Welcome to the analyst conference call for RTL Group, starting the presentation of the half year 2019 results. At our customers' request, this conference will be recorded. As a reminder, all participants will be in a listen-only mode. After the presentation, there will be the opportunity to ask questions. If any participant has difficulty hearing the conference, please press star key followed by zero on your telephone for operator assistance. May I now hand you over to Andrew Buckhurst, who will lead you through this conference. Please go ahead.
Good morning, everyone, and thank you for joining this conference call for our results for the first half of 2019. On slide two, you will find the agenda. We will start with the highlights and a quick summary of the financials, followed by a review of our main business segments. We will end with an update on our strategy and outlook. I'd like now to introduce our speakers for today, our CEO, Thomas Rabe, and the new Group COO, Elmar Heggen. I'll now hand over to Thomas, who will begin today's presentation on slide three.
Yes. Thank you, Andrew, good morning, everyone. Before starting with the financial and operational review, I would like to briefly explain the new leadership structure that we announced this morning and that is effective immediately. After 13 years as Group CFO, the board of directors has appointed Elmar Heggen to the new role of Chief Operating Officer. He will take responsibility for coordinating and further optimizing the operations across the Group's international footprint. Taking over as Chief Financial Officer is Björn Bauer. He joins from Dassault Systèmes, where he's held several senior executive positions, most recently as Executive Vice President, Corporate Controlling and Strategy. Prior to that, for a period of three years, he was the Chief Financial Officer of the U.S.-based online learning provider, Relias. He joins the executive committee alongside Elmar and myself.
Elmar, Björn, congratulations, and I look forward to working with you in your new roles. We have also established a new Group Management Committee, in short, GMC. The GMC is composed of the members of the executive committee and the CEOs of our three main business units, which are RTL Deutschland, M6, and Fremantle. The GMC brings together massive experience and different perspectives, which will drive the strategic agenda of the Group and foster cooperation. Moving on to slide four. In the first half of 2019, RTL Group continued its successful business development and to deliver on its total video strategy. Our leading market positions have resulted in operational results that are very solid. Revenue up, EBITDA broadly stable, net results up, cash flow and cash conversion up. Which means that the Group is well-positioned to continue to invest as we lead us through the current transformation cycle.
The Group's growth drivers, namely our digital and content businesses, reported very positive developments. Beyond the financial results, we have strengthened our businesses with series of alliances and partnerships from content creation, advertising sales, and advertising technology. I will come back to this later on in my presentation. Moving on to the next slide five. Revenue grew by 4.2%, our best first half year revenue growth since 2010, which leads to a record level of revenue for the first half year of RTL Group in its history. EBITDA came in at EUR 538 million, which was broadly stable on last year. High investments in programming and video-on-demand services were largely compensated for by higher profits from Fremantle and Group NBCS. Overall, this results in an EBITDA margin of 17%.
The Group's profit for the period increased substantially to EUR 443 million, which reflects our EBITDA performance and capital gains on portfolio. I'll come back to this later. Slide six. Looking at the Group's overall revenue split, the share of TV ad revenue fell to 44.3% due to the growth of content and digital. Digital revenue amounted to EUR 530 million, which is up 21% year-on-year, and now represents 16.2% of total revenue. Platform revenue was EUR 179 million, or 5.6% of Group's total revenue. Digital revenue grew significantly despite the negative effects and scope changes and the winding down of Sky Mall. All the main categories of the Group's digital revenue contributed to the growth, with video-on-demand revenue up 27% and content revenue up 89%. Moving on to the next slide.
On slide 7, we have given you an update on the KPIs that we announced in March of this year. As you can see, the growth drivers, namely video-on-demand content and digital, are intact. The number of paid video-on-demand subscribers for German and Dutch services increased by 46% to just over 1.2 million as at June 30. Fremantle's revenue was up 23%, with Drama now accounting for 20% of revenue. Revenue growth was boosted by the sale of season two of "American Gods" and "The Rain" to Amazon and Netflix, respectively. On digital, the overall MCN revenue growth was rather low, reflecting the wind down of StyleHaul. As our largest asset, Divimove achieved solid growth of close to 30%. Our AdTech business reported revenue growth of 40%, off the back of growing media spend on OTT in the U.S.
With that, I will now hand over to Elmar, who will walk you through the financials in more detail.
Thank you, Thomas. Good morning from me as well in what will be my last formal presentation in my role of CFO, to the financial community. Running now through the financial review, starting on slide nine.
As mentioned earlier by Thomas, revenue rose 4.2% to EUR 3 billion, 173 million. The group's organic revenue growth, which adjusts for scope changes and Forex, was up 4.6%. The group's cost base rose 5.6% and was largely due to an increase in the cost of live programs, mostly sports rights and program costs linked to the growth of the method top line. This results in an EBITDA of EUR 538 million for the first six months of 2019, and a margin of 17%. The group's net debt at the end of the period was EUR 739 million. Moving now on to slide number 10. The net profits attributable to shareholders for the period was up almost 24% at EUR 393 million.
From a solid EBITDA result, the net profit has been boosted by the gains generated on a number of disposals, the largest being Universum Film to KKR at the beginning of this year. A lower tax charge reflects the higher profit and loss pooling commission, the recognition of the tax losses in the U.S., and a new deferred tax asset. All elements are of a similar absolute amount. The group's strong net results translate into earnings per share of EUR 2.66. Let's now move on to cash flow on slide 11. Net cash from operating activities increased to EUR 354 million for the first half of 2019, with an income tax paid at EUR 255 million. Overall, the quarter three cash flow increased to EUR 513 million, resulting in a significantly higher cash conversion ratio of 95%, up 18 percentage points on the same period last year.
I will now hand you back to Thomas for the business review.
Yeah. Let's go to slide 13. We'll start with the business review of Mediengruppe RTL Deutschland. Our family of channels reported an audience share of 28.1%, up 0.8 percentage points, and therefore remains the clear market leader in Germany. RTL Television is the only channel in Germany with a double-digit audience share in its target group. Its audience share was up 0.3 percentage points to 11%. The net TV advertising market is estimated to have decreased by approximately 4%-4.5%, with the Mediengruppe RTL outperforming the market by around two percentage points. Accordingly, overall revenue fell only slightly, by 1.4% to EUR 1 billion and 79 million. The EBITDA performance reflects the increased program spend, mostly sports-related and video-on-demand investments. This was clearly signaled at the beginning of the year, and accordingly, EBITDA came in at EUR 330 million, down 9.1%.
This results in a very healthy EBITDA margin of 30.6%. Mediengruppe's hybrid video-on-demand offer, TV Now, had a strong start into 2019, with the number of paying subscribers growing at 36% year-on-year. With average number of monthly video views amounted to 44.5 million, up 26% year-on-year. The joint venture with ProSiebenSat.1, called d-force, was announced, and on sixth of August, received regulatory approval. It will help drive growth in the addressable TV market space, which works incredibly well, as announced by Sky recently. With higher engagement, an increase in spontaneous ad recall, and a halving of channel switching. When combined with linear, addressable TV advertising increases ad awareness by nearly a quarter. Moving on to M6 on slide 14. As you're aware, Groupe M6 reported its results at the end of July. An advertising market estimated to be stable. Groupe M6 advertising revenue grew by 2.3%.
Overall reported revenue was EUR 750 million, compared to EUR 739 million for 2018. Adjusting for scope changes following the sale in 2018 of the Football Club and RMC Sport, revenue was up 3% year-on-year. EBITDA came in at EUR 150 million, with the year-on-year performance helped by the one-off costs recorded at the level of the Girondins de Bordeaux Football Club during the first half of 2018. Audience shares reached 21.1% for the family, which was stable year-on-year. In July, M6 received regulatory approval for the acquisition of Gulli, the leader in kids TV and a highly complementary addition to our family of channels. Finally, mid of August, the regulatory approval was received for the Salto project, with the commercial offer due to launch in the first quarter of 2020. M6 team will come back to this later, will provide the technical platform for Salto.
Moving on to slide 15, RTL Nederland. The combined audience share was down at 29.9%, mainly as a result of weaker performance from our main channel, RTL 4. The television advertising market in the Netherlands was estimated to be up by 1.7% so far in 2019. RTL Nederland's lower ad revenue reflects the weaker audience performance, with overall revenue decreasing by 2.1% to EUR 236 million. The strong subscriber growth of 58%, and hence revenue performance at Videoland, which is the video-on-demand service, helped offset a large part of the advertising revenue decrease. EBITDA came in at EUR 18 million. We move on to slide 16 on Fremantle. Revenue increased strongly by 23.2% to EUR 828 million. As you can see in the revenue bridge. This was primarily driven by strong organic growth amounting to EUR 128 million, of which EUR 49 million came from digital.
Growth was driven by the sale of the second season of "American Gods" and strong performances in nearly all of Fremantle's territories. EBITDA was accordingly up at EUR 52 million, resulting in an EBITDA margin of 6.3%. Turning now to slide 18 and the start of a short strategy update. First point, alliances, partnerships, collaboration, and cooperation will be a key theme for the Group over the coming years. We believe that with our pan-European broadcasting footprint, content, and digital expertise, we are well positioned to actively shape the future of the media landscape, and much has already been done. Let me provide you with three examples. Our advertising alliance in Germany will expand significantly by representing the digital media assets of Axel Springer and Funke Mediengruppe. Our alliance in Germany reaches 99% of German households.
Second example, we entered into a sales representation agreement in the Netherlands, where we acquired BrandDeli, and in Belgium, where our sales house will start acting on behalf of TF1. On the content side, we announced the creation of the Format Creation Group, which is a RTL center and funded by our large broadcasters. As a group, we developed innovative formats with intellectual property fully owned and controlled by RTL Group. The unit will focus on factual entertainment formats and reality shows. Moving on to slide 19. As I mentioned earlier, the role now of the group's video-on-demand activities is one of our top priorities. It is also an area where we can leverage the group's scale and know-how on the technology front and creatively to programming.
On the tech front, we have taken a very recent decision to move forward in steps with the objective to form one common, fully integrated tech platform. This is based on the M6's technology that is currently or will be shortly used for Salto and in multiple territories across the RTL footprint. On the creative side, the number of exclusive titles for our video-on-demand offers continues to grow, with 48 programs exclusively on our TV Now and video-on-demand platforms. Moving on to the next slide, 20. A quick word on the group's AdTech business. As you might have seen this morning, we announced a strategic review of our AdTech business, SpotX. Mediengruppe RTL Deutschland will take over responsibility for the European operations, excluding the U.K., under the brand Smartclip.
Smartclip's objective is to create an open advertising technology development unit based on the technology developed by them and used by RTL Deutschland, to tailor this to the needs of European broadcasters and streaming services. At the same time, RTL Group has started reviewing strategic partnership options for the SpotX global business. SpotX Global is positioned as a leading platform to monetize digital video, including premium video-on-demand, and live TV streamed on any internet-connected TV device. We will continue to operate on a global basis, bringing some of the world's largest media owners, device manufacturers, platform operators, and publishers. This announcement further demonstrates our willingness to build partnerships both at European and international level, and to share technology. Moving on to priorities on slide 21. Clearly, our first priority is operational performance and achieving the targets we find in our outlook statement, to which I will come in a minute.
Secondly, we will build national streaming champions to benefit from the rise of non-linear viewing. This will require us to invest in technology, marketing, and exclusive content. Thirdly, we'll accelerate the development of our own IP via Fremantle and our broadcasters. Fourthly, we'll create Europe's leading AdTech development unit to serve our and third-party broadcaster needs. On the last two priorities, we will continue to pursue internal and external collaboration and partnership options in the fields of advertising sales, content creation, sourcing, and in data and technology, and in particular, advertising and video-on-demand technology. This brings us to the outlook statement. In terms of guidance, we update and confirm the outlook given in March and most recently on 16th of May 2019. We continue to expect a moderate revenue growth and a moderate EBITDA decrease before restructuring costs.
Within our revenue guidance, we've increased Fremantle's organic revenue growth rate for 2019 to between 10% and 12% plus from 4%-7%. We expect our revenue guidance to be achieved despite the impact of disposals of a number of businesses. Lastly, following a review with the board of directors, we decided to simplify our dividend policy, which will be effective immediately. The new dividend policy is based on the group's full-year net results, adjusted for any material non-cash impact, such as, for example, goodwill impairments. For clarity's sake, we will no longer be paying an interim dividend and will revert to the market standard of a term of a once-a-year dividend payment. The new dividend policy targets a payout ratio of at least 80% of the adjusted full-year net results as defined.
The payout ratio compares favorably with our larger competitors and demonstrates our faith in our businesses, but also our focus on organic growth going forward. This concludes the forward section of the call. Thank you for listening to us. We are now happy to take your questions.
Dear ladies and gentlemen, if you have a question for our speakers, please dial 01 on your telephone keypad now to unmute you. Once your name has been announced, you can ask a question. If you find your question is answered before it's your turn to speak, you can dial * two to uncue your question. If you are using speaker equipment today, please lift the handset before making your selection. One moment please for the first question. The first question is from Annick Baas, Exane BNP Paribas. Your line is now open.
Good morning. My first question is, with the group guidance reiterated that the Fremantle guidance improved, what is going to be worse than expected in the second half of this year? Also related to Fremantle, so the 10%-12% guidance, that means that everything which is at risk of falling into next year would mean you would have 10% organic revenue growth. My second one is if you could give us an indication of the ad market performance for Q3 so far. Thirdly, if you could just confirm the leverage target remains unchanged despite the tweaked dividend policy. Thank you.
Thomas.
Thomas, you want to comment on the leverage target?
Yes. This will remain unchanged. We continue to strive for a net debt to EBITDA between one target one time. The provision that we have added to the dividend policy will not have any impact on our leverage target. Briefly on Fremantle, because Fremantle has already shown a growth north of 20% for the first six months, we've decided to upgrade our full year expectation from 4%-7%, to 10%-12%, because otherwise it would have meant that we expect almost negative growth for the second half, which we don't. Fremantle, even though it has a weight of roughly 20% in the overall revenue mix, it won't change our overall revenue guidance. We continue to expect that for RTL Group, we will see revenue growth of between 2.5%-5% for the full year of 2019.
Yeah, we're looking at the revenue guidance and its composition. I mean, clearly Fremantle and digital are growing strongly. Fremantle stronger than we expected. That's why we increased the outlook for Fremantle. What you've got to take into account as well are scope changes in the revenue outlook. In particular, the disposal of Universum Film and the wind down of StyleHaul. There's no weakening of other businesses. If you look at revenue mix and contribution for staff, it is certainly right to say that broadcasting businesses have not grown, reflecting advertising market conditions. Broadcasting revenue and advertising revenue has been down. On the Q3, first thing to say, of course, Q3 is not the most important quarter in our business. It's the smallest quarter. Based on the numbers which we're seeing, there is a mixed picture. July was relatively strong in Germany. August was somewhat weaker.
Frankly, the focus is now on the new season starting in September. Given that the market is frankly quite volatile and advertising bookings become more and more short term, it is difficult today to make a clear prediction for September. As I said, the important thing for you is to know that we are confirming our outlook for the full year on the revenue and EBITDA base. We're confident to do this. We wouldn't be able to be confident on this without having some confidence in the performance of the advertising markets in the second half of the year.
Wait, can I just ask one more question? I'm sorry.
Yep.
On the 3 million VOD subs, can you just remind us how you expect the ramp-up to be? I guess if you add 200,000 per half year, you won't get to the target for 2021. I suspect you might have a different marketing strategy in place that suggests the ramp-up is going to be more significant in the coming quarters.
Yeah, well, absolutely. I mean, first of all, we're at 1.2. As I said, significant growth compared to the same time last year, almost 50%, which we consider to be significant. Our operations in Netherlands Videoland exceed our expectations. Same applies to RTL in Germany. Don't forget, RTL Germany, TV Now was relaunched in December of last year. We're ramping up investment. As I said before, our investment was threefold. Platform, which drives user experience, which is absolutely key. Here, clearly the market standard is set by Netflix and Amazon Prime. Secondly, marketing and thirdly, content. We're really ramping up. We're very confident to get to the 3 million mark, which we announced earlier this year. We will also, in the course of this autumn, review our ambition level in video-on-demand, because it's fair to say that since we made the last announcement, the competitive environment has changed.
We're talking about Netflix and Amazon Prime. Now we know that Disney+ is going to come to Europe and Apple TV at some point. The competitive landscape is changing. It shows that the online video market is highly attractive. We are deeply convinced that with our strategy, which is based on local content, we'll be successful. There are many examples for this in other territories and regions. We'll ramp up the investments, but we're certainly going to review our ambition level in the course of autumn, and in all likelihood, are going to increase our investment in video-on-demand going forward.
Thank you.
Next question is from Christopher Johnen, HSBC. Your line is now open.
Yes, morning, guys. Thanks for taking my questions. I'd like to take them one by one. First, Thomas, maybe you could give us a view on consolidation. If you would confirm that you're not a seller of broadcasting assets, would you say that you are in theory a buyer, or how should we see consolidation?
Well, our view on consolidation is that the consolidation, if you look at European markets, is actually quite advanced. I mean, just look at the German television market and combine advertising market share of RTL and ProSieben, and then you make the same comparison in the U.S. and you look at the combined advertising market share of the two largest networks or broadcasters, you see that the German market is much more consolidated. That's the first point. Second point is we will continue to consolidate within our existing broadcasting footprint, and that is demonstrated by the acquisition of M6. This makes perfect sense, as we said before, because kids' TV is highly attractive. It's very complimentary to the family of channels at M6, and highly synergistic both on the cost and on the revenue side. We would pursue similar opportunities in other markets in which we operate.
Let me say very clearly, competition law is a real obstacle. Competition authorities have a very traditional, a very historic view on markets and relevant markets and competition. That is a real obstacle for further consolidation in the markets in which we operate, for example, in Germany. We are consolidators within our footprint, and we are certainly interested in growing our Fremantle business, growing it primarily organically and with, I'd say, very smart agreements with creatives, producers, format developers and the like. As I said before, in the context of the dividend policy, we assume that growth of RTL would primarily be organic going forward, but we're interested in consolidation opportunities that exist, which require M&A. We use M&A.
Very clear. A second question on Luxembourg. It seems that still there's nothing precise here to be announced yet, but maybe you could still share a bit of a view on the scope of restructuring. There's also still, you have a couple billion in potential tax loss carryforwards in the market. If you see any sort of changes here, any sort of early comments on Luxembourg would be my second question.
Well, absolutely. I'll put this in a slightly broader context. We announced yesterday that we would reduce our headcount in Luxembourg, which is 1,490, cross corporate functions and service provider functions by one third, and would move a significant part of the corporate staff functions to Cologne. The effect will be manifold. First effect, obviously, is a cost reduction of direct personnel costs and indirect personnel costs. Secondly, in Cologne, we will be able to make use of our corporate costs in terms of tax deductibility, which is not possible in Luxembourg because our Luxembourg activities are not profitable, and we have significant tax loss carryforward for which there's limited use. This reorganization of the corporate center will be implemented in the next month. There's an information consultation process, which is described in detail in Luxembourg labor law.
This would start next week, and we are confident that we'll complete it by the end of the year, and that we will be up and running in the new structure, much smaller, but hopefully also more effective in the course of the first half of 2020. The additional benefits of doing what we're doing are as follows. First of all, running the RTL Group out of Köln, at least in part, means that we will be able to make use of the resources of RTL Deutschland, which is by far our largest business unit. Secondly, to be honest, the restructuring or the reorganization which we're undertaking at the level of corporate is clearly the beginning.
It is absolutely clear in our minds that we will have to make cost reductions across the board to be able to invest significantly in the new businesses, which we described as advertising technology and video on-demand technology, marketing, and content. What we are effectively doing is we are reshuffling resources from traditional businesses to new businesses. That unfortunately requires restructuring, which we are undertaking in Luxembourg, but there is also some restructuring in RTL Deutschland, and we are winding down Skyfall, which is effectively also restructuring. It is a much broader theme applicable to RTL Group, but frankly, to all companies I know in many different sectors. As I said, not necessarily just to reduce costs, but to free up resources to invest in new businesses and to invest in the future of this company. That is what we are doing.
Okay, very clear. A last set of questions on the AdTech part of the business.
Yes.
It seems that between splitting up SpotX and focus on U.S. versus EU, it also seems that there's somewhat of a different view on investing in the two businesses. What I could use some clarification on would be what looking for a strategic partner in the U.S. really means, whether I'm right thinking that you don't see yourself investing in both platforms. Related to that, I'm also not exactly clear on what you mean by an open platform for Smartclip. Does that mean you're open to broadcasters taking equity? Are you open to just licensing out the product and development? What does the open platform part really mean?
Yep. Strategic partnerships in the U.S. SpotX today is a standalone operator in the U.S. market. We're not sure that that would be the best positioning going forward. SpotX is a highly attractive business that has very successfully migrated to the OTT business, which drives the growth, which I've just explained. We don't think, as I said, that will be as strong as we are today as a standalone business in trust for 18 months. A significant interest in our tech businesses. Our objective is not to sell the business, but to find a strong U.S. partner to invest in the platform, to develop it further, to cater for the needs of the U.S. market. When it comes to Europe and to Smartclip, open means exactly what you said.
We are deeply convinced that if we don't want to become totally dependent on the U.S. tech platforms, we have to build our own technology. The two areas of technology which are most relevant for broadcasters, this is video-on-demand technology and advertising technology. Our philosophy on video-on-demand and advertising technology is that the best way to invest in these platforms is to share these platforms and to share the cost. That's why we said from the beginning that our video-on-demand technology platform, Bedrock, which is operated by Incipit, is an open platform. It's now focused on the launch of Zatoo, but it's already providing its services to a large number of RTL broadcasters, and there's interest from other parties, broadcasters outside of the RTL Group, to use the platform. Exactly the same philosophy applies to advertising technology.
We have started discussions with a number of large European broadcasters, and there's real interest in pursuing these discussions, which we'll do in the course of autumn of this year. We see ourselves currently as a driver of this, providing these platforms to European markets, sharing these resources with other broadcasters, which means that we'll be able to build better platforms together at lower costs. That's the idea.
Okay. Very clear. A final one. Could you maybe give us, since we don't have you on record, commenting on addressable TV, what's your personal view, in terms of the potential of addressable? Maybe starting with Germany, where your competitor has put out a target of as much as, I think, a quarter of overall TV advertising potentially becoming addressable in a, I think, five-year period. Do you have a view on it this year?
Well, yes, we have a view on this, and we have looked at this in quite a bit of detail. As I think we said, there are really two levels in our business. One is reach, in particular non-linear reach, and second is monetization of the reach, better monetization via targeting, and addressable TV is part of the targeting. No doubt, it is a subject we are very interested in. Smartclip offers technology for addressable TV based on the HbbTV standard, which we have successfully applied in News Push, frankly. For the role of addressable TV in a meaningful way, a number of conditions need to be fulfilled, including agreement with distributors and the like. We think the potential is huge. We see the significant price uptick which you achieve on advertising inventory by targeting, by addressing advertising, to put it in these terms.
The share today, the market share today, is very low, not only in Europe, but also in the U.S. Everybody sees the benefit of addressable TV. Everybody wants to do it, there's a number of significant technical and other hurdles to take. It's one of our focus areas. As I said before, we've entered into a partnership with ProSieben on d-force. d-force is effectively a demand-side platform for addressable TV. If you want to book addressable TV in Germany, you've got to go via d-force to book this on ProSieben and RTL. We think this is a pretty solid offer, by the way, shows that RTL and ProSieben are willing and open-minded to work together where this makes sense.
Okay. Very clear. I'll leave it at that. Thank you.
The next question is from Mr. Zeghir, Deutsche Bank. Your line is open.
Hi there. It's Laurie here from Deutsche. On the dividend, you said over 80%, and that compares with the 50%-75% that you had on the final dividend before. We had got used, and you've been paying an interim for the past few years. You've been basically tracking about EUR 4 total DPS payout. Are you still committed to the EUR 4 payout for this year and for next year, given the guidance you've gotten? Second question is valuation for SpotX. Just thinking about potential partners here if they were to take equity stakes. I'm estimating here that revenues are about EUR 140 million for the non-European sales for full year. Would a 3 to 4 times sales multiple be what you would be looking at as a fair valuation for that group?
Third question, you said you'd need to review the 3 million subscriber target for on-demand, given the competitive launches. Is it fair to assume this 3 million target is going to be revised downwards, and as a result, are EBITDA losses going to be higher on on-demand? Thank you.
Elmar, maybe on the dividend.
Yeah. Laurie, what we did is we obviously checked what the application of the new policy would have meant for the years 2015, 2016, 2017, and 2018, and can confirm that would have also led to payouts of four EUR a share. The dividend policy for the last years did not result in material differences. The dividend policy that we have applied until so far. Again, for the future, Laurie, you know that we will continue to invest in some of the businesses that we just talked about, the video on demand offers and so forth, we will see whether or not we believe that it would be in the best interest of RTL Group to accelerate its investment. That probably already leads to the video on demand question that you have. Yeah.
Just on dividends. I'd maybe even go a step further and say that if we achieve our outlook and statement for the year, and given the capital gains which we've already realized in the first half of the year on the disposal of Universum Film, I'm confident, if we achieve the outlook, then the dividend is likely to be EUR 4. It's clear there's no certainty on this. It's a dividend. It's not a fixed income instrument, right? Secondly, on advertising technology and the valuation of SpotX, I really don't want to speculate. As I'm sure you know, there are a number of listed AdTech companies in the market. If you look at the valuation of the AdTech business, the key driver is top-line growth. As I just said, top line of SpotX was up by 40%.
It was not only up by 40%, but we believe that the quality of the revenue significantly increased because the share of OTT significantly increased, and that's a big growth driver in the U.S. market. As I said, we are at the beginning of a process. The market will tell us who the right partner is and really what the right valuation is. Our primary objective is to find a good strategic positioning for SpotX, and we'll deal with the valuation in this context. As we said, we're convinced that SpotX is a highly valuable business. On the subscribers, frankly, the contrary to what you said, apply. If I say we review our ambition level, it's certainly not downwards but upwards.
Subject to review, we're going to undertake in autumn, frankly, based on the first numbers which I've seen, we're going to increase our ambition level significantly. That clearly means, let's not fool ourselves. If we want to grow the business faster and achieve a higher subscriber base, we'll have to invest more and faster, and this could have a negative impact on short-term profitability. Quite frankly, that I think is what investors should expect from us. Not only to make sure that short-term profitability is intact and we pay dividends, but that we make good use of the assets we have and the competencies, develop in the future of our business on the basis of a strategy in video on demand, which I think is highly convincing based on local content.
We have a number of territories, take the example of India, take the example of Southeast Asia, or take the example of Scandinavia. Local players with local content offers outperform Netflix and Amazon Prime in number of subscribers. We think our model works, but it requires a real effort and a repositioning of efforts regularly in light of the changing competition.
Okay. You've previously spoken about a break-even for video on demand for 2021. Is that going to have to be pushed out now on these new investments?
Honestly, it's too early to tell. I think honestly it would be wrong, given the uncertainties in the market and the significant transformation of the business as is required to make statements like this with this level of precision. It is just not possible. As I said, we are in all likelihood going to increase our level of ambition, primarily measured in terms of subscribers and revenues resulting from that, and we're going to invest accordingly. We believe that the group is sufficiently profitable to afford to do this. Just take the example of RTL Deutschland. Despite a reduction in profitability in the first half of the year, which is due to program investments, primarily sports rights on the main channel and video on demand, we generated an EBITDA margin of 30%, which is very healthy.
I also said we're not going to make significant M&A except market consolidation and maybe some content, which means that we grow the business organically. That at least partly goes through P&L and has an impact on profitability. It's too early to tell now. We'll give you a full update on our revised plans at the latest when we present the full-year numbers. I can tell you based on preliminary plans, the ambition level will be significantly higher.
Thank you.
The next question is from Conor O'Shea, Kepler Cheuvreux . You're unmuted.
Yeah. Yes. Thank you. Morning, everybody. Three questions from my side. Firstly, just to follow up on the additional investments in SVOD and TV Now. You mentioned, Thomas, on the call that the d-force platform was an example of how the main broadcasters can work together. Obviously, you're not doing that in Germany on SVOD. ProSieben has managed to get content from Discovery and the public stations and so on. Can you just respond in terms of the reasons for going it alone, and is there a potential to come back on that decision and go a different way in the future as part of the review of the ongoing investments in the fall? As a first question. Second question, just on the German market. I think you said you'd outperformed the market by between 2% and 2.5% in the first half of the year.
Just wondering, was that roughly even between the first quarter and the second quarter, or was there a significant difference in that outperformance? Last question on the Netherlands business.
Noting that the TV market was up in the first half of the year by 1.5%, you underperformed that in a non-sports year. It's somewhat surprising to see that market, which is more structurally challenged because of the high penetration of Netflix and so on, in positive territory. Can you maybe explain why the overall market is growing? Thank you.
All right. Let's start with the situation in Germany, and let me make a more general point. The fact that we are building Salto in partnership with TF1 and France Télévisions show that we're open-minded on joining forces on video on demand and creating strong local players. As I said before, we obtained regulatory approvals. We're building the platform, and we launched the service, and the partners will launch the service in Q1 2020. That's one approach. The approach in Germany is slightly different.
If you look at TV Now today and Joyn, these are two very different businesses. I don't know whether you've ever used TV Now or Joyn. Joyn is not a pay offer. It's just not a TV Now business. At this stage, frankly, it just doesn't make sense to join forces. We're really talking about different businesses. I'm not going to rule out anything in the future because I think this would be foolish given the level of uncertainty. We are off to a very good start on TV Now, which business is run jointly with our traditional TV business of RTL. I think that in video on-demand, time to market is of essence. I don't want to waste my time negotiating joint ventures and partnership agreements. Frankly, I don't know whether the German competition authorities would allow a tie-up of TV Now and Joyn.
Just by way of history, but nonetheless interestingly, ProSieben and RTL had the intention to build a joint video streaming platform many years ago, and we ended up being fined by the German competition authority. Given all of this uncertainty, including on the regulatory side, our focus in Germany is building TV Now. We think we've got a very nice advantage because we're well-positioned. The other thing which we have in Germany, which I'm sure you talked about with my colleagues in the past, is that we've got very strong local content because the strategy of RTL has been for many, many years to replace international content with German content, which we produce or have others produce, and which we own. That is clearly the basis for a video on-demand service, and we believe this puts us in a very, very strong competitive position.
In Germany, we are very happy where we are. We are also talking to the public service broadcasters to license content. We're very confident that we'll make progress in the course of time. At this point, we don't think it would be in our interest to join forces with ProSieben. The next question was on the Netherlands, right? German ad market. Sorry, German ad market. Excuse me. With our estimate, you know that there's no official data here, right? Our estimate, because the market is effectively RTL and ProSieben, and a bit of public service broadcasters, a few smaller operators. We think the market was down by 5.5% in the first quarter and by 3.2% in the second quarter. We were down by 4.4% in the first quarter and by 0.5% in the second quarter.
We increased our outperformance of the market, so to say, in the second quarter. On the Netherlands. Yeah, revenue was slightly down 2.1 to 10. We have a loss in advertising revenue that has been partly compensated by additional revenue coming from Videoland. We know that the Netherlands are a GRP-driven market, and we have seen slight decreases in terms of audit performance, mainly on the main channel, RTL 4, that has led to the fact that we have lost advertising revenue. We hope that the strengthening of the grid will help us to gain higher audits so that we can catch up for the course of the year. Okay, that makes sense. Why was the overall market up in the first half of the year? Well, it's surprising. The main reason for this is that advertising inventory was up.
Surprisingly, and maybe it's good news to everybody, television viewing was up in the Netherlands in the first six months of the year. Remember, we've seen significant decline, I believe between 5% and 8% in the last years. Viewing was up by, I believe, 1 or 2 percentage points in the first half of the year. This is a reversal of trend that people are going back to linear television. I don't think so. This was partly driven by weather, which was very good in 2018, not good in 2019. The better the weather, the lower the viewing. The worse the weather, the higher the viewing, this maybe benefited from weather which was worse than the prior year. It's positive, of course.
More inventory in the market means more inventory to be sold, and therefore everything else remaining the same, in particular price levels. Advertising revenue up. Fierce competition in the market with Talpa TV in particular, was also an aggressive sales approach of the public channels, which, as you know, compete with us on linear broadcasting currently without restrictions on advertising, but the latter may change in the future. Okay, very clear. Thank you.
The next question is from Julien Roch, Barclays. You are now open.
Good morning. My first question is on the restructuring, moving most of your Luxembourg operation to Köln. Could we have the cost of the restructuring this year, and then the cost saving generated next year? Number one. Number two, you said there would be some tax benefit because you had tax loss carryforward that were stuck in Luxembourg you could not use. Could we have the impact on the tax rate, and the size of those tax loss carryforward? That's my second question. The third question is you gave us ad trend in Germany for July and August, but you didn't say anything about France, Spain, Belgium, Netherlands. Fourth question is, could we have SpotX revenue in 2018 outside of Europe, i.e., mostly U.S., i.e., the biggest you will have a partner joining?
Lastly, can we have a split of the 1.2 million paying subs between Germany and the Netherlands? Thank you.
Julien, I'll start with the restructuring and the tax questions. You should know that in the first six months of 2019, we already have in EUR 18 million worth of restructuring charges. Already in the first half, we've had EUR 18 million worth of restructuring charges. We will only start the social dialogue as of next week, as Thomas mentioned earlier. It's a bit early, but if you want to feed your models, I think it would be wise to double up the restructuring charges. I think that it is fair to assume that we should expect something around EUR 35 million-EUR 40 million for the full of 2019.
Briefly on the tax benefit, if we were to successfully move costs that currently is based in Luxembourg into the German environment, we'll automatically benefit from the possibility to include this in our tax pool, and therewith, the cost will basically reduce by the German tax rate, which is 31.5%. There will be a mechanical benefit of shifting costs that are currently located in Luxembourg to Germany, and that will lead us to an automatic saving of 31.5%.
Roughly how much of the cost would move from Luxembourg to Germany so we can calculate the benefit?
Honestly, we need to have discussions with both the staff representatives and the unions to form a better picture on what we talk about, and I wouldn't want to preempt that. I think we already mentioned the size of the restructuring. I think that gives you already a quite good idea on what I'd like you to talk about. In terms of the subscribers, split between Netherlands and Germany, I assume it's approximately 50/50 at this stage. On SpotX, we don't really break down these numbers further, but assume that more than two-thirds of the revenue is in the U.S. On the advertising market in summer, as I said before, these are small months, so we shouldn't read too much into the month. There was a mixed picture, but there was a slightly positive trend in most markets in July, and it was slightly different in August.
As I said, let's not read too much into this. This doesn't tell us much for the all-important September, October, November, December period, which drives more than 40% of the advertising revenue in the year.
Thank you. Just to follow up on the restructuring. The cost saving generated by the restructuring in 2020, is it too early as well, or could we have a sense?
It really is too early. It's significant, but it's too early. We'll get back to you when we present the full year numbers. We really can't do this. We informed staff yesterday. We are starting discussions with the staff representatives next week. The plans will be refined in the next week. The plans are currently preliminary. We wouldn't be talking about this if this was not significant, but it's really too early to say precise numbers. It would be wrong, and I wouldn't say it would be misleading, but it would be wrong vis-à-vis our employees and others. We don't want to do this at this stage. Yeah. 2020 is expected to be a transition year.
Yeah.
I think it will take us until 2021 to see benefits in full swing.
Okay. Thank you.
You're welcome.
At the moment, there are no further questions. As a reminder, if you would like to ask a question, please press zero one on your telephone. We have another question. It is from Richard Eary. Please introduce your company's name when you like, thanks.
Yeah. Hi, it's Richard Eary from UBS. Just a couple of questions from me, just on clarity. If you look at, obviously, the wind down of StyleHaul, and when you get the impact on the MCN revenue number in the first half, how much is StyleHaul revenues out of the EUR 163 million? That would be the first question.
Yeah. No, we're checking the numbers, just a second. BroadbandTV was up as 30% in the first half. Stardoll was, of course, down. The MCN businesses, I believe, were up by. Do we have the numbers?
Drop 9% overall. Yeah, with a MCN plus MPN approximately 10%. It's a mixed one. StyleHaul down, BroadbandTV up, Divimove and United Screens up as well. Starting percentage terms, StyleHaul is down about 40%. Yeah. It will be down to-
How much of the EUR 253 is StyleHaul?
20%.
20% of total. Okay.
It will go to zero by October and will be zero over the next year on a full year basis.
Yeah. Okay. I presume that we'll get write-downs in the second half of that investment, or all the write-downs will be done on StyleHaul.
No. Everything has been done last year. There will be no further write-downs.
Okay.
There's been some clean up in the first half. The goodwill impairment, as you know, was booked last year. There was more clean up in the first half of the year. Actually, without the costs related to StyleHaul, EBITDA in the first half would have been higher than last year's. This had a big impact. Expect a nice swing next year. We expect the MPN business to be negative around EUR -25 this year. We expect them to be maximum EUR -2 or EUR -3 next year.
We'll see a very nice swing in the MPN business, because we'll be focusing on the European operations of Divimove and United Screens, and we're also changing the business model, moving away to the extent possible from indirect sales via YouTube to businesses which have more attractive margins like branded content, video production, effective video production, rights management, talent representation, and this kind of stuff.
Just to be clear again, you said that you expect the MCN business this year to be 25% because of StyleHaul coming out.
No. To generate an EBITDA of minus 25%.
Okay. I'm sorry.
25 million. Sorry. No, I'm getting confused. Next year, this minus EUR 25 should go to approximately minus EUR two or EUR three. What I'm saying is you'll see a very nice EBITDA swing on the MCN business year-on-year.
Okay. That's clear.
Yeah.
The second question just comes in terms of the other sort of moving parts. Some of Universum, I presume that's very low, single digit, basically whoever uses it, or it comes out. Where is that booked? Is that booked in other? That's the reason for the other thing down.
Yeah. No, that's part of RTL Deutschland, and it's approximately EUR 70 million on an annual basis.
Seven zero or one seven?
Seven zero.
Okay.
On a full year basis. This year, clearly we deconsolidated the business, I believe in May.
April.
April or May. You have strong revenue of EUR 40,000 and our revenue this year and EUR 0 next year.
Okay. The benefits of Duely as we wind up, given obviously Q4 is going to be the big impact when that deal closes.
Yep. This will have a nice impact on revenue and profitability because the profitability of this business is geared towards the fourth quarter. The timing of the deal could not be much better.
Rough magnitude in terms of revenues for Q4 for Divimove?
We don't provide this number. Please ask me, please.
Okay, fair. Just the last question, just on total viewing. A number of your competitors, particularly ProSieben and ITV, are now sort of looking at providing total viewing numbers. Including just linear and non-linear to obviously track how their content is resonating with consumers. I'm just wondering whether you have any stats that you can share so we can track linear and non-linear performance in terms of viewing hours or viewing minutes.
First of all, on viewing and linear television, I think the numbers are in the public domain, right? If you like.
Yeah, I was more looking at the.
Well, we don't have a combined view. As you know, even on linear TV, the measurement of viewing time is incomplete, and mobile viewing is not captured and so on. The numbers are actually understated, but we are now seeing progress being made in capturing the full viewing time and the full audience. This will actually have a positive impact on television viewing, which I think will become more transparent in the course of next year and the year after, as the companies measuring audience improve their systems. In terms of viewing time, at RTL Deutschland, that is our channels and our digital offers, the viewing time in, give you an example, Q2 2018 was that a million hours, so 4,368.62. In Q2 2019 was 4,567. It was actually up by 409, I believe, million hours, which is 4.8%. Right? That's our estimate.
That includes all channels, the traditional channels, also all the digital offers. It shows that combined, we're actually not in a bad shape. If you look at the same numbers on a half-year basis, half-year 2019 to half-year 2018, the viewing time is actually only down by 0.8%. What is also clear is that the share of younger viewers in digital offers is higher. It is lower in the traditional viewing. Via the digital offers, we partly compensate for the decline in younger demos in the traditional viewing.
Why was Q2 up 4.8% and H1 was down -0.8%?
Look, I mean, there are all sorts of factors. This relates, as I said before, partly to the weather. It sounds a bit bizarre, but it is true. There's a strong correlation between viewing and the weather, in particular on a year-on-year comparison. It also depends on programming, et cetera. There are many factors. The other thing is, of course, the audience share, as we said before, of RTL Deutschland has increased year-on-year for the family of channels and for the main channels. There are many factors influencing this. It would, I think, go a little bit too far to try to depict all of them, Thomas. I think the public channels had a very strong start into Q1.
Yeah.
On German linear TV, with some very big formats.
Yeah.
Thomas said, it's quite complicated. There are so many moving parts. There's not a simple explanation for this. I think the overall statement of saying that in Germany, where linear viewing has been down quite a bit, total viewing, including online offers, has actually been relatively stable year-on-year. I think it's a positive message to you.
Just one final question, going back to 3 million subs on VOD. What was the actual target by when? Obviously you talked about EUR 150 million increase in the total revenues from SVOD and AVOD by 2021. Where was the 3 million target?
In 2021?
Yeah.
2021, absolutely. Yeah, no, absolutely. These are numbers comparable. End of 2021, of course.
Okay.
Two and a half years to go.
Okay. Thank you very much, dude.
On the old metric.
On the old metric, exactly. Good. Any other questions?
The last question is from Patrick Schmidt, Warburg Research. Your line is now open.
Yeah, thank you. Just one follow-up on the restructuring costs, and referring to StyleHaul. Should we expect anything in H2 as well? You also mentioned some restructuring at the German media group. Your indication of EUR 35 million-EUR 40 million, is that including everything, or is that mainly the overall headcount reduction and Luxembourg moving to Germany, or is there some extra bits?
On StyleHaul, for the second half, you should not expect any additional restructuring charges, as they have all been booked in the first half. The kind of EUR 35 million-EUR 40 million range we gave for the full year 2019 would include also restructurings that we are currently pursuing for our German business. It would be all included, so to say.
Okay. In terms of your guidance, this is before restructuring costs, we could deduct these EUR 35 million-EUR 40 million from your given range from the -2.5% to -5%, correct?
That's correct. That's why we clarified this at this point. Looking at the first half of the year, our EBITA was down by less than 2%. As I said, with now the StyleHaul restructuring effects, which we did not normalize in the first half of the year, our EBITA would have actually been higher in the first half of the year compared to 2018, which means that for the first half 2019, we're well ahead of the outlook we provided. That should give you a little bit of comfort that we achieve the outlook for -2.5% to -5% on EBITA on a full year basis. As I said, largely depending on advertising market performance in our two largest markets, Germany and France, and these markets are unfortunately very hard to read.
Okay. Thank you very much. That's absolutely clear. Thank you.
There are no further questions. I hand back to the speakers.
Thank you very much, everyone, for joining the call today. Thank you to our speakers, Thomas and Thomas. Obviously, we see each other at some of the conferences over the next few months, and we'll be in touch. You'll see the management team in March next year around the full year results. Thank you and have a good day.
Thank you.
Thank you. Bye-bye.
Ladies and gentlemen, thank you for your attendance. This call has been concluded. You may disconnect.