Welcome to the first half 2018 results conference call of RTL Group. Today's conference is being recorded. At this time, I would like to turn the conference over to Andrew Buckler. Please go ahead.
Good morning, everyone. Thank you for joining this conference call for our results for the first half of 2018. 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, Bert Habets, and the Group CFO, Elmar Heggen. I will now hand over to Bert, who will begin today's presentation on slide three.
Thank you, Andrew. Good morning, everybody. In the first half of 2018, RTL Group continued its successful business development and Total Video strategy. More importantly, we continue to look ahead with a high degree of confidence because we are acting from a position of strength. We are all experiencing the rapid growth of more direct-to-consumer video offers, marking the biggest shift in the economics of the TV industry in decades. RTL Group is not immune to this. In fact, we are actively embracing it as we are at the start of a fundamental change for the group. That is why we redefined TV into Total Video three years ago. With our very strong market positions, we have the power to accelerate our Total Video strategy. Because we have a very highly profitable cash-generating core business in TV broadcasting.
Fremantle has successfully branched out into scripted drama, and in digital video, we are among the leaders in [FX] and on the YouTube ecosystem. This portfolio makes RTL Group the Pan-European leader in Total Video. A portfolio that continues to deliver a very strong financial performance. First half year revenue was up for the fourth consecutive year and surpassed the EUR 3 billion mark for the first time. We'll move on to slide number four. The good results for the first half of 2018 highlight once again the key strength of RTL Group. Our long-term track record is based on a business model that stands for resilient top-line growth, a highly diversified revenue mix, and high-quality earnings. This allow us to combine attractive dividends with significant growth initiatives, as demonstrated by the growth of Fremantle and our digital revenues.
Above all, our clear focus on local exclusive content is and will remain the power engine for all our Total Video offers. We'll move on to slide number five. These pleasing results come despite the impact of the various global sports events, the rising number of non-linear platforms, and trade and political attentions on a global and European scale. The second quarter results are especially strong, with revenue growth of 3.6% outstripped by EBITDA growth of 4.7%. These impressive Q2 numbers help the group to a very strong first half year result, with growth repeated in both revenues and EBITDA. We'll move on to the next slide. Looking at the group's overall revenue split, growth in content and digital revenues have resulted in TV ad revenue coming in just below the 50% mark, at 48%. This is a good balance between growth, profitability, and cash generation.
On the right-hand side of the chart, you can see that digital revenues amounted EUR 424 million, with platform revenues growing to a level of EUR 167. Digital revenue now represents almost 13.9%, and platform revenues is at a level of 5.5% of RTL Group's total revenue. Digital revenue grew by 9% year-on-year, which was impacted heavily by foreign exchange rate effects. Once adjusted for these, the growth rate rises to 14% year-on-year, with almost 16% in the second quarter alone. Moving on to the next slide. RTL Group will foster more organic growth initiatives across all our main businesses. Firstly, by building video-on-demand services that attract mass audiences across all content genres. Secondly, by continuing Fremantle's push into scripted drama. Thirdly, we continue to build on our MCN and FX tech to deliver a truly global online video offer.
With that, I will now hand over to Elmar, who will talk you through the financials.
Thank you, Bert. Good morning from me as well.
Turning now to the financial review, starting on slide nine. Before moving to the first half year results, I would like to say a few words on the results of the second quarter of 2018. As you can see on slide nine, revenue for the period was up 3.6% to EUR 1.63 billion. Main drivers of this revenue development are as follows. Fremantle reported growth of 9%, despite having a very tough comp following the launch of American Gods in 2017, and continued FOREX headwinds. RTL Nederland reported growth of 6.5%, as both advertising and non-advertising revenue continued to grow. Finally, BroadbandTV reported a quarterly growth rate that exceeded 35%. This good growth in revenue was translated into operating profit as both EBITDA and EBITA rose 4.7% and 7.3% respectively, resulting in a margin improvement across the board.
Moving on to slide 10, a summary of the results for the first six months of 2018. Revenue rose 2.3% to EUR 3.046 billion. Underlying revenue, adjusted for scope changes and FOREX, was up 3.7%. This was the highest organic revenue growth rate in the first half since 2010. The overall negative FOREX impact, as at the end of June, on the reported revenue amounted to EUR 59 million. The group's cost base rose 1.9% and was largely due to an increase in program rights and personnel costs, the majority which are due to several payments following the restructurings in Belgium and the Netherlands, and at the football club, Girondins de Bordeaux. This results in an EBITDA of EUR 638 million for the first six months of 2018, and a stable margin well above 20%.
The group's net debt at the end of the period was EUR 943 million, down slightly when compared to the same period last year. Following this good set of results, the board has approved an interim dividend payment amounting to EUR 1 per share. This will be paid out on 6th September, with the share going ex-dividend on the 4th of September. Moving on to slide 11. The net profit attributable to RTL Group shareholders for the period was stable at EUR 318 million, despite the higher EBITDA. This is almost solely due to the higher tax charge, which incorporates lower deferred tax assets following a reduction in local tax rates. The group's net result translates into an earnings per share of EUR 2.07. Moving now to cash flow on slide 12. Net cash from operating activities increased to EUR 226 million for the first half of 2018.
The income tax paid rose to EUR 280 million, largely as a result of lower receipts from the German tax pooling and higher tax payments in the U.S., reflecting the growth of Fremantle in this important territory. Overall, reported free cash flow was broadly stable at EUR 420 million, resulting in a cash conversion of 77%. I will now hand you back over to Bert for the business review.
Thank you, Elmar. Starting with the business review of Mediengruppe on slide number 14. As expected, audience shares in 2018 have been weaker than the prior year. Our family of channels reported an audience share of 27.3% and were the clear market in Germany. RTL Television was once again the only channel in Germany with a double-digit audience share in the target group. The net TV advertising market is estimated to have increased by approximately 0.5%-1.5% over the first six months of the year, with Mediengruppe performing in line with this. Accordingly, overall revenue rose 0.8% to EUR 1,070 million, while EBITDA rose with a similar percentage to EUR 366 million. This results in a very healthy EBITDA margin of 34.2%. We'll move on to slide number 15.
Despite the weaker all-day audience share, our German family of channels continues to hold a very significant lead in the time slots of access prime time and prime time. As an example, the audience favorite soap, "Gute Zeiten, schlechte Zeiten," was the most watched program of the day. Among the demographics 14 to 59 years old during a period of time of 32 days. These two time slots are very important, as between 50% to 60% to 65% of the group's advertising revenues is generated across these hours. We'll move on to 16. TVNOW. TVNOW, Mediengruppe's video-on-demand service, is showing strong growth across KPIs such as the number of paid subscribers and video views. This growth is expected to continue as we start investing in more original productions, regardless of their genre, that can first be viewed on TVNOW.
This expanded content offer will include both pure online content, which we acquire in the German and international licensing markets, and original productions specifically made for TVNOW, which will boost the image and appeal of our service. While we are open to partnerships with other market participants, there's no rush to do so. We are in a strong position given our high share of own production, so we can take time to properly evaluate possible partnership options. Moving on to slide 17. As you are aware, Groupe M6 reported its results at the end of July. In an advertising market estimated to be up 1.9%, Groupe M6's advertising revenue grew by 0.9%. Overall revenue was almost stable at the level of EUR 739 million, with EBITDA coming in at EUR 182 million.
The group's revenue was negatively impacted by lower production and audiovisual rights revenue, while EBITDA was boosted by the distribution agreements signed at the beginning of this year. Audience share reached 21.1% for the family as a whole. I move on to slide number 18, the Netherlands. The combined audience share was down at 27.7%, mainly as a result of this year's sports events being broadcasted on the public channels. The advertising market in the Netherlands remains tough. However, after two years of decline, we have seen the TV advertising market increase by an estimated 3% so far. RTL Nederland ad revenue grew in line with the market, with the overall revenues rising to a level of 5.7% to EUR 241 million. Thanks to a strong development at Videoland, our local streaming video-on-demand service. EBITDA improving substantially to EUR 32 million. I move on to Fremantle, slide number 19.
Revenues increased strongly by 5.2% to the level of EUR 672 million in the first six months of the year. As you can see in the revenue bridge, this is despite significant negative FX impacts, It's mostly thanks to strong organic growth amounting to EUR 66 million. This presents a 10.3% organic growth rate. It reflects the relaunch of American Idol and strong performances across the drama slate. EBITDA was stable at a level of EUR 42 million, resulting in an EBITDA margin of 6.3%. All in all, the number of broadcast hours of Fremantle content was 6,202, up 7% year-over-year. Fremantle continued its push into drama with the number of hours growing almost 15% to 739 hours, while entertainment grew 7%, also thanks to the relaunch of American Idol. Moving on to slide number 20.
American Idol, television's most successful and recognized music competition show, returns in March 2018 to the U.S. screens, this time on ABC. With an average total audience share of 8.6%, it performed over 40% higher than ABC primetime average. By the end of the season, American Idol had accumulated more than 1 billion video views across all social media platforms. The American Idol app had been downloaded by 1.2 million times. American Idol has been sold to more than 150 territories, with one of the most recent deals being Amazon Prime Video UK. On September 1st, Jennifer Mullin will take over the helm at Fremantle. She has been a key force in Fremantle's creative renewal across unscripted and scripted program, She has a matchless understanding of the global content industry.
We are very much looking forward to working with her to further drive the growth of our global content business. We move on to slide number 22. In our rapidly changing Total Video industry, growth mainly comes from nonlinear or streaming services. We will increase investments in our video-on-demand services with a clear focus on local exclusive content. As I said before, this focus is the power engine for all of our Total Video offers. With Fremantle's push into scripted drama, we will continue to fuel our content pipeline. Looking at these two main areas in more detail, we will start looking at this at slide number 23 with our video-on-demand plans. On this slide, I would like to reiterate our plans for what we call our hybrid video-on-demand offer. This model combines a free advertising finance service with a premium paid product.
The premium service will offer the consumer more exclusive content in HD quality and with a lower ad load. First examples of our building strong local streaming champions are the upcoming massive expansion of TVNOW in Germany and our existing platform in the Netherlands, Videoland. This approach will require more investments in local digital-first content, more enhanced direct-to-consumer business models, and the shared use of our common technology platforms, as has been the case with the use of our [6play] technology and the rollout in the markets like Belgium, Croatia, and Hungary. Slide number 24. On this slide, you can see concretely what we have achieved so far in terms of the group's direct-to-consumer offers. We now have, or will shortly, significant video offers in each of our largest broadcast markets: Germany, France, and the Netherlands.
Subscribers, video views, and viewing time are all showing dynamic growth rates. This bodes well for the future as we continue to invest in these platforms and continue to invest in the content offers. Accordingly, we expect further growth over the years to come. Slide 25. As you are aware, it takes time to build a solid drama portfolio. Progress has been made. We believe you need a global presence, strong production credibility, and access to excellent talent on screen and off screen in order to be successful in this area. If we look at the shows that we launched in 2018, all these elements can be identified. All the dramas mentioned were produced in different countries, Australia, Italy, Denmark, Germany, and all of them were made with very high production standards in collaboration with very prestigious partners like Netflix, Amazon, and HBO.
There's more to come if you look at the slate for 2019. Currently, Fremantle is seeking funding for at least 35 scripted ideas. Consequently, the international drama productions are expected to generate more than 20% of Fremantle's consolidated revenue in 2019. Moving on to 26. We are in the business on a daily basis of maximizing and monetizing the consumer's attention to our broad variety of video offers across all devices. This is what we mean by Total Video. To achieve this, we are going back to our roots to re-enhance the pioneering spirit within the group, from a holding company to a proactive, dynamic company that takes risks and invests. We will become more consumer-centric while driving further collaboration and synergies across all parts of our business.
We must not change what has made the group so successful, and that's what I mean by the DNA of the group. This DNA has enabled us to consistently take a long-term view to everything what we do and has allowed us to take risks and to experiment while not threatening the financial stability of the business. We are ready to invest and to take calculated risks in order to shape the next chapter of RTL Group's success of a long, profitable storyline. This will include a strong focus on fostering organic growth initiatives. I move on to slide number 27 on the outlook. The strong set of financial results in the first half of 2018 demonstrates the importance of the group's Total Video strategy. Despite challenging market conditions, RTL Group continued to grow its top line and at the same time generate a very healthy EBITDA margin.
The group remains highly cash generative. We are paying an interim dividend once again. In terms of guidance, we reconfirm the outlook given in March and most recently on May 17. Accordingly, we continue to expect moderate revenue growth for the full year and an EBITDA on a normalized basis that is expected to be broadly in line year-on-year. This concludes the formal session of the call. Needless to say, we're open to answer the questions you may have. Thank you.
Thank you. Ladies and gentlemen, if you would like to ask a question, please signal by pressing star one on your telephone keypad. If you're using a speakerphone, please make sure your mute function is turned off to allow your signals to reach our equipment. Again, press the star one to ask a question. Our first question today comes from Christopher Johnen of HSBC.
Yes. Good morning, guys. Thanks for taking the question. I would like to take them one by one, if you don't mind. First, coming back to the idea of a German Hulu, you say that there is no rush to do anything, and that you can take time to evaluate your options. Why is Germany that much different than France in your view? Because with Salto, I think you see the benefits of a combined offer there. I'm just curious, how you're thinking about the difference of a German Hulu versus the French offering? That'll be my first question.
Okay. I think to reiterate, we're very open to exploring partnership options, as you have seen in the French market, definitely also for the German market. Partnership options should be based on embracing the right strategy on what we believe to be the right streaming service, combined with the right business model and the right business terms. I think as we all know, this is quite complex to achieve. That is the reason why we have not advanced in the German market yet.
Okay. Understood. A second question coming to Holland. I'm not sure how surprised you were by the uptick in advertising. I think a lot of people were, especially after the performance in the last couple of years. What has changed in the market in your view? If we're looking one year back, I think we've seen quite a negative downward spiral on prices, a sort of a race to the bottom on pricing. Has the market improved in terms of rationality? Is this World Cup related? What's changed in the Netherlands in your view?
I think it's a combination of a lot of elements. We see that there is better visibility on new clients joining the TV segment, especially in the e-commerce segment, where we see strong new clients stepping into TV and combining that with digital exposure. We have been able to increase prices in the first half of the year. FMCG has also turned back to TV, where in the previous year, they have taken away some of their commitments in the Dutch landscape.
That sounds like something that will or should continue in the second half, if I'm getting you right.
Needless to say, visibility is limited. At least the initial trend in the third quarter shows a continuation of that pattern that we've seen in the first six months of the year.
Okay, that's clear. My last question on online video in Germany. You may have seen that your biggest peer there seems to have a bit of an issue with significant declines on the AVOD side of their business. Could you discuss a bit how you guys have performed in Q2 and the first half, what you are seeing there? I would guess that looking at some of the market data, you should be up, but I'm not sure whether it's low double-digit or less. I think a lot of people, especially when looking at performances of some of your other peers, international peers, would maybe expect a little bit stronger growth than that. Maybe you could spend a couple minutes talking about what you see in online video in Germany. That'd be interesting. Thanks.
Yeah. I think we've successfully continued to develop our video-on-demand service, and the online video advertising proposals in the market, both through our offers of Mediengruppe, but also through SpotX and Smartclip. We've experienced growth in this domain, and we're confident, also in the second half, to continue building these services and the offers with the advertisers going forward.
Outside of the multi-platform business, so just the sort of classic online video for catch up services, et cetera, how are you seeing growth there?
In in-stream advertising, we've continued to see growth in the first six months of the year, and we're continuing to be confident in that domain to continue to grow.
Chris, that growth is despite the fact that we've had a negative, so to say, scope change, where we had one business which we basically pulled out of or merged with another activity. In terms of like for like, we've got a negative sort of headwind. Despite that, we're still up on the first six months.
Sorry, do you mean Smartclip moving segment out of
No. It's Netflix which has gone to another business.
Oh, okay.
Venture.
Okay. Thank you. Thanks, guys.
We will now take a question from Julien Roch of Barclays. Please go ahead.
Yes, good morning. Continuing on the German Hulu, you said that you were hoping to partnership, but you have to get the right strategy, right business model, and right business terms, quite complex to achieve. Could we have some idea of the timing? Are you actually talking to other market participants currently, and when will you make a decision broadly of joining forces or going alone? Are we talking a couple of months before year-end or next year? That's my first question. My second question is, could we get advertising trends in Q3 for Germany, France, Netherlands, Belgium, and Spain? Final question is, can we have an update on BroadbandTV? Thank you.
Okay. Let me take the first one on the German Hulu question. I think what we are preparing for a relaunch and scale up of the business of TVNOW in Q1 2019. We'll continue to invest and prepare for building and scaling up our own streaming video-on-demand offers. We will not allow any kind of future talks to delay any of our own organic growth plans that we will have. Again, I restated my openness to exploring future partnerships. We, as you know, it is very complex. Also with regard to timing, this is a very difficult question to answer. Maybe on the ad trends.
Yeah, Julien, we expected the beginning of the third quarter to be rather difficult given the fact that the World Cup was basically spreading into July. That is also what we have seen. Overall, as you know, July and August are rather small months. For us, when we think about the online profitability, September to November is far more important. We will basically disclose our 30th of September results on the 8th of November. By then, we will have a very good visibility for the full year. We just reiterated our outlook. There you can basically read that we continue to believe that there are no reasons why the advertising should all of a sudden turn sour. It is unfortunately true that we have very limited visibility, and we only would like to guide if we see where we're heading to.
It's a bit early, but overall, no concerns about second half, but too early to say.
BroadbandTV. Maybe on BroadbandTV, we can actually be quite quick because we're very happy with the performance of the business, and they have experienced strong growth in the first 6 months of the year. They're acting in line with budget and our expectations. On the strategic front, there is no news versus the previous calls.
Is there no deadline? Because I thought there was a limit to the window for the put and the calls, or can you extend discussion forever?
Not forever, Julien, but we still have time, and our focus is to make sure that we find the best strategic option for the company. By the way, both shareholders, i.e. RTL Group and the minorities. We want to be sure that we have exhausted all options and avenues before making such a decision. We do not want to be rushed into anything. Yes, it takes more time, but it's time well invested.
Just on final, you said not forever. Is there a deadline? Do you have to make a decision by a certain date? If yes, what is that date?
We don't need to make any decision in the near future. Obviously when we moved into broadband back in 2013, we have discussed optionality. There are deadlines, but it's less for us, more for the minorities.
Thank you.
Ladies and gentlemen, as a reminder, to ask the question, please press star one on your telephone keypad. We will now take a question from Adrien de Saint Hilaire of Bank of America.
Yes, good morning, everyone. I've got three questions on my end. First of all, in the U.S. we've seen broadcasters getting together, building consolidation in an attempt to fend off Netflix and Amazon. Would you imagine that the same thing could happen in Europe in the second half of 2018 or perhaps 2019? Pan-European consolidation, that's the first question. The second question is, again, given the developments in the markets, do you feel that regulators in your main markets are getting more sympathetic to the idea of broadcasters in general and to their fate? Lastly, Bert, I think you mentioned in your prepared remarks that international drama revenues should be more than 20% of revenues in 2019. Does that give you confidence and visibility that Fremantle can grow organically, perhaps by another 4%-7% in 2019 as you're guiding to in 2018?
Maybe on your first question on the U.S. consolidation of broadcasters. On that side, we basically see an increased consolidation in the U.S. market, which might actually also have an impact in the European setting. Although I expect the consolidation in the European setting to be more difficult as the synergies will be more limited than in compared to the U.S. market. There might be some cooperations, but the consolidation wave as currently seen in the U.S., I would find it difficult to see similar trends and to a similar level in the European landscape. Secondly, on the regulators, bear in mind that we are really very forceful in talking to the regulators that they need to redefine their current market definitions going forward in order to open up for media companies in the European landscape to be open for more partnerships and consolidation options going forward.
I think we are not there yet, but I think we will have a continuous dialogue with the local and European regulators in order to prepare the ground for that, as this, I think, is a very important long-term strategic priority that we need to realize. To get back on your third question on Fremantle and the expected organic growth. I would feel comfortable on an organic growth trajectory of the 4%-6% mentioned, subject obviously to foreign exchange impacts. If you carve that out, 4%-6% growth could be a realistic target if you look at the current lineup of our scripted efforts.
Thank you, Bert. Just to be clear, I was referring to 2019. 4%-6% for 2019.
Exactly.
Yeah. Okay. Very good. Thank you so much.
We will now take a question from Laurie Davison of Deutsche Bank. Please go ahead.
Hi, guys. First question, just on the profitability of Videoland and TVNOW. Can you just give us some idea of the level of investment there in terms of operating losses and when you'd hope to see any profit coming out of that hybrid video strategy? Second question is just on the investments there and whether that rules out exceptional dividends, at least for the next one to two years, assuming we don't see any marked advertising growth from here. The balance between investment and exceptional dividends would be interesting to hear. Lastly, third question. We're seeing CPM rises on the back of these linear viewing declines. The message from Holland seems reasonably encouraging in terms of your ability to put through prices.
Elsewhere, I'm conscious that France and Spain and the U.K., it's becoming increasingly hard to put through, or messaging has been it's been increasingly hard to put through further price rises on linear. Can you just give us your views on how much further linear CPM price rises can go? Thanks.
Thank you for the questions. Let me take the first one. We are substantially increasing our investments in the VOD space. We will scale up that business significantly in the years to come, also increasingly by investing into local exclusive content. Right now for us, we would not like to disclose any details on that, we have internal discussions that as of 2020 or in the second half of 2019, we should have more visibility on reporting the details of that. The impact of the scale up and investments for 2018 will be limited. Also in the second half, while scaling up the activity significantly, the P&L impact will be limited. Maybe Elmar on the dividend and investment side.
Yes. I think there's one important assumption that we need to basically take for granted. As long as our business activities will continue to operate in robust market environment, as long as we can continue to enjoy the strong profitability of our core business, I don't see a direct link between the investments that we intend to do and the dividend policy. There should be no or a very minor impact on the dividend going forward, obviously the necessity is that we continue to operate in a strong macroeconomic environment comparable to the one that we have seen in the recent past.
Yeah, to pick up on the CPM development, with the reference made to the Dutch landscape specifically. I think the ability on our side to raise prices in the Dutch markets reiterates in itself the power of TV, even for a lot of new clients, that using TV in order to scale up and grow their business is really a crucial and key market tool to grow the business going forward. What you will see in some of the European markets is that the sell-out ratio of our inventory is actually increasing. The scarcity of the TV CPM or GRP inventory is increasing. As a consequence, we've been pushing our prices significantly in the Dutch landscape, which is a trend that we've seen in the U.S. market for many, many years to come.
Obviously the big word is still out there where we can apply that same model to some other European markets. It's definitely part of our pricing policy going forward to get premium pricing for our premium long-term content.
Just on the exceptional dividend, prospects for this year, given that you're talking about revenue growth and EBITDA growth, will an exceptional dividend be considered this year? Just following up on those CPM developments, sure the progress so far has been quite good in terms of raising price in Europe and in Holland. Obviously we're starting to see that tail off in markets like Sweden, France, Spain, and U.K. Is there any feeling for you or have you done any work on exactly how far you can push CPMs? Linear CPMs, that is.
Well, I think there's no general guidance to be given. It's very market specific and very demand specific driven. As I stated, we are very much aware of the premium product that we offer to our advertising clients, and increasingly, even media agencies see the value of TV in combination with digital exposure. This premium pricing is something we will continue to capture and nurture in all the offers that we bring forward. I would find it difficult to give a general statement for a lot of 10 European markets, because the developments are so specific that it's very difficult to have a general direction and response to that question.
Just on the extraordinary dividend, Laurie, that you were referring to, I think that our dividend policy is very clear. The ordinary dividend is always between 50% and 75% of the adjusted net result. There's a second target that we pursue, and that is to make sure that we continue to operate at a gearing of 0.5 to one times net debt to EBITDA. Now, we will continue to explore all means to grow the company organically, at the same time, we always have an open eye for accretive M&A. Our ability to potentially pay a special dividend amongst others will also depend to what extent we use money to further acquire assets for the growth of our portfolio. It's a bit too early, therefore, to give you a final solution, and here we continue to discuss it with the board.
It is very clear that once we will have cash that we will not be able to invest, we'll do what we did in prior years, i.e., we return it to the shareholders.
Understood. All right. Thank you.
As a reminder, to ask a question, please press star one. We will now take a question from Conor O'Shea of Kepler Cheuvreux. Please go ahead.
Yeah, good morning. A few questions from my side as well. First question, just on the digital growth acceleration. You mentioned in the press release that part of the growth related to the first time consolidation of United Screens. I wonder if you could call out the amount revenue impact of that. Also, I think you commented on improvement in terms of growth at SpotX.
Yeah.
Wondering if you could comment on StyleHaul actually hit double-digit in Q1, if trends have improved there at all. Secondly, in terms of the guidance, your guidance of around flat EBITDA on a group basis versus growth of around 2% in the first half. I just wonder if you could clarify whether there were any one-offs in the first half that might have boosted EBITDA, and equally if there were any one-offs boosting EBITDA in the second half of last year. If you could just remind us of that. Then the last question, just in terms of advertising spend. I understand your comments on limited visibility as usual, which is fine. I'm just wondering if you've seen any change in trend in spend from the auto sector in any of your major markets.
Obviously, we've seen a number of profit warnings from some of the major manufacturers, mainly U.S. players, but with global exposure. If you could comment on that would be helpful. Thank you.
Conor, very briefly on the digital revenue growth. We communicated a growth of 9% on a reported basis to EUR 424 million for the first half. Digital revenue now represents around 14% of total revenue. I can tell you if we had not had the headwinds coming from FOREX, we would have been able to report a double-digit growth rate for the digital revenue for the first half. The scope change that was basically provoked by the first time consolidation of United Screens was not very significant. This is not a big business.
As we already described earlier, it is a high single-digit figure that we've been able to add to the digital revenue line in the first half.
There are currently no further questions.
Sorry. Just had a quick question.
Oh, my apologies.
The second question, Conor, was any one-off in EBITDA, yeah?
Yes.
No.
Neither for the first half of this year or the second half of last year?
Second half of last year.
Well, obviously the sale of the building in Paris.
Yes.
That occurred in the fourth quarter. Other than this, in the first half, there was nothing.
First half 2018, nothing. First half of 2017, there was also the reimbursement of some tax in Hungary.
Conor was asking for the second half.
Yeah.
It was just the building.
Just the building. Okay. Can you remind us of the amount that was in Q4 last year?
EUR 94 million.
Okay, perfect. On the auto sector, in terms of any changing patterns of ad spend there?
Not that we are aware of based on our current talks with agencies and advertisers. No new insights.
Okay, great. Just a very final thing. On StyleHaul, any change in terms of the revenue pattern there in the second quarter? Any improvement or not?
Absolutely. It was a definite improvement. If we look at it on a EUR basis, even with the FX headwinds, they were basically down just 1% or 2% in the second quarter, which is a significant improvement over Q1, obviously.
Absolutely. Okay. Many thanks, guys.
We will now take a question from Adam Berlin of UBS. Please go ahead.
Good morning, everyone. I understand that there was no profit contribution from the first season of "American Idol" on ABC, and you announced today that you've renewed it for the second season. Will we start to see a positive profit contribution from "American Idol" going forward now that the first season's been somewhat of a success?
Yeah, Adam, we can confirm that because what was important for us is not only to get it back on air for a single season, but to make sure that it finds its audience. It did well on ABC. I think that the broadcaster was extremely pleased with the result and thus extended the format into the next season. Like you know, in prior exercises, there's always an additional degree of profitability available once that you've been recommissioned. Yes, we expect this format to increase in its profitability in the second season on ABC.
Thank you very much.
Ladies and gentlemen, as a reminder, to ask a question, please press star one on your telephone keypad. We will now take a follow-up question from Julien Roch of Barclays. Please go ahead.
Yes. Hi there. A quick follow-up. Could we get the subscriber numbers at TVNOW and Videoland? You gave us growth rates, but we don't know what the base is.
Yeah. So far, we've decided not to disclose that to the markets. We will stick to the growth rates we have reported. We're internally discussing what would be the appropriate timing to disclose these with the market and start following this and sharing this with you more closely.
Okay. Fair enough. Thank you.
We currently have no more questions in the queue.
Given that there are no more questions, I would like to say thank you very much, everyone, for having joined the call today. Obviously, if you have any more questions, you can contact me today, tomorrow, over the rest of the week, whenever. Obviously, as a management team, we look forward to speaking in conferences over the next few months, but also around the Q3 results, which will be in early November. Thanks once again. Have a good day, and thank you to our speakers, Bert and Elmar.
This concludes today's conference call. Thank you for your participation. You may now disconnect.