mietwagen. The good news is that we have seen billiger-mietwagen slowly coming back in July as the easing of lockdown measures in the -- is having first positive effects. Lastly, the reconciliation result, which also includes the holding costs, reduced by EUR 7 million to only minus EUR 3 million in Q2 2020. Please now turn to Page 8. Since the group adjusted EBITDA only shows EUR 23 million in Q2 because of COVID-19, the EBIT reported net income and adjusted net income metrics reflect this development accordingly. Taxes made the biggest difference in the development of the adjusted net income compared to adjusted EBITDA. Adjusted net income amounted to minus EUR 52 million in Q2 and the still positive EUR 7 million in H1 2020. The fact that our free cash flow before M&A declined notably less than the adjusted net income shows the impact of our cash management efforts. Let me now continue with additional comments regarding already achieved and still targeted cost savings in H2 2020 on the next slide. In the second quarter, the focus was on getting planned cost savings measures on track. For example, we introduced short-time work in the holding of the group areas as well as in all segments where the business was negatively affected by the COVID-19 crisis. As the chart on Page 9 shows, costs across the group reduced meaningfully, with selling and administrative expenses combined down by almost EUR 50 million in Q2 compared to Q1 2020. In comparison to the prior year, these costs were reduced by EUR 26 million. Although cost of sales also declined meaningfully, this can largely be attributed to lower revenues. In terms of the already indicated reduction of programming costs, we expect the bulk of these savings to be realized in the second half of this year. Please be reminded that, originally, we had planned to increase programming expenses by EUR 50 million in 2020. Along with the crisis, we have decided to lower our program cost by EUR 50 million, which represents a swing of EUR 100 million compared to the initial plan. Let us now discuss the development of group net debt on Page 10. The group's net debt at the end of the second quarter was EUR 2.353 billion. This is a slight increase of EUR 108 million compared to year-end 2019 and a reduction of EUR 161 million compared to the end of Q2 last year. This reduction can largely be attributed to the nonpayment of dividends in June of this year. Please be reminded, dividend payment made in June of last year amounted to EUR 269 million.As already mentioned in the Q1 2020 results conference call, we have drawn the available RCF in the amount of EUR 350 million in early April to further strengthen our liquidity position and to ensure that we have access to our liquidity reserves. Under consideration of the already available cash position as well as the free cash flow development in Q2, we report a cash position of almost EUR 1.2 billion as per the end of June. Versus end of Q1, and pro forma, the EUR 350 million RCF drawdown, we only lost about EUR 60 million of cash on balance sheet in the second quarter. In light of the COVID-19 crisis, this is a very good outcome, underpinned by our cash management efforts. Due to the COVID-19-related decline in adjusted EBITDA in H1, the group financial leverage increased to 3.6x. This being said, we remain fully committed to returning to our financial leverage target range of 1.5 to 2.5x as soon as possible through a targeted earnings improvement, better operating cash flows as well as potential proceeds from future asset disposals. With this, I hand to Rainer for the operational update.
Thank you, Ralf. As just shown, the influence of COVID-19 on our second quarter results was significant but, overall, as expected and the development that we have countered with a very disciplined cost and cash management. Last time we spoke, we also discussed our sharpened strategy. And I think during this COVID-19 pandemic, it already became clear that focusing on our core competence of entertainment and infotainment is the right thing to do. We are also fully concentrated on leveraging more and more synergies between our SevenOne Entertainment Group and the businesses of Red Arrow Studios, Studio71 and NuCom Group. At the same time, results orientation continues to be our priority. Every employee is encouraged to make our company a little bit better every day even if trying new things sometimes means making mistakes. Especially in a challenging market environment, we need to pay attention to promote entrepreneurial spirit and behavior even more strongly. And this means putting performance, drive for execution and synergies first. We do not aim for revenue growth at any price, but we are focusing more than ever on profitability. With this in mind, let's move on to the next slide and a quick operational update. Slide 12 shows the development of our Total Video Viewtime over the last 2 quarters. Let me remind you, the Total Video Viewtime is a parameter that we introduced in 2019 to measure the entire viewing time on all our platforms, be it on our TV channels or digital platforms, because simply looking at our linear development does no justice to the digital footprint of our company, especially with regard to the future. The second quarter figures reflect the viewers' current need for increased entertainment and information, with Total Video Viewtime growing from 257 billion to 275 billion minutes. With linear viewing declining over the years, we are actively working to keep the overall viewing time stable or even grow it overall. How are we doing this? First, we shape our prime time slots, especially on the larger channels, with live and local formats. Of course, we will continue to show attractive U.S. content, but less than in the previous years. Big German entertainment and infotainment formats are still the key to attract a great number of viewers, and we are more and more, including our own production unit, for this. Our all-time hit, Germany's Next Topmodel by Heidi Klum, produced by our German studio, RedSeven Entertainment, is the best example of how successful the strategy can be over the years. This year's season was the best in 8 years in terms of market share and reached a total of 28 million viewers on our linear channels, figures that prove that this is the right way to go forward. Looking at autumn, we have major prime time formats in our program. The third season of the entertainment show, Beat the Channel, is starting in September. As of October, we are celebrating the 10th anniversary of the music content, The Voice of Germany. Also in autumn, our smash-hit format, The Masked Singer, will come back with a third season. And there is more to come. As 2021, for that one, we secured the only live free TV package for our German soccer league, Bundesliga. During the '90s, that one set standards with its sport program, ran. From 2020 on, '21, we are back in the game for 9 matches in each of the 4 subsequent seasons, strengthening sports as an important pillar of our local content. Second, even though the viewing time share of our digital platforms does not yet reach the level of the linear ones, the digital extension of our TV content is of major importance, with advertising video-on-demand being a mega trend. The just mentioned Bundesliga rights package, for example, allows us to make the matches also available on the website of SAT.1 and ran, their apps as well as on our streaming platform, Joyn. And this is not the only -- and this not only delights me personally as a fan or as a supporter. In the media business, we all know new distribution channel mean new possibilities for monetization. Another important pillar of our digital footprint is, of course, Joyn. The streaming platform celebrated its first anniversary in June. And one fact is particularly important for us. If you look at usage numbers, you clearly see that it is the platform's TV content that is driving the viewers' usage. With this strategy, we will further push our Total Video Viewtime, which is the basic precondition for successful monetization. And when you talk about better monetization in the future, you will always end up talking about data. With the era of third-party cookies coming step by step to an end, we took early action and revised our group-wide registration service, 7Pass. 7Pass is an important basis for our data strategy. Since April, our content offerings on the TV and brand websites, apps, platforms such as Joyn, and our audio platform, FYEO, are only accessible after a onetime registration. This is indeed leading to a short-term decline in usage. But in the long run, it will help us to turn data into earnings by making our advertising more targetable and thus attracting more advertising customers. Now let's turn to Slide #13. Please allow me to summarize. First, as expected, our second quarter results were strongly influenced by the impact of COVID-19, especially in our advertising business. Second, despite the challenging macro conditions, we continue to have a comfortable liquidity situation driven by our consequent cash and cost management, which we will maintain focus on. Third, as discussed, economic indicators are brightening, and first signs of an economic recovery are increasing. Our team is concentrating on profiting from this recovery in all our business segments. As of July and August, we are already seeing first positive trends in the advertising market. And if this development is sustainable, we will see more positive effects on our group's advertising revenues in the second half of the year compared to the first half 2020. Fourth, nevertheless, uncertainty over the future -- the further development of the pandemic continues to prevail, and visibility remains low. It is, therefore, still not possible for us to provide a reliable outlook for the full year, but we will certainly be able to give more details in the next Q3 call and, of course, continue to be very disciplined about costs and cash management in order to preserve our stable financial basis. Fifth, what will be decisive for the group's business performance in the full year are the months September to December. For these crucial months, our crystal ball remains unclear. Please keep in mind that in a year with a normal revenue development unaffected by influences such as COVID-19, we generate about 50% of our full year adjusted EBITDA in these 4 months. Although we will not be able to make up for the declines resulting from COVID-19 by then, we are looking more optimistically into autumn. Sixth, at the same time, it is essential for us to further invest in our core strategic projects and in entertainment as the heart of our strategy. We do not save at the expense of our future. After all, our goal is to be the leading entertainment and infotainment player in Germany, Austria and Switzerland. I hope we could show you today that the whole team is working very hard to get us closer to this goal and to master the current crisis. Seeing every day how motivated the team is to drive our business footprint, to make ProSiebenSat.1 better bit by bit by taking on personal responsibility makes me proud and look to the upcoming months with optimism. Thank you very much. We are now ready for your questions.
[Operator Instructions] Our first question over the phone comes from Lisa Yang from Goldman Sachs.
I have 3, please. Firstly, I'm just curious about your July and August outlook. I mean it looks like your -- the French and Spanish companies are talking about actually a flattish trend in both of those months. So I'm just surprised why Germany seems to be recovering at a slower pace. Is there anything like we should be thinking of, with TV losing shares, ProSieben losing share? Yes, any explanation would be really helpful. The second question is on the drop through. So we expect in Q2, the Entertainment revenue to EBITDA, it was around 90%, and I understand that those cost savings will come through in the second half. So maybe you can help us understand like what sort of drop through you could achieve in the second half. Is 50% reasonable? It looks like, again, some of your peers are -- managed to report a drop through of about only 30%, 40%. Yes, any indication will be helpful. And the third question is regarding, obviously, the state-building by a number of parties, KKR, Mediaset, Czech Media Invest. Just wondering if you can maybe give us an update in terms of any conversations you might have had with any of those third parties in recent weeks, in recent months. And I'm just curious what are they telling you that they are seeing in ProSieben that the market is not [ clear enough still ].
Thanks, Lisa, for your questions. So let me start with the first one. Yes, our July and August, I think it's pretty convincing because what you can see here is a clear improvement because we had in April, May and June minus 40% compared to last year. Honestly, it's difficult for me to talk about our colleagues in French, Spain and whoever. But if I remember correctly, the decline was much higher in these months than ours. So perhaps that's an explanation for it. But on the other side, when I talk about the minus 20% in July and the approximately minus 10% in August, it's more or less TV cash ads. So -- and it's the first indicator. Again, these are very small months, and we really have to see what is the outlook for the rest of the year, especially for September. I can tell you out of the discussions which we had with a lot of our customers that, and that's what we also said last time, there are not a lot of cancellations. So there is optimism that we will see a very strong last quarter, but we don't know currently, and that's the situation. So therefore, perhaps as Germans, we are always a little bit more conservative than others. But in the current time, nobody knows where this pandemic goes, and I think it is important. But we are very happy to be in markets like Germany, Austria and Switzerland, mostly Germany, because what you could see in the past is that the German market is doing well. And if this stays the case, I stay optimistic going on further. And what we do on the cost side, I also start the second question on that basis, we are not doing that what I read of some of our friends out of the 1,000 markets, which then clearly reduced also their program. That's the reason why our Total Video Viewtime went up because our target is to make linear TV more attractive to our customers. And therefore, we try to convince a lot of -- especially young people, and that's working. So if you see on our cohorts, you would see that especially the young people start to love TV again, which is good for the advertising business going on further. That's good. And the saving, especially of the EUR 50 million in program, is for the majority in the second half of the year. But what you could see, Ralf has presented it in his slide and also in his presentation, we have done a lot to reduce the costs. And for me, personally, we are a little bit in a wait-and-see position. We are not opening currently our spendings. We stay on our cost and working capital breaks as long as we are not seeing a clear improvement. On the other side, we are investing in areas where we know that we need them for the future, consequently and clear, because we believe that the strategy which we are running is necessary and very good, and the first signs are there. So Ralf, you want to add on costs?
Yes. And Lisa, as Rainer already alluded to, we're very confident to deliver the EUR 50 million cost savings in program cost. This will probably be -- the majority of this will be realized in Q4, yes. We will also be addressing continuously, obviously, selling and administrative expenses, hence, we are managing the addressable cost. And subject to, let's say, COVID-19, yes, there should also be, let's say, impacts from revenue-related costs. So we are addressing the cost base. We -- as we did in H1, we are plugging in the additional EUR 50 million on program cost expense. And as you know, this is for the Entertainment P&L.
Let me answer your last question. No further discussions currently about strategy or whatever with Mediaset and CMI. I only can repeat what we have said several times in the past. CMI, for sure, as well as KKR in the past was very supportive because they totally understand that our cash flow focus, that our return on capital focus, which we have as a company, is good. And for sure, our synergistic approach is good. And everything which doesn't play into that is something which we look carefully in, if it will stay or will go away out of the group, and that's exactly what we do. And for sure, cash flow plays an important role. I've mentioned it before. We only lost EUR 60 million in cash from Q1 to Q2, and that proves a little bit what we are doing currently. So our focus is clearly on cash flow, our focus is keeping the liquidity together, and that's clearly in the interest of everybody who comes out of a private equity or whatever approach.
Our next question will come from Annick Maas from Exane.
My first question is you had a very strong programming schedule in Q2. And despite that, you lost some TV advertising shares. So with programming costs coming down in H2, what drives your confidence that you're well positioned to capture any advertising spend coming in? My second question is I understand you can't give any comments yet regarding September. But maybe you could comment on the tone of advertisers and how it has developed over the last 3 months, particularly, as over the last weeks, you have more and more restrictions and lockdowns being put in place also in Europe.And my third one is on NuCom. Just with COVID going on and some of the assets actually having quite good trends within NuCom, do you think there's maybe some monetization possible earlier than expected for some of the assets?
So let me start with the first one. Yes, we had a good program schedule for the second quarter. Please have in mind that especially the European championship wasn't there. So therefore, everybody who didn't have the rights had to do something in the second quarter, especially if you want to present an attractive program, we did. But again, we stay and stick to the EUR 50 million cost saving because we knew already that the European championship wouldn't happen. So the -- how we schedule it for the rest of the year is exactly in line with that. So as I said, costs are very well under control. And I doubt that we lose -- lost market share in TV advertising because I believe the trend, which you could see in the second quarter, over the quarter, of minus 40% for TV cash ads, that's what we are talking about, is pretty similar to everybody in the industry. And again, Germany was doing here a lot better than several other countries, and that's also something which you should have in mind. So all our advertisers, I can tell you, when you listened to us, when we forecast the minus 10% in -- for August, I really can tell you that a lot of advertisers are very interested in advertising, where is the place to be, where you have the highest video, where you have the highest customer base sitting in front of the devices, which is currently for sure in TV, because in all the other areas, nothing -- there are no new programs and so on. So therefore, we have good discussions. But up to this point, then our lead time is 4 to 6 weeks. So we will know better how September and all the other months will work when we are closer to the end of August because then we have a better feeling for it. But I'm not pessimistic. Hopefully, that comes across that there is also a possibility that we can have a very strong last quarter because we don't have a lot of cancellations. So it's performance, and that's what we already said last quarter, and this hasn't changed. So we are in good discussions all over. For sure, there are some people in that market. And we also have shown it on the slide here, some industry like tourism, which will have problems further on. But others, like gaming industry or whatever, will come to the market. So therefore, you have a picture which has positives and negatives. NuCom, we have good trends. You're totally right. Our monetization strategy here is clear. In that moment, when we figure out that an asset in NuCom is -- doesn't need us anymore because we are not the best owners anymore, then we are ready to monetize it. For sure, we are happy that companies like Flaconi, Windstar, Parship are performing very, very well in these times. But on the other side, we really have to see how the situation is. We have clear plans. And I've already said, we are committed to reduce our leverage down to between 1.5 and 2.5x. And also part of this leverage reduction somewhere somehow how in the future will be some disposals. So nothing more to say currently. But we are pretty optimistic that the ones which we had in mind for monetization, one which we officially announced is Parship in the combination of The Meet Group. But again, The Meet Group is not closed currently, was an IPO in 2022. This is still possible. We don't see there a problem because the performance is great. So yes, we are optimistic. Nothing has changed in our plans.
Our next question over the phone will come from Richard Eary from UBS.
Just got 2 quick questions and a bit of a follow-up. If we look through from April, May, June and into July and August, what sectors have actually driven the sort of improving trends in July and August will be the first question. So if we can just get a reference to that from what we're seeing in other markets. The second question, just on The Meet Group. Can you -- you said, obviously, the transaction hasn't closed. Can you just give us an update in terms of when you expect approval in the U.S. and whether there's any issues on that approval process?
Yes. We are still -- second one is pretty easy to answer. We are in the process. We are waiting for the last approval on -- it is very difficult to forecast official authorities to tell when they will approve. We don't see that there is an issue, but we can't say currently. We hope it's happening. As we already said, in the second half of the year, perhaps it will happen in the third quarter, we will see. No update there. The sectors which are improving is a lot of sectors. We have, for instance -- the services sector is up, energy, finance, nutrition. On the other side, you also have, as I said, markets which are going down, take the motor vehicle market, which was down. But here, I can tell you with all these e-cars coming to the market, there are a lot of campaigns coming in the second half of the year, especially during the Christmas season. And there is a lot of stuff where we are very optimistic that it will come back. So also, that is also for telecoms. They also have their Christmas campaigns going on further, which normally happens in the second half of the year, mostly in the last quarter. So there are a lot of customers which, whatever happens, will come back to the market because they have to. And again, it is very difficult for us to say, but we don't have cancellations currently. We had postponements. Everybody looks currently how the market is developing, how this pandemic goes on further, and that's the situation which we have to address. And you could see the first trends. Again, July and August, small country -- small months, not really a comparison. September up to December will decide over the year.
Could I just ask a follow-up question, just in terms of the profitability of Flaconi. Obviously, we've had a good first quarter and acceleration in the second quarter. And we obviously had some reinvestment in that business to grow geographically. Can you just give us a viewpoint in terms of where the profitability is for that business and how you see that going forward?
Currently, the profitability is not our main focus because we let this company grow because, as you can see, the competitive landscape in Germany is in some of the main competitor. I'm not mentioning their names, you will figure that out. It's struggling a little bit. So far, that's a great momentum to take market share. That's what we want to do. The reason why NuCom wasn't performing so strong is more or less billiger-mietwagen. Because here, with a high margin due to the tourism business and the reliance on that, we do have that problem. As Ralf already mentioned before, we had minus 80% compared to last year. Okay, that's getting better to minus 50%, but it's still the major reason why our profitability in NuCom is not as strong as it could be when you have all the others in place. I'm not talking more about the profitability of Flaconi. That's clearly not the reason for the losses or the difficulties in our NuCom performance.
Could I just then follow up, obviously, that you said, obviously, billiger-mietwagen was obviously down 80% in the second quarter. It's quite a high profit number. What are the margins in that business so we can understand when that business has come back or what the impact will be on NuCom profitability?
Richard, billiger-mietwagen is a very, let's say, profitable business. You can assume, let's say, in normal environment, yes, EBITDA margins to be 30%, yes. And obviously, we have a high drop through, yes. If revenues disappear, yes, you see it in the bottom line. However, also, this company is undertaking its measures during the COVID-19 crisis, but the difference in EBITDA can largely be, as we said, attributed to billiger-mietwagen.
Our next question comes from Julien Roch from Barclays.
Yes. My first question is could we have the split of the 4 viewing minutes numbers on Page 12 between linear and nonlinear? And if that's too long to give, maybe you can retell the wonderfully talented Dirk Voigtländer to give us the number. That's my first question. The second question is can we have -- how much was smart advertising in million of euros out of the EUR 323 million in Q2? And my last question is, when we compare your advertising revenue in Germany to the one of RTL, you've been losing share for a couple of years, and you've lost share in the first half again. Now as you highlighted, your audience is actually improving. You said that your prime time audience was up for, I think, the third or fourth year in the first half. And usually, that audience leads to share gains. So can you explain why you're losing share to RTL in Germany?
Well, let me start with the second one. I don't know where you come to this conclusion that we are losing market share against RTL because we have to count it over the year, and over the year, normally, it stays stable. We have quarters where it's better and where it's worse. But currently, I would say, we haven't lost market share against RTL. I haven't seen the numbers, we will see them. But we know exactly from the advertisers, from the advertising industry, from the agencies where we are working with that this is pretty in line. Can always have in mind, when you look on the statistics that we are very transparent because we always talk about TV cash ads. Outside, the rest, if you compare and put everything together, you would figure out, I would say we're not doing so bad currently. So your split between TV viewing minutes, linear and nonlinear, I don't have it in my mind. It's less than 5% for digital. That has to do with the massive linear TV which we have. We have 60 million customers watching it. So therefore, it's less than 5% currently, and that hopefully helps you to get those numbers in the right way. And smart advertising, Ralf, you may want to answer it.
Julien, digital and smart advertising revenues were, in Q2, also affected, obviously, by COVID-19, but still low single-digit positive. And in H1, yes, you can safely assume that it was around about plus 15% or so, yes. So performance is okay.
Our next question comes from Conor O'Shea from Kepler.
Yes. Three questions from me. First question, just a follow-up, Rainer, on your comments on July and August when you said down less than 20%, down less than 10% for cash advertising. Just to be clear, is that total advertising, traditional TV plus smart, digital, or only traditional? That's the first question. Second question, just in terms of the pickup in the advertising market. Are you also seeing that for Studio71? Digital ad revenues in July and August, has that returned to a flat or positive number? And then the third question, just on Joyn. I think the numbers you gave in terms of unique users for Q2 was slightly below Q1, very slightly, I think 3.9 million versus 4 million. So does that mean momentum has slowed a bit? Or was there an unusual boost at the start of the lockdown and therefore in March which distorted a little bit the Q1 number?
The last one is pretty easy to answer. We had our peak in May with 3.9 million, and then it's a user pattern that it's going down and up depending on how much new originals or whatever we have. And we didn't have a lot of new stuff also because we are hurt in Joyn, as everybody in the industry, by some productions. So therefore, the user pattern goes a little bit up and down. But overall, we're pretty happy with the performance, as we already said. July, August, down total advertising, or if it's TV cash ads, it's TV cash ads. And perhaps we have a chance to be a little bit better with digital together. And we have given out this number, for sure, as total TV advertising is, as I said, the first indication, and we will see how this development is. August, it's not over, as you know. So we see if there is room for improvement going on further. Again, July, August are small numbers, more relevant in September. Here, we don't know. We have to see how this will develop. Again, we are Germans. We are not so progressive than others because we don't want to be too negative going on further and then taking it back. So therefore, we are okay with this number. That's what we can see currently in our -- that's what we currently can see in our system. So Ralf, you want to answer to Studio71?
On Studio71, obviously, the German business is also benefiting from improved advertising trends for the U.S., where we have the larger part of our business, still remains to be seen. Obviously, the COVID-19 dynamics there are much different. So yes, we will have to see. But generally speaking, yes, the German business obviously experiencing same improving trends than the other part of our German business.
Our next question comes from Sarah Simon from Berenberg.
Yes. I just had a couple of follow-ups. On the Total Video Viewtime, or rather TV consumption, can you tell us what reach did? So it's obviously different from sort of average consumption per user. And sorry, I didn't -- I think I kind of missed the answer to the previous question. So the minus 20% and the minus 10% is TV. Is that right? Or is it total?
Second question is total and TV cash ads. It's both. Both total...
Okay. So they're both recovering in line with each other?
Yes, exactly. And the point here clearly is digital is always a chance. So we have to see how much that can improve, but it's more or less the forecast for the TV cash ads. But as I said before, we don't want to be too optimistic because there is our SevenVentures business and there is some digital business, and we have to see how this will develop. But normally, when we've seen the trend, there is a positive chance to go on further, but we will see. We don't want to give out aggressive numbers and then later on tell the people, okay, it's minus 12%, where it's minus 22%. So that's the reason why we've said around 20%, around 10%. We have to see how this will develop. Ralf?
And Sarah, also the reach metrics developed positively, yes. I don't have the numbers in front of me right now, but you can follow up, yes. But it was the same trend.
Our final question now comes from Nizla Naizer from Deutsche Bank.
Great. I just have a couple. Firstly, on the NuCom Group. Could you tell us how current trading is progressing on your e-commerce assets in particular? With Flaconi up 68% in Q2, has that sort of normalized in Q3? Or are you still seeing strong demand? And the same for the Matchmaking vertical as well. Have those trends sort of sustained over the period in Q3 that you're seeing? Some color there would be great. Secondly, just to understand, did ProSieben benefit from any government assistance during the first half on the back of COVID-19? And would you sort of hope to get more government assistance in H2 as well? And lastly, on Joyn, you mentioned that it is progressing as you planned. Just wanted to understand, are there -- is there any intention to sort of accelerate investments into Joyn in the second half to promote it even further? Some color on how you're thinking about the evolution of this business and its contribution to ProSieben's own top line would be great.
For Joyn, we are totally in line with the investments which we communicated last year, and we keep it running because Joyn is one of these strategic investments which we need also for our future. So therefore, there is no cutback. So the numbers which we have provided you within our forecast is still the case. So we are spending approximately EUR 60 million, EUR 50 million from our side into it, and then you have Discovery spending pretty similar number. For benefits of the government, no. We haven't taken benefits from the government besides short workage time which we don't have to pay back because we don't need it. That's the reason why we have drawn the revolver also as a security measure because we are well prepared, well positioned. Our performance is good. And we also -- when we look forward to our repayment of the bond next year, we don't see that we are in trouble or in difficulties because we are very well positioned. So -- and when we talk about NuCom, Flaconi as well as Matchmaking is doing also very well in Q3. So we totally can see that this trend, which we have seen in Q2, is also going on further. Ralf, you want to add something?
And this, bear in mind, we are not consolidating Joyn. It's a 50-50 JV. So the net contributions of Joyn show up in our equity results. Obviously, we do business here. But what Rainer mentioned here, you will see in the equity results -- in financial results.
Ladies and gentlemen, this was the last question for today's call. As always, my colleagues in the Investor Relations team and myself will be available for any follow-up questions. Thank you, and goodbye.
Ladies and gentlemen, this does conclude today's call. Thank you for your participation. You may now disconnect.