Ladies and gentlemen, welcome to the Analyst Conference Call of Agile Group regarding the Presentation of the Full Year 2020 Results. At our customers' request, this conference will be recorded. As a reminder, all participants will be in a listen only mode. And after the presentation, there will be an opportunity to ask questions. May I now hand you over to Oliver Faibusch, who will lead you through this conference.
Please go ahead.
Good morning, everyone, and thank
you for joining this analyst call for RTL Group's full year results 2020. The speakers for today's presentations Thomas Rabe, the group's CEO Emma Heggen, our COO and Deputy CEO and Bjorn Bauer, our CFO. The agenda on Slide 2 of our presentation shows the areas our management team will cover today. And with this, I now hand over to Thomas. Yes.
Thank you, Oliver. Good morning from
you as well. Let's turn
to Slide 4. 2020 was a year of unprecedented challenge and major achievements for Arte Group. We provided information and entertainment to millions of people who faced extraordinary disruptions to their daily lives. In so doing, we outperformed our commercial competitors and audience in Germany, France and the Netherlands. And we boosted our streaming services with paying subs in Germany and the Netherlands, up 52% to 2,190,000.
Our business has proved to be highly resilient as we managed to offset 70% of the revenue decline by cost savings. We continue to actively manage our business portfolio with the full acquisition of Arcelor in Belgium, the binding agreement with Disney to fully acquire Zuppa Arcelor in Germany And with the disposals of broadband TV and SPOTX. We stated repeatedly that there's a strong case for in country consolidation in the European media industry, In particular, in television. We'll continue to review options for such consolidation with the creation of 2 national champions And to create value for our shareholders. There's more good news for our shareholders.
The shareholders will benefit from the strong performance in 2020 With a dividend of €0.03 per share proposed to the AGM. I will now
hand over to Bjorn, who
will take you through the group's financials in more detail.
Thank you, Thomas. Good morning, everyone. I will start on Slide 5 with the group financials. In my presentation, I will cover 4 points that were key to our 2020 performance. 1st, the strong rebound of TBS markets 2nd, effective control of our costs 3, strong cash conversion and 4, higher capital gains.
Let's start with a look at our key financials. On Slide 6, group revenue was down by 9.5% to €6,000,000,000 mainly due to the decline in TV advertising markets across Europe in Q2 and lower content production revenue as a result of COVID-nineteen. On an organic basis, I. E. Before scope and FX effects, revenue was down 6.8% year on year.
RTI Group's adjusted EBITA was €853,000,000, resulting in an adjusted EBITA margin of 14.2%. Profit for the year was €625,000,000 Let's go to Slide 7. Here you'll see the development of RTI Group's TV advertising revenue on a quarterly basis. The full year decrease was fully driven by the market environment in Q2 Many of our advertising clients cut their ad spend in order to safeguard liquidity. However, once the economic environment normalized over summer, TV advertising money came back quickly.
This clearly shows the strength of TV with regards to reach and brand building in a quality and brand safe environment. As a result, our broadcasting businesses even generated a higher adjusted EBITA in second half of twenty twenty when compared to prior year. Moving on to Slide 8, which proves our cost flexibility. The total cost compensation across the group in 2020 amounted €331,000,000 representing 52% of the revenue decrease. On a comparable basis, Adjusted for nonrecurring items and higher streaming investments in 2020, the compensation rate was more than 70%.
The main drivers were program cost savings in our broadcasting businesses as well as production cost savings at Fremantle. Looking now at the next slide, the cash flow statement. The group's EBITA to free cash flow was Reaching 123 percent in 2020. The higher cash conversion is largely due to favorable net working capital effect as a result of active Cash management. The line acquisition disposal of subsidiaries mainly reflects the cash received as part of the disposal of broadband PV.
With no dividend payment for the financial year 2019, the cash generated in 2020 amounted to €762,000,000 At the end of the year, RTA Group was in a net cash position of €236,000,000 Looking now at the items below EBITA down to the net profit on Slide 10. In March 2020, GroupMC So it is shareholding in EGRAL to the German Global Savings Group. The deal took the form of a partial cash sale and a share swap. As a result, GroupM6 has become the leading shareholder in Global Savings Group. The transaction resulted in a capital gain of €78,000,000 In October 2020, we completed the sale of our digital video network broadband TV for €102,000,000 in cash.
The transaction resulted in a capital gain of €80,000,000 Following the decrease of the share price of Atres Media and the decline of Spanish TV advertising market in the first half of twenty twenty, we have already recognized a non cash impairment of €60,000,000 against Media and our interim results. The group's tax charge came in at €250,000,000 As a result, The group's profit for the year was €625,000,000 On the next slide, I will walk you through the dividend proposal.
Our dividend policy is based on
the group's full year profit attributable to RTI shareholders and adjusted for any material noncash impacts. And we target a payout ratio of at least 80%. The adjustment you'll see on the slide of €71,000,000 relate to noncash impairments booked in 2020, primarily asset media. In In line with our dividend policy, our Board has proposed a dividend of €0.03 per share, of which €2.50 Represents an ordinary dividend, while the remaining €0.50 relate to the distribution of cash capital gains. The proposed dividend of €3 per share results in a dividend payout of 83%.
Based on the average share price of 2020, This translates into a dividend yield of 8.9%. For the business review, I will now hand over to Elmer.
Thank you, Bjorn, and good morning from me as well. In 2020, our largest unit, RTL Dorsland, continued to outperform Commercial competition on advertising sales, audience ratings and streaming. The German net TV advertising market was estimated to be down between 9% and 9.5% in 2020 with RTL Deutschland performing significantly better than the market. In terms of audiences, RTL Dorschand reported a combined audience share of 27.5% in our target group of euros Page 14 to 59. This means that our German family of channels increased its lead Volvo's main commercial competitor, Proseebinsartheins, from 3.1 to 3.6 percentage points.
Total revenue was down 6% to €2,130,000,000 as higher platform and Streaming revenue partly compensated for lower TV advertising revenue. Competition in our largest market, Germany, is constantly increasing Both in linear TV with 1 of the largest public service broadcast systems in the world And also in nonlinear with the U. S. Platforms. This is why we continue to invest significantly into our streaming service, Tifornal and in other growth initiatives such as EdTech.
Adjusted EBITDA decreased from 4 €7,000,000 representing a margin of 22%. On a comparable basis, adjusted for investments into our growth initiatives, Mainly streaming and non recurring items, Adel Deutschland offset 70% of the revenue decrease
by cost reductions.
The non recurring items include the reversal of provisions in 2019 and program effects in 2020. For example, the ongoing pork price contracts. Moving now to Group MCs on Slide number 14. The French net TV advertising market was estimated to be down 11 Compared to 2019. Total revenue of Group MCs was down 12.6% to €1,270,000,000 mainly due to the decline in TV advertising revenue in Q2.
Adjusted EBITDA 2020 decreased Slightly to €266,000,000 representing a margin of 21%. In 2020, Group MCs offset 89% of the decline in revenues through cost savings. And again, this was achieved Without cutting into the substance of our business, the audit share of our French family of free to air channels in the commercial target group was almost stable at 22.7%. As in other countries, the main news shows On our factory channel recorded massive audience growth. MCs also succeeded in launching new audience favorites Such as Legal Masters and Toussaint Cuveline.
In October, SALTO, the joint subscription screening service of Group Fostel Video and Group Epics was launched with more than 10,000 hours of content and the chance to stream 20 TV channels live in HD quality. Our technology company, Bedrock, provides the tech platform for the streaming service with state of the art content curation and personalization features. Finally, 2femsis continued its Strategy to focus on its core businesses, generating substantial proceeds after the sale of the football club, gheraldinbordeaux And Monal Van Foutteau in 2018, the combination of IGRAAL with Global Savings Group in the first half of twenty twenty And the company finalized the sale of its home shopping business. Let's now turn on to Slide number 15. Dutch net TV advertising market was estimated to be down by 9.8% in 2020.
Partially Net Element's revenue decreased by 4% to €476,000,000 as higher streaming and platform revenue partly compensated for lower advertising revenue. Adjusted EBITDA increased by 7.4% to €58,000,000 Due to significant cost savings initiated in reaction to the coronavirus crisis, the combined Dutch family of channels Delivered an audience share of 31.7%, up 1.9 percentage points year on year. This strong audience growth was mainly driven by the main channel RTL4 with score which scores High rating with shows such as Labour Masters, The Master Singer and The Voice of Holland. As a result, Hotel Netherlands' family of channels increased its lead over its main commercial competitor, Talpa TV, from 6 point 5 to 9.9 percentage points. Turning now to our global content business, Fremantle on Slide 16.
Revenue at Fremantle was down by 14.3 percent to €1,540,000,000 mainly due to Fewer deliveries of shows and postponements of productions. Fremantle's adjusted EBITDA was €87,000,000 FreeMetal had major creative successes across all genres in 2020 with American Idol, America's Got Talent, The Champions. The reality dating formats, 5 Guys A Week on Channel 4 and Too Hot to Handle on Netflix, Which quickly topped the Netflix most watched charts globally. Despite production stops and postponements, in particular, in Q2, Fremantle delivered a total of 54 dramas from 15 territories in 2020, slightly up compared to 2019. With productions such as the New Pope, the investigations, We Are Who We Are and Deutschland Noren Hachs, Fremantle has become one of the global producers of international scripted series for all major clients such as Sky, HBO, Amazon Prime, Netflix, Disney and Apple Plus.
Our global content business also launched It's for our 1st high end documentary, Experisur Partis, which will be rolled out internationally in 2021. All this demonstrates that all this demonstrates the STRIMI creative diversity across Fremantle's global footprint. I will now hand you back to Thomas, who will take you through the strategy update before finishing with the outlook statement.
Yes, many thanks, Elmer. So let's turn Slide 18, which is our strategic framework, which remains unchanged. It is based, as you know, on core growth and alliances and partnerships. Core meaning investing in premium content, strengthening our families of channels, driving efficiencies and managing our portfolio. Growth focused on our streaming services, advertising technology and addressable TV as well as worldwide content production Alliance and partnerships span from advertising sales and content production to technology and data.
Let's turn to Slide 19, which gives you an overview of the drivers for a long term portfolio transformation and our framework. In linear TV, the main opportunities are massive reach converted into high quality and brand state advertising inventory CPM increases, reflecting the true value of TV advertising addressable TV growth, leveraging our advertising inventory by targeting Platform revenue, efficiency and cost management, alliances and partnerships with resources and capabilities And finally, consolidation of our existing portfolio and larger scale in country consolidation in Europe. The biggest challenge, which you're well aware of, is the increasing viewing time, in particular, in the younger demos. And the next question comes from the line of David. Thank you.
Thank you. Thank you. Thank you. Thank you. Thank you.
Thank you. Thank you. Thank you. Thank you. End data.
The biggest challenge you're well aware of is the fierce competition with U. S. Platforms and a significant subscriber base. In the content, we see global demand across TV networks and streamers across all genres. And for FreeMetal, we see particular opportunities in scripted formats And high end documentaries, the latter becoming a priority going forward.
Let's see how we're doing on some of these And what we're planning in linear and nonlinear TV in our main market, Germany. That's on Slide 20. You'll see a higher reach In linear and nonlinear. In 2020, our linear channels increased their reach, driven by strong ratings of our news shows and information magazines. This demonstrates it again when it really matters, people turn to television.
We saw strong growth in nonlinear, in particular on our streaming service TV Now, Up 35% in 2020, with an acceleration in the Q4, which continued in the Q1 of 2021. In November, we announced a strategic partnership with Deutsche Telekom. We agreed to integrate TV Now Premium with Deutsche Telekom's offer, Magenta Heathau, And I can tell you that we are off to a good start. And last week, we go to Sky to make TV now available on the Sky Q platform from mid-twenty 21. Looking at addressable TV.
Addressable TV on Slide 21 combines the reach of linear TV with targeting solutions for digital advertising. It is still nascent with less than €15,000,000 revenue in 2020, But we expect this to increase to €200,000,000 by TIER 2025 based on the assumption that approximately 25% of German TV households will be addressable With video commercials. This depends on the number of households with a smart TV device, the availability of data for targeting And breach via all distribution channels, namely broadcast via digital cable, satellite and terrestrial, IPTV services such as Deutsche Telekom Spagensa, Tefauer, Sky Sky Q platform and our OTT distribution of our streaming service, TV Now. Importantly and despite the sale of SpotX, We made good progress in building a broadcaster advertising technology platform based on the Smartclip and Yoast based technology, And we're deploying this technology at RTI Group and to 3rd party customers. Slide 22, we continue to boost our streaming services, And we confirm our midterm targets, midterm meaning until 2025, for TV Now and VideoLANs in the Netherlands as follows.
To grow their total number of paying subscribers to between 5,000,000 7,000,000 to grow streaming revenue to at least 5,000,000 To become profitable by 2025 and in order to reach these goals, to triple the content spend for TV Now and Leaderland to 3.50 €1,000,000 Now let me turn to the outlook for 2021 on Slide 26. Assuming that the economic recovery continues in 2021, in particular in Q2, as current lockdown measures will gradually ease and vaccination programs against COVID-nineteen progress. We expect our full year revenue to increase to approximately €6,200,000,000 in 2021. This includes organic growth of 8% and the effect of the deconsolidation, in particular, of broadband TV. We expect our adjusted EBITDA for 2021 to grow to approximately €975,000,000 in euro.
This includes significantly higher streaming start up losses. As we grow our content spend for TV Now and VideoLAN, in line with our boost plans, streaming start up losses are expected to grow from €55,000,000 in 2020 €250,000,000 in 2021. And that means that with an adjusted EBITDA before streaming start up losses of approximately €1,125,000,000 in 20 21, operating profitability will be almost back to the pre corona levels. As Earlier, our dividend policy remains unchanged. RCA Group plans to consolidate 80% of the adjusted full year net results, And this includes cash capital gains.
This brings me to the end of our presentation. Thanks for your attention, and we will now take your questions. Thank you.
Ladies and gentlemen, we will now begin our question and answer session. And the first question is from Anik Maas, Exane BNP Paribas. Your line is now open. Please go ahead.
Good morning. My first question is what sort of advertising growth are you baking in this guidance for the German market, please? I know, I guess, you know what your competitor has guided for. Where do you believe are we standing at the moment in this range? My second one is, I guess it's for Thomas.
It's really how does Batman do its RTL ownership at this stage? I guess what I would like to get to is Within RTL, what assets do you view as core and what do you view as non core going forward so that RTL still fits into the Brittleman strategy? And my last one is with regards to M6. I assume you may have seen the valuation range that was suggested this morning in the ZEKO of 3,000,000,000, maybe you could comment on that valuation and potential or well, on the potential business that have been raised in this article. Thank you.
All right. Thank you. I mean, to start with advertising markets and advertising market recovery, first point to make on the German market. So we
believe the market was down
a bit more than 9% last year. We clearly outperformed that. We came at approximately minus 7% or minus 7.1%, which means that the German market last year performed more strongly than the other markets in which we operate. Our current view on the market is that despite softness in January February, We expect the advertising market to grow by approximately 3% across our footprint, and that would also apply to Germany. So that is that's where we are guiding.
For total revenue guidance, which I provided, the SEK6.2 billion, as I said, We see 8% organic growth, and that is approximately €480,000,000 based on €6,000,000,000 last year Approximately €290,000,000 of deconsolidation effects, primarily broadband TV and home shopping services in France. On RTL and Berbertsmann, I mean, I'm here as RTL's CEO, but what I can tell you It's that Bergelsmann is very happy with RTL and RTL's performance. We consider all or I'd Most of the assets are core. Clearly, we didn't consider broadband TV and SpotX and some of the other businesses we sold as core. But that is fully in line with RTL's views.
So when we talk about consolidation, The European Media Industry is not a matter of what we consider to be core or not. We quite simply think that there's a strong case for consolidation in the European Broadcasting Industry. And that's why we're currently reviewing such options in the French market for the French broadcast Les Gobences With a view to creating shareholder value via the creation of National Champions. But let me be clear, There can be no certainty that this may lead to any type of agreement or transaction at this stage. And as far as Antisys is concerned And speculation in the press, I have no comments to make beyond what I just said.
That's great. Thank you very much. I just have one small one. So TV Now, I understand you're going to rebrand it to RTL Plus, and I think that rebranding was announced post the topic that you've given To breakeven in 2025, just I was wondering if this rebranding baked in the guidance that we have? Or is there maybe some risk that, that might change In the near future No,
no, there's absolutely no risk because the rebranding is really pure rebranding. Everything else remains in place, Our marketing spend, the spend on improving the customer experience and of course, the content spend. By rebranding TV Now into RTL Plus, we think to realign our linear and nonlinear business, which we believe is much stronger message to the market. But it's rebranding only. It doesn't mean that we change our strategy.
What is absolutely key in Germany, in particular, are our distribution partnerships. As I said, we're off to a very, very good start in our partnership with Deutsche Telekom, which started in Q4 of last year And significantly accelerated to Q1 of 2021.
Sounds good. Thank you very much. Thanks.
The next question is from Liza Yen, Goldman Sachs. Your line is now open. Please go ahead.
Good morning. Thanks for taking my question. I have a few on in market consolidation. I mean, the first question, I think, is more sort of general. I mean, clearly, there's a strong case for in market consolidation.
It has been for a while. Regulation has always been the major constraint here. So I'm just wondering like where do you see basic consolidation as being most likely from a regulatory And for what is easier easiest versus where you see the strongest case for consolidation. And I'm wondering if you have had any Discussions with regulators in any markets and are you sensing some, I would say, signals that regulators are becoming more favorable In market consolidation, especially after what happened with the pandemic crisis. That's the first question.
The second one is more on the rules, on the regulatory rules in France. I mean, my understanding is, a single TV company could not own more than 7 To be licensees, and obviously, you're restricted to 49% ownership issue or above a certain percent of Rojin share. Supposedly, you fit this criteria and the buyer and the combined entity and seeks to someone else fit the criteria. Is there any chance that regulator could still block it? I'm just wondering like whether there are other factors that regulators might be looking at apart from those two main roles.
And the first question is, you talked about this reviewing various options on M6. But if you were To sell it and let's say get $1,000,000,000 or $1,500,000,000 or let's say up to $3,000,000,000 what would you do to the proceeds? Thank you.
Okay. Well, quite a number of questions. The first one on market consolidation and regulation in particular. I mean, it's very clear that market regulation, media regulation and competition regulation or competition law is outdated. It's To a large extent, that's from the 1990s, I.
E. From the analog world, is, in my view, not adapted to the new reality Of media markets, with competition with all U. S. Platforms either for advertising or for reach, I. E, in streaming for a number of Skybus.
The thing is on consolidation that everybody kind of seems to be talking about is, but so far in the the European media industry, nothing much has happened because people didn't move from talking to doing. We are ready to do and ready to act Despite the current regulatory environment and we actually believe that a transaction, the specific transaction Put on the table could be a trigger for reviewing regulation. I don't think regulation will be reviewed without there being a specific case to be assessed. So that's our take. On MCs and And the potential sale or proceeds from sale, frankly, I mean, that is far too early to tell and speculative because we don't know What the outcome of the current review is going to be.
But as I said before, this applies generally to all of our capital gains. Capital gains will be dividended out to our shareholders in the same way as ordinary profits to the tune of 80% plus. That's exactly what we did in 2020 with our broadband and TV cable gains. That's exactly what we would be doing in 2021 With the capital gains from the sale of Spottx, when this transaction takes place. And the same principle would apply to other transactions and other disposals.
And on the rules in France?
On the rules in France, well, listen, the rules in France are highly complex. And there's no general answer here because, frankly, regulatory Obstacles to potential consolidation very much depend on who the partner and the consolidation is or would be. Some partners that would face pretty high obstacles and others would face pretty low obstacles, if any at all. So it's impossible to respond to this question in a general way, but the rules and regulations in France It's pretty tight and could have an impact on some of the consolidation options.
Okay. So basically beyond the number of
licenses you're going to have in
the 49% ownership, do you think there are other criteria the regulators will look at, let's say, combined market share And all those considerations, right? Yes, yes. Okay.
Okay. If I can clearly and so on, no doubt, there are many other criteria. We've got the media strategy and we've got the competition So there's a mix of criteria they will look at. That's very clear. So unless the regulators are prepared to change the market definition For competition purposes, the definition of relevant markets, no consolidation is going to happen at scale in Europe.
And it's interesting. I mean, we announced 2 weeks ago that we've increased our shareholding in Zuhua out here to 100%. I think that is probably the first kind of, I mean, say, pretty modest consolidation step in Germany in the last 20 years. It tells you something. If you Then look at what has happened in the U.
S. In the meantime, it clearly shows that we are lagging.
And actually, if I can Just follow-up, why you started with France
and in terms of like you do thinking of selling, Is it just because you own a 48% stake? Are you thinking once France is done, you can move on to other countries?
Well, I mean, what applies to France potentially applies to all countries in Europe, countries in which we are present and countries in which we are not present. We believe that in the large countries, the effects of in country consolidation, I mean, always depending, of course, on regulatory conditions imposed, We'd be in the 100 of 1,000,000 per annum. So we're really talking about, I mean, significant synergies, which we could then in part reinvest, For example, in building very meaningful national streaming services, which will then be able to compete with the U. S. Services.
So I mean the economic case is very, very, very strong and that applies to all countries in Europe without exception.
Understood. Thank you very much.
Yes, you're welcome.
The next question is from Julien Roch, Barclays, your line is now open. Please go ahead.
Yes. Good morning. I'll start again with M6 and a technical question. So In the hypothetical scenario that you would sell M6 and get a big premium, I'm very certain that the French 49% rule trumps public offer rules in France. So would you get the premium offered, again, hypothetical, only on 49% of your stake, So all shareholders get offered premium on 49% of their shares, or will you get the premium on 100% of your 48.3% The minorities only get a premium on 0.7 percent of their shares.
That's my first question. The second question is the impact of M and A. You gave Very quickly, I'm sorry, I missed the number, the impact of the consolidation of Broadband TV and Sportex. But you also have the positive impact of RTL build that's leading to less minorities. So could we have either the pro form a figures for Question is, thank you very much for the data on Page 20.
Extremely helpful to assess your progress on the core business. My question is on Page 21. Your addressable 2025 target is based on 25% of total TV households being able to get addressable advertising, Which seems very low to me because presumably saying that HBV TV 1.5 and above, Plus people that have signed the consent to have their data used is already at 33%. So those two numbers are incompatible. So I'd like to know What you feel is the current penetration of addressable TV at the moment?
And why you only have 25 in 2025? Thank you.
Yes. Yes. Perfect. Well, let's start with the scope changes. Bjorn, do you want to take us through this?
Yes, sure. So the outlook, as Thomas said, assumes an organic growth of 8% and also reflects Scope effects of around €250,000,000 plus that mainly relates to broadband TV and And the sale of HSS. With regards to the kind of 2 larger transactions that were also discussed, 1, SpotX and SuperAffe, The first important element is both of these are it's still in the regulatory approval process. So the timing is Uncertain at this point. We hope we're hopeful that both of these could close in Q2, but it could also be in a later point in time.
So the impact on our 'twenty one financials obviously depend on the timing of these process. But to give you a sense, when you look at the 2020 numbers, The revenue and the EBITA were kind of in, I would say, comparable range. The revenue of SuperAffeur was slightly below SpotX and the Additional EBITDA contribution from the full consolidation of Super RTL versus kind of the loss of Sospotics, Slightly lower, but in comparative ranges.
Yes. The minus 2.9 percent TFD consolidation refers I mean, effect in 2021 refers to transactions put in place, right, which are done. RTA Belgium, by the way, doesn't have an impact We bought out a minority, so there's no impact on revenue or EBITDA there's an impact On net result share of the Arctic shareholders versus minority shareholders, but that's how we dealt with Belgium. On addressable TV, listen, it's everybody's best guess at this stage. The point we wanted to make is that there is a significant market, We think there is a significant incremental market.
Addressable TV would put us in the position to offer advertising solutions targeted Similar to those of the U. S. Platforms and better user ad inventory. I mentioned the 3 drivers for addressable TV technically in distribution, etcetera, and TV sets. You can take different views on this.
I mean, our starting point is €500,000,000 That's the market size Which we have estimated all along. And this is video, right? I mean, maybe the confusion was Crozine, but I don't know,
to be honest, because I don't
know what The numbers they stated is that they include display in this. But as far as video advertising is concerned, we believe that the €5,000,000 number is a good number, It could be significantly higher, of course, and you can compute this very easily with the data which we provided if the household penetration increases Because of the distribution agreements, because of smart TV devices and all the other points I mentioned. So I think at this stage, It's a nascent market. The point we're making is there is potential. It could be potentially significantly higher than what we outlined.
We'll keep you posted on this and share the progress we're making on a regular basis. As far as France is concerned, I mean, I really don't want to get into the It's of regulation, also not of IMF regulation. It is you're quite right. Media law is provide 49% ownership limit. Or we would be selling if we would be selling, it's a big hypothesis, is our stake in MCs I promise to be reached with a buyer.
And that's all I want to say about this matter.
I understand that's all you want to say, but that's quite important for RCL. In the, Again, hypothetical, because if the 49% rule trumps, normally, To be fair to all shareholders, everybody should get the same premium. Therefore, it would be logical to conclude that you'll get the premium only on 49% of your stake, On, I. E, about 24%, not on the whole 48.3%. Would you agree with that?
No, I wouldn't because yesterday controlling shareholder. And if we set a controlling a shareholding That would in all markets and all transactions, they come at a premium. I don't think anything would change for the minority shareholders, to be honest. Sorry. But frankly, I don't want to get into this and discuss this.
I hear our view is we would be selling our shares. That's a hypothesis, Right. Let me be very clear and would be selling this at a price to be agreed with the buyer. That's all I wanted to say at this stage.
Okay. Thank you.
And the next question is from Conor O'Shea, Kepler Cheuvreux, your line is now open. Please go ahead, sir.
Yes. Thank you. Good morning, everybody. Three questions from my side as well. First question, just in terms of Your hypothesis on full year advertising market growth of 3% commerce For Germany and other markets, just wondering how much that's being influenced by the Q1.
Particularly in Germany, I think Your nearest competitor is talking about double digit decline for Q1. Is that what you're seeing in Germany? And maybe a word on some of the other main markets Well, in Q1. Secondly, just on Fremantle. Obviously, you expect some disruption in the Q1 from the lockdowns again.
But What are you looking at? What's baked into your assumptions for 2021 in terms of growth margins And also potential ForEx headwind. And then the last question, just in terms of your asset portfolio, obviously, Excellent price for SportX. Just wondering if there are any other digital assets within your portfolio potentially
We'll start on the digital assets. I mean, we sold broadband TV, and we are in the process of selling SpotX, and we effectively liquidated Stylehall. So the main digital business, in terms of the online video business that we have in our portfolio is Divi Move, This is a European leader, and we have no intention to sell that business. So as far as selling non core businesses, I think we're almost done. I mean, as Bjorn and Irma said, We also sold and partly contributed Eagerai, the performing business to Global Savings Group.
We sold home shopping services in France. The year before, we sold Universal Fusion In Germany, so our portfolio is in pretty good shape. And I would say that the bulk of the assets, I mean, probably 98%, Our core assets, all of which, as I said before, would benefit from consolidation. But I don't think That we have any significant non core assets in the portfolio. So our 3 metals concerns, we had With 90% of our productions increasing, pre metal will progress significantly this In terms of revenue and profitability, of course, lockdown continues in some areas, and that has an impact on productions, and it has an impact on production costs, Which we are not always able to transfer to our customers.
There's a margin impact there. You're quite right. A significant part of the Fremantle business is U. S. Business.
It's by far our strongest market, And that's the U. S. Dollar business. And the U. S.
Dollar is what it is. I mean, it's a weakened significantly to the euro. And therefore, we'll see some translation effects in our accounts in 2021. The important point in Fremantle, I made this before, is that this business Significant growth opportunities in scripted and non scripted and increasingly in high end documentaries, which is the business Which we are going to build in the next 10 years. Remember that we started our scripted business at Tremat, which was pretty old a few years ago And now generate approximately €500,000,000 of revenue.
And we're one of the 2 largest international producer of drama series, both for TV networks and for the streamers. On advertising markets, Bjorn?
Yes, sure. So we remain optimistic that the ad recovery will continue in 2021 and aggregate for our portfolio of around 3%. When you look at what happened at the beginning of the year, January February were indeed softer, but I would say as expected, On the one hand, due to the strong comps in the prior year and also due to the lockdown that we had In various countries, but it's important point to make that the feedback we are getting from advertisers is these are not cancellations, these are postponements for other quarters, and we're seeing improvements in March and a very significant uptake in April. Specifically about Germany, indeed, Germany is looking to be kind of Double digit down in the Q1, but keep in mind that at least for RTL, the Q1 of 2020 It was only very limited in a very limited way affected by the COVID and was close to 0. And as I said, a strong rebound for April, and that overall will lead us to what we said earlier, 3% for the full year.
Excellent. Just one follow-up on the Fremantle, the U. S. Dollar exposure. Is it in a normal year around 1 third, 40%, something like that.
40% of what?
Of the revenue.
Of the total business? Yes. In terms of profitability, yes. It's probably 50%. 50%.
Okay. Yes.
Many thanks.
The next question is from Richard Eiry, UBS. Your line is now open. Please go ahead, sir.
Yes. Good morning, everyone. Three questions from my side. The first one is on the consolidation side is that If we get a successful regulatory announcement in France that allows the M6 in consolidation story to happen and that becomes A broader theme. Are you as a business or is this an acquirer or a seller into that event?
And how does Fremantle sit within that? Because if there's an in country consolidation thing and Fremantle is a global player, What's the position of Free Mountain within the group within that in consolidation story? That's the first question. The second part is on the asset sales in terms of the physical distributions of that. Obviously, we got A small special dividend this year.
Obviously, it's difficult to distribute probably the spot ex because the deal hasn't closed. But I'm just trying to get an understanding in terms of are we expecting to see a full distribution of those proceeds? And if so, when? And does that include, obviously, the equity stake that you've now got in Magnite? Or is that something that you are looking to hold on to?
That's the second question. And then just the third question, just with regard to Super RTL and RTL Belgium. I may be wrong, but I didn't see any cost Associated with those transactions, can you just basically update us on the cost of those as well? Thanks.
On consolidation, as I said before, we believe consolidation is necessary and will create Significant value. And we are not dogmatic about whether to control the consolidation or not. I mean, as we just heard, there's a 49% ownership restriction in France that would make it very difficult in the consolidation to become the controller shareholder by the condition. In Germany, which is our home turf, so to say, for the Adelsmann and for RTL, clearly, we would be consolidator And we maintain a leading role. Free metal It's not affected by this at all.
Fremantle is very, I mean, practically independent from our broadcasting businesses because 90% -plus of its revenue is not with RT or group but with 3rd parties. Fremantle, we see significant growth opportunities, as I said before, In all segments of business and high end documentaries, we've made very good progress already in the last years, Slightly interrupted by corona, but will pick up again because it's hugely hard for our content. And our objective for Fremantle will be to significantly grow the business In the next years, both organically and through M and A, it's an absolute core business that benefits from industry tailwinds. On the proceeds, yes, absolutely. Our dividend policy calls for 80% minimum 80% payout Of ordinary profits and capital gains, that is cash capital gains.
It's very important. And this will therefore also apply to SpotX. Now the transaction is being reviewed by the regulators. There's a cash component, which you're aware of and a share component. We assume that we would monetize our entire position And to pay out 80% of the gains, that would be equivalent to €3, potentially €4 per share, But more and more, it's €3.50.
On the last point, Zuppert Airtel and RTO Belgium. I don't know what you mean by cost. You mean the investment we made. ZuppaRT, we just announced at the beginning of this year. So ZuppaRT, the full consolidation is not In the 2020 accounts, it's being reviewed by the German regulators, and we'll get a response in due course.
And RTL Belgium Was a transaction or is it transaction we bought out minority shareholders in the Belgian TV and radio business, And we have paid them in the form of cash in the company, I. E. In form of dividends. And we pay them in the form of RTL Group Treasury Shares. And we paid the delta in the form of cash.
Sorry. Can I just follow-up on the last two things? If I look at the RTL Belgium, what's the total then outlay in terms of cash and shares for RTL Belgium? And what was the 50% investment In RTL Super or Super RTL?
Okay. Well, for Belgium, it's the total. I mean, the 3 components I mentioned is 90. 90.
90. Okay.
Yes. But a significant part of that is dividends. I mean cash in the company, which belong to the minority shareholders anyway. That was approximately 1 third. Andreas, as I said, it was RTS Treasury shares and cash, which we paid.
Zuppa RCL, we will disclose The price at the right time, it is it's not disclosed yet. So bear with me.
Okay. Thank you.
And the next question is from Nizla Naizer, Deutsche Bank. Your line is now open. Please go ahead, ma'am.
Great. Thank you. I have 3 questions from my end as well. The first is on your M and A activity, where if you consider RTL as the acquirer Rather than the seller, what sort of investment avenues would you be most interested in? And related to that, there were some media reports Speaking of RTL potentially interested in Bruna and Yaar, I hope I said that right.
Could you kind of give us your thoughts around how you view That particular addition, if it does happen to the portfolio and what sort of value that would bring to RTL as a group. My second question is on your streaming start up losses. Could you remind us again where is the bulk of these investments going into? And In the context of content, what sort of content are your streaming customers most receptive 2. And what have you learned in that process over the last couple of years?
And lastly, could you kindly give us some indication as to What Fremantle's exposure is to OTT customers versus other customers and how fast that business is potentially growing as the demand for content continues to increase. Thank you.
Great. Good. Let's start with the streaming service and start up losses. The bulk of the losses is in Germany, And the bulk of losses is driven by content investments. I mean, the investments are really threefold.
Investments in the platform, I. E. Technical platform, Investments in marketing and investments in content for the bulk is content. The content strategy of RGL, I mean, TV Now is pretty broad based. I mean, it's, of course, series and films, But it's also sports, for example, soccer, which will kick in, in a big way in summer.
It is documentaries, etcetera. So what we're doing in streaming in Germany is increasingly in Germany is to effectively replicate The breadth of our content on linear television, our positioning is that of a mainstreamer. So we our target market is the mainstream. And we believe that the mainstream We look for broad range of content. So that's and we also believe that this approach sets us apart From the U.
S. Platforms because we really spent most of our money on local content. It's a local context, something we're really good at That is how we build our linear television, and it's a much broader content proposition than what you would find on the streamers. On Free metal and OTT, well, the total revenue With the streamers in 2020 1 expected It's approximately 12% of total revenue. It's more than €200,000,000 And if you add to this the YouTube and local streamers, it is north of €250,000,000 And that will be due to approximately 14% of total revenue, and that's growing very, very significantly.
It's more than doubling year on year. Yes. Then on ACHEEN, Gruner and Jan. Gruner and Jan, as you know, is a print and digital publisher, now focused on Germany. And there's already a pretty broad cooperation in place between RTL and Bruna in 3 areas in particular.
The first is advertising sales. We have the so called Adelines, which is the largest sales house in Germany, which RTL operates. So RTL sales TV and inventory, print inventory and online inventory from RTL and Groener, but also from Akseltrener. So this is significant. And one of the reasons for market share gains, we believe, is the strength of the other lines in the cross media approach.
The second area of cooperation is content and content generation, and the third area is data and technology. And what we are now exploring is whether more cooperation between RTN and Grodha makes sense beyond the 3 areas, which I just described. We're looking into this as we speak. It's a very thorough review on which we will conclude in the 3rd quarter And which we will then communicate. On M and A, I mean, clearly, an M and A priority is and continues FreeMagle doesn't mean large scale M and A.
We're not interested in this at FreeMagle. We would add small to medium sized publishers sorry, producers. We would enter into deals with creative people who develop new formats, which we then produce And licensed worldwide via our network. And frankly, in television, I don't see a Significant M and A in terms of cash transactions. I see consolidation opportunities, and I believe that these consolidation opportunities We'll, to a very large extent, take the form of share deals.
Understood. Very helpful. Thank you. Yes.
And we haven't received any further questions. So I hand back to the speakers for closing remarks.
Great. Well, thank you so much for your interest in RTL. Thanks for your time and your questions, and we very much look forward to keeping in touch. All the best, and have a good weekend.
Ladies and gentlemen, thank you for your attendance. This call has been concluded. You may disconnect now.