Good morning, ladies and gentlemen, welcome to the RTL Group analyst conference call. My name is Indy, I will be your coordinator for today's conference. For the duration of the call, you will be on listen only. However, at the end, you will have the opportunity to ask questions. If at any time you need assistance, please press star zero on your telephone keypad and you'll be connected to an operator. I'm now handing you over to Andrew Buckhurst to begin today's conference. Thank you.
Good morning, everyone. Thank you for joining this conference call for our results for the first half of 2015. On page two, you will find the agenda. First, the highlights, a quick review of the financials, followed by a review of our main business segments and an update on our outlook. I'd like now to introduce our speakers for today, our Co-CEOs, Anke Schäferkordt and Guillaume de Posch, and the Group CFO, Elmar Heggen. I will now hand over to Anke, who will begin today's presentation on slide three.
Thank you, Andrew, good morning from me as well. Overall, we've had a good first half year with strong financial results. While advertising markets continue to show a mixed development, we have had strong growth from our German TV operations and outstanding growth from our digital activities. As a result, group revenue has increased by almost 4% to nearly EUR 2.8 billion, with EBITDA up more than 3% to EUR 534 million. The group's EBITDA grew 2.6% to EUR 628 million. The reported net profit for RTL Group shareholders rose by almost 74% to EUR 351 million, mainly due to the effects of the impairments made last year. Given the group's solid financial position, the board has decided to make an extraordinary interim dividend payment of one euro per share on the 10th of September. Moving on to the next slide. To summarize, there are three main highlights to these interim results.
The extraordinary digital revenue growth, up 94% year-on-year. This has been driven by excellent organic growth of 33% year-on-year, also the full consolidation of SpotXchange and StyleHaul, which were acquired in the second half of last year. The almost 10% EBITDA growth from Mediengruppe RTL Deutschland, our largest profit center, and the fact that RTL Group has become the number one on YouTube globally. On the next page, slide five, the dynamic growth we have seen in our digital revenue is broken out in a bit more detail. As these charts show, our digital revenue has grown very strongly over the last few years and has now become one of the drivers of the group's overall top-line growth. Digital revenue now represents 8% of RTL Group's total revenue, double what it was the year before.
This growth is a reflection of the early investments the group made in the online video world, both in the aggregation and monetization platforms. Organically, the pro forma growth rates for our MCN businesses and our monetization platform, as shown on the right-hand side, are 80%+. Accordingly, we expect significant growth in digital revenue for the full year. On the next page, we can see what this means in terms of online video views. This chart gives an even clearer indication that we have become a global leader in online video. Looking at our digital assets using the Comscore Metrix, RTL Group is now the number one on YouTube worldwide, with leading positions in the U.S., Europe, and in Germany. This makes us the most international and the strongest online video operator out of all broadcast groups, whether they are based in the U.S. or Europe.
I will now hand over to Elmar.
Thank you, Anke, and good morning to everybody. Turning now to the financial review on slide number eight. Firstly, just a quick review of quarter two before moving on to the half year results. Revenue in our second quarter was up 7.7% at EUR 1.48 billion. This was driven by an almost 7% growth in Germany, 6% in Belgium, and a 10% growth at Fremantle, as the negative phasing we mentioned around Q1 results unwound. Fremantle also benefited from a significant foreign exchange translation gain, as was the case in the first quarter. Our digital activities, which are recorded in the other segment, grew very fast. The segment showed revenue growth of 48% in the quarter, up on Q1's growth rate of almost 43%. The group's EBITDA development was also strong, up 4%, resulting in a margin of 23%. Moving now on to the next slide nine.
Reported group revenue for the first half year was up 3.8% to EUR 2.788 billion. Underlying revenue, which is at constant scope and exchange rates, grew by 1.2%. Group operating expenses rose by 4% compared to a year ago. This increase partly reflects the investments in new businesses but also increased investments in programming. This results in a reported EBITDA of EUR 534 million and a stable margin of 19.2%. Our EBITDA increased to EUR 628 million, resulting in a 22.5% EBITDA margin. Our EBITDA, the Group's net financial debt at the end of June was just over EUR 1 billion, pretty much in the middle of the Group's target to have a net debt to EBITDA of 0.5 to one times. Moving to the next slide. The net profit attributable to RTL Group shareholders for the period was up significantly at EUR 351 million compared to EUR 202 million last year.
This reflects the higher level of EBITDA, slightly lower interest charges, and as expected, a large swing in terms of impairments. I am sure you remember that in 2014, we had a charge amounting to EUR 88 million, EUR 77 million of which were recorded against our Hungarian operations. In 2015, we have no such costs. We have also reversed part of the impairments made in 2014 in Hungary against intangible assets and stock. In total, this resulted in EUR 10 million being credited to the income statement. Finally, the tax charge came in lower, primarily due to higher commission income on the tax pooling agreement in Germany. This income amounted to EUR 28 million from EUR 21 million last year, following the new ruling with the local tax authorities.
The Group's net result translates into a very strong earnings per share of EUR 2.28 per share, up in line with our net result, i.e., 73% on last year. Let us now move on to cash flow, slide number 11. Our cash conversion ratios remain high at 74% of EBITDA, but below last year. The main reason for this are a slight worsening in days sales outstanding, especially in the Benelux region, lower cash generation at FremantleMedia, reflecting the changing program mix, higher prepayments at Groupe M6, and slightly higher startup losses, notably in our digital businesses. Management expects the cash conversion to improve throughout the remainder of the year, but we will probably not reach the accustomed 100% level. For the full year of 2015, we expect cash conversion to come in at around 90%. I will now hand you back to Anke, who will start the business review.
Thanks, Elmar. Starting on slide 13 with Mediengruppe RTL Deutschland. This has been a very strong first half year for the business with another set of record results. Our family of channels remains the clear market leader with a lead of 2.3 percentage points over ProSiebenSat.1. In a good advertising environment, revenue and EBITDA both grew substantially by 7% and almost 10% respectively, leading to a record EBITDA margin of 34.5% at the half year. Moving on to slide 14. Overall, we had a satisfactory first half in Germany with regards to audiences. We have a clear leadership position with our main channel as we reported an audience share of 12.5% and remain the only channel with a double-digit audience share. We continue to experience some weaknesses in our daytime schedule on RTL Television, but this is being addressed, and we are confident that we are on the right track.
Within the next few weeks, we will launch several new formats, which based on audience test results, we believe will bring in well above average audience share. In terms of the access prime time and prime time slots, which is where our main channels earn approximately 65% of its revenue, we maintain a structurally very sound lead. For the first six months of 2015, RTL Television's audience share was 12.8% in access prime time, 3.8 points ahead of its nearest commercial competitor. Prime time came in at 13.5%, a 4.8 percentage point lead. The family of channels as a whole grew audience share in both of these important time slots when compared to last year. Our second-tier channel VOX reported a stable share of 6.6%, while RTL Nitro continues to report strong growth with an audience share of 1.8%, up 0.3 percentage points on last year.
In terms of financials on Slide 15, overall revenue was up strongly, outperforming an advertising market estimated to be up between 3% and 4%. EBITDA improved to EUR 343 million, a new record half year result with a margin also up at 34.5%. I will now hand over to Guillaume for the remainder of the business review.
Thank you, Anke, and hello, everyone from my side. Turning now to Groupe M6 in France on Slide 16. As you know, Groupe M6 reported their results at the end of July. Performance was solid, helped by a recovering French TV advertising market. Total advertising revenue was up 1.3% with EBITDA in the TV segment up 0.7 percentage points. Audience shares were good for the family as a whole, with robust growth from 6ter
Channel compensating for a slight decrease at the main channel. Moving on to the next page, Slide 17. M6 delivered an audience share of 14.9% in the key commercial target group. Long-running series such as "Farmer Wants a Wife," "Top Chef," along with new launches such as "The Island," helped ensure that M6 remains the second largest channel in its main target group. W9, in turn, attracted an audience share of 3.7%, flat on the same period last year. It also now holds the record of the highest ever absolute audience for a DTT channel, with 4.1 million viewers having watched the FIFA Women's World Cup match between France and Germany. 6ter grew 0.6 percentage points to 1.9%, firmly establishing itself as the leader among the new DTT channels launched two and a half years ago.
Overall, as I say, the family of free-to-air channels reported a stable audience share of 20.5%, while the market year lost share. We now move to the next slide. The French advertising market is in a state of fragile recovery. We estimate the market was slightly up by some 2% over the first half of 2015, with M6 advertising revenues across its free-to-air channels up 0.8%. As M6 mentioned on their call on H1, there is a degree of optimism in the marketplace with both volumes and pricing showing signs of a recovery for the year. Overall revenue was down, mainly due from an RTL Group perspective, to the sale and deconsolidation of Mistergooddeal, which happened at the end of quarter one last year. Excluding this effect, revenue would have declined by just 0.8% year-on-year.
Due to the weak results from the diversification business of M6, EBITDA decreased slightly to EUR 105 million to EUR 111 million last year, while the margin remained flat year-on-year. We now turn to the Netherlands. Our audience share leadership remains very strong, with a growing lead over our commercial rival of 12.3 percentage points. Revenue grew slightly, thanks to the non-advertising business, in particular retrans fees. The digital activities revenues were enhanced during the period following the step-up to full ownership of the VOD platform Videoland, and the acquisition of the online restaurant guide Dinnersite, which strengthens our table reservation portal, Couverts. Moving on to the next slide 20. The combined audience share was 32.7%, ahead of both the public broadcasters and the SBS Broadcasting Group. Year-on-year, this represents a progression of 0.9 percentage points.
In terms of financials, as seen on the next slide, revenue was flat year-on-year in an advertising market estimated to be down 5%. Lower advertising sales were compensated by higher diversification revenue across all business lines, including SVOD, ventures, and distribution. EBITDA was down at EUR 27 million as a result of the lower margin on our diversification businesses and start-up cost in digital. This results in an EBITDA margin of 11.9% for the first semester. As we had hoped, we have seen an improvement in the advertising market from June onwards, which gives us some optimism that the market will recover after decline experienced at the beginning of the year. We now turn briefly to the other broadcast markets on slide 22. In Belgium, the combined audience share was 35.9%, up 0.7 percentage points on last year's, and some 17.1 percentage points ahead of the public broadcaster.
Revenue has slightly increased to EUR 104 million, with EBITDA stable at EUR 26 million. In a net radio advertising market estimated to be down 2.4%, our radio business in France reported revenue of EUR 78 million in line with the market decline. EBITDA was stable at EUR 7 million. In Hungary, the advertising market was slightly down by an estimated 1.4%. Thanks to a good performance from our cable channels, total revenue rose 2.2% to EUR 47 million. Following the reduction in the advertising sales tax, which has been applied retroactively, the group has been able to reverse part of the impairment made against program stock last year. This had a positive effect on the EBITDA of EUR 3 million. In total, EBITDA amounted to EUR 16 million. In Croatia, revenue was stable in a TV advertising market that is also flat year-on-year. A break-even position had been maintained.
Finally, a few words on Spain. Atresmedia reported its results last month. The Spanish TV advertising market continues to recover, with the market up 9.9% during the first six months of the year. Atresmedia outperformed the market, growing its total revenue by 12.2% to EUR 506 million. The group EBITDA rose strongly by 55% to EUR 93 million. RTL Group recorded its contribution to its EBITDA of EUR 11 million, up from the EUR 7 million last year. On slide 23, we have provided detail on the retransmission fees across the group. These continue to develop positively, reaching EUR 118 million at June. This represents a growth of 18%, driven mainly by new contracts in the Netherlands and the continued subscriber growth in the HD+ model in Germany. We now turn on to Fremantle on slide 24. With more format development, more drama, and more digital, Fremantle is preparing its future.
New shows are being created and launched, while of course, some of the older shows such as "American Idol" in the U.S. are coming to an end. Let's not forget that "Idol" is still by far the number one entertainment show of Fox, and has been recommissioned for an additional season in 2016. Following a strong Q2 where EBITDA was up 25% year-over-year, EBITDA came stable at EUR 28 million for the first six months as a whole. As part of the renewal process, both internal and external growth paths are being followed by Fremantle, and on the 7th of August, Fremantle completed the acquisition of an Italian production company called Wildside, more of which later. Revenue from FremantleMedia's digital activities grew 149%, led by our Canadian games company, Ludia, which launched "Jurassic World" at the beginning of the year.
In terms of the financials, on the next page, slide 25. Revenue slightly increased by 2.2% to EUR 637 million. Positive foreign exchange differences amounted to EUR 70 million as of June 30th. Scope changes, notably the effect of the disposal of Radical Media at the end of last year, resulted in turn, in a reduction in revenue by EUR 63 million. Net production volume phasing and new shows are overall positive, and given that this first half year includes lower "American Idol" revenue when compared to last year, this is overall a good result. In terms of current trading, the non-scripted business continues to perform very well with, in particular, a big success for "Family Feud," also to name "Britain's Got Talent" or "America's Got Talent" on NBC, which premiered to an audience of nearly 14 million viewers on NBC, making it, once again, the highest-rated summer entertainment shows in the U.S.
Looking ahead, in the U.K., FremantleMedia has just secured two daytime shows, a game show, and a quiz show for ITV. In kids and family entertainment, the big news has been around the relaunch of the classic format, "Danger Mouse," which premieres on CBBC in the U.K. this autumn and rolls out internationally on Netflix from next spring. On slide 26, there is more detail on Fremantle's push into scripted prime time entertainment. Wildside, a leading Italian production company, specializes in scripted drama television programming, as well as commercial feature films. Their pipeline includes "The Young Pope," which is Wildside's first international co-production with top-notch partners including HBO, Sky, Canal+. The series stars Jude Law and Diane Keaton with Oscar winner Paolo Sorrentino working as co-writer and director. All this is in the books.
Deutschland 83," which we talked about in March of last year, has had a very successful launch and international rollout. It became the first-ever German language drama to be aired to critical acclaim in its original language version in the U.S. It has been sold internationally across multiple territories. We have also solid hopes for a new drama called "American Gods," which has just been greenlit by the U.S. premium cable channel Starz. FremantleMedia will produce this show, which is currently planned to be 10 episodes in length and scheduled for a 2016 delivery. The drama has great potential across distribution, brand partnerships, licensing, and digital in our view. I will now hand back to Anke to take you through digital and the outlook.
Thank you, Guillaume. As you know, our digital strategy revolves very much around online video. Earlier this year, we announced the creation of the RTL Digital Hub in order to manage and provide support for further international expansion in the online video space. We started laying the foundations of this hub just two years ago with the acquisition of BroadbandTV. Further acquisitions of both SpotXchange and StyleHaul, and more recently, Clypd and YoBoHo, have only added to our digital presence. Across the group, we now generate more than 8 billion video views per month, including mobile. This means that at the end of June, our online video views reached almost 43 billion, up 171% compared to last year. On slide 28. As I mentioned at the beginning of this presentation, we are a global leader on YouTube.
With more than 45,000 channels and over 700 million subscribers, we are far ahead of other U.S. and European media companies. Our monetization platform, SpotXchange, has also had an excellent first half year, as can be seen on the next page, slide 29. With 100% growth in ad decisions and pro forma revenue growth of 90%, we are delighted with the way this profitable platform has developed. At the same time, we are also laying the foundation for further growth, having launched new offices in Belfast, Amsterdam, Hamburg, and Singapore. We have also made additional hires across engineering and sales, taking the total headcount to 235 people, up from 173 last year. The management team in Denver is especially excited about the growth in mobile.
As mobile video viewing increases, we have seen the associated ad spend growing at a stunning 800% on quarter two last year, as advertisers embrace the medium for big budget brand-building video campaigns. To summarize on slide 31. Overall, we've achieved a strong operating performance with record results from our biggest profit center in Germany. RTL Group has become a leader in online video. Our revenue from digital has doubled in just one year and now makes up 8% of group revenue, a significant impact in a short period of time. The group continues to be highly cash generative, and again, we are paying an extraordinary interim dividend. Our strategic priorities are clear, and we have the benefit of being able to implement this strategy from a strong operational and financial base.
In terms of guidance, we currently expect slight revenue growth for the full year. Please keep in mind that visibility still remains low. Reported EBITA is expected to be in line with last year, despite lower contributions from one-off gains. That concludes the formal section of the call. Thank you very much. We are now available to answer any questions you might have.
Ladies and gentlemen, if you would like to ask a question, please press star one on your telephone keypad. If you change your mind and wish to withdraw your question, please press star one again. You will be advised when to ask your question. We have a question coming through from the line of Christopher Johnen from HSBC. Please go ahead with your question, Christopher.
Yes. Good morning, guys. Thanks for taking my questions. First, on the current trading, maybe you can quickly discuss how you see, for example, Germany running into tougher comps in Q3, whether you've seen any changes in momentum. With respect to France, maybe a quick comment whether you are already seeing the price increase, if you were hoping or M6 were hoping to have. That'll be the first one. On the dividend, and I guess related also to M&A. Maybe you can share your thought process going to the EUR 1. Maybe a quick comment on how the M&A pipeline looks for the rest of the year, based on what you can see currently. A bit of a housekeeping question. Maybe you can give us a quick update on the earn-outs on the digital assets.
What sort of range should we be expecting given how they are doing at the moment? Maybe a quick comment on the cash pooling for the rest of the years. It seems that Bertelsmann found a bit more tax losses for you guys to pool. Thanks.
Yeah. I start with the outlook or with the trading update for July and August. What we see when we have a look at the European market, July was up based on the comps of last year. That was what we expected. August is slightly down in the market. Overall, we expect European markets to be slightly up in a combination of July and August. In regard to the German market, we approximately see the same picture. Of course, we are running against very high comps in last year, where Mediengruppe reported revenue up 7.8% in the third quarter. We expect the third quarter to be much lower than last year. Given the figures in July and August, to be approximately flat or slightly up.
As far as Holland is concerned, we see a positive Q3. It's a little bit too early to draw final conclusions, because we're still in the booking phase for September. We're definitely counting on positive slight growth for Q3. Therefore Q4 will be absolutely essential to basically come to final conclusions on the end market on a full year basis in the Netherlands. As far as France is concerned, to answer your question, yes. We see definitely improvement in pricing. We believe that Q3 will be up. Again, too early to say, but it's profiling nicely and we don't see any short-term issue in the booking dynamics in France.
On the dividend, I think it's important to look where we stood in terms of net debt at 30th of June. We were slightly above EUR 1 billion, EUR 3 million, to be very accurate. We are talking here about the extraordinary dividend, not the ordinary full-year dividend. Clearly, when you look at the target gearing, we always said that we'd like to be between 0.5 and 1 times in relation to EBITDA. Now at EUR 1 billion, EUR 3 million, we are already slightly in the upper part of that gearing range. We are about to crawl our way up to the higher part of it. Having now paid EUR 1 in September will even increase the net debt position further. I think that here, clearly, we'll continue to focus on paying ordinary dividends amounting to 50%-75% of the adjusted net result.
You might look at to the EUR 250 we paid ordinary dividend in prior years as a kind of floor dividend going forward. Obviously, whether we pay on top of that will depend to what extent we've been able to invest into our portfolio. As we said, we'd like to do so wherever we see the opportunity to build value for our shareholders. If we have excess cash available within the guidance of gearing given, obviously we will pay this extra to the shareholders as we did in the past.
On the pipeline in terms of size.
We are currently reviewing a number of options. You will remember that in 2014, we spent EUR 246 million on M&A. For the first half, we spent roughly EUR 45 million on M&A. We are looking into additional opportunities. It's too early to say. We never give a forecast. To a certain degree, this is also opportunity-driven because we have to see what targets will become available and whether they fit our strategy and whether we believe that they are financially viable. We can't really tell you what this is going to be, but obviously, we'll continue to focus on small to medium-sized acquisition targets. The big ones, you shouldn't expect to come.
I think, as we did in the past, a proxy of EUR 150 million-EUR 250 million in M&A as an average in the midterm future is a good value to take in order to model this at your end. Talking briefly about earn-outs. As you know that all our earn-outs are very much linked to the development of revenue, but also operational profitability. It's difficult now to put a final value on what this would mean. Yes, we expect a number of step-ups that will occur in the next years. We'll have to take the decisions when we come to it. This could potentially mean that this is going to increase the money that we need to spend for those step-ups by the tune of EUR 250 million-EUR 300 million over the years to come.
Depends on whether or not the businesses will continue to perform in line with expectations. This is too early to say. I'm talking about step-ups here, not only earn-outs. Just to make sure that this is not misunderstood. Tax pooling. Yes. In the first half, we have seen a higher commission income, EUR 28 million compared to EUR 21 million in previous years. Typically, what we've seen over the last years is that in the first half, the total amount that we have seen was representing around 40% of the total yearly commission income. That has been a proxy for the past.
Obviously, most of those tax losses have been consumed, still, I believe that going forward, without having clear visibility of what Bertelsmann will be able to deliver in terms of additional tax losses, I think that we should see additional positive impact also for the second half in that regard.
Perfect. That's clear. Thank you.
Our next question comes from the line of Lisa Yang from Goldman Sachs. Please go ahead with your question, Lisa.
Good morning. I have a few questions. Firstly, on Germany, you're right to say that comps get nine points tougher in the second half. Given that Q3 is slightly positive, is there a risk that Q4 could actually be negative? You're confident it could be in line with Q3, which is basically slightly positive. The second question is on Fremantle. Are you still comfortable with your guidance of EUR 100 million-EUR 105 million of profit for the year? Is it possible to have the FX impact as well that you expect? On Fremantle still, can we have an impact coming from the lower revenues and profit of "American Idol" this year and next? What level of impact we should expect in 2017 when "American Idol" will be decommissioned? The last one is on your guidance. You're raising it basically by EUR 40 million.
Just wondering what are the moving parts behind that whole process. Thank you.
Okay. Starting with the question relating to the German advertising market and our performance in the market. Of course, you're right. The comps in the fourth quarter are even tougher. You remember last year, we generated an increase in reported revenue of almost 10%, 9.7%. Yes, at the moment, of course, we have low visibility on the advertising market. At the moment, we expect for Mediengruppe the last quarter to be slightly negative.
As far as Fremantle is concerned, yes, we confirm our guidance. EUR 100 million is central point. EUR 105 would be, in my view, the max. Please bear in mind that if you look at first semester, our EBITDA was EUR 28 million, there is still a lot of ground to cover till year-end. At this stage, we confirm this guidance. As far as the FX impact is concerned, within the EBITDA, count on a couple of EUR million. It's not that massive a role. Obviously, we'll need to see how this U.S. pans out in the months to come. As far as Idol is concerned, you're right, revenues this year for "American Idol" will be lower simply because the number of episodes ordered have been reduced from 56 to 42 episodes, less episodes. There was also a negotiation, obviously, on the unit prices.
Going forward in 2016, we hope to compensate these lower, at least on the margin basis, lower EBITDA through other shows that Fremantle is launching. Going forward in 2017, it is really too early to say. Again, since the margins generated by Idol are now significantly lower than what they were three years ago, we are not still talking about a massive compensation amount, so we should be able to organically compensate that. On the guidance, I'll turn to Elmar.
Yeah. On the back of a very strong revenue delivery in the first half, we have now increased our guidance on revenue and set it for the full year. We expect it to be slightly up. EBITDA, there we said that we expect to be in line with prior year. You might wonder what happens to all the extra revenue. There are three reasons that I'd like to mention. The first one is that we don't expect to be in a position to benefit from a similar amount of positive one-offs that we've been able to see in 2014. For example, as we also disclosed in all the accounts and in the notes, we have been in a position to have one-off gains coming from the redevelopment of our Luxembourg site. This is not going to reoccur in the same order of magnitude in 2015.
I think also very important, obviously the Forex gains that we discussed earlier, EUR 70 million at the level of Fremantle, EUR 82 million, if you look at it for the entire RTL Group. That obviously also does not translate in a similar boost of profitability. One of the causing factors for an improvement in terms of revenue came from the digital business, and that is, as you know, not yet operating at a similar margin than our free-to-air broadcast business. Yes, we believe that we should make up for the one-offs that we've been seeing in 2014, even though they will be lower in terms of absolute amount 2015. A lot of additional revenue comes from Forex digital activities, and yet does not carry the same average margin than our free-to-air broadcast business.
That's great. Thank you very much.
The next question comes from the line of Adrien de Saint Hilaire . Adrien, please go ahead with your question.
Good morning, everyone. Thanks for taking the questions. A couple of them, please. First of all, on platform revenues and carriage fees. Going forward, how much drop-through should we expect from them? Far the margins in Germany have been pretty steady despite the rise in carriage fees. Do you intend going forward to keep those incremental revenues, or do you want to reinvest them into programming costs or elsewhere? The second question, maybe following up on previous ones. You've raised your outlook for stronger European advertising markets. I'm just wondering which markets specifically are actually performing stronger than you initially expected. Last question back to Anke, maybe. Are you concerned by your levels of audience in Germany? Do you feel that you need to raise maybe investments to offset for lower audiences? Thank you very much.
Okay. In regard to platform revenue, we expect further growth in the future. In the first half, revenue growth was mainly driven by the Netherlands and Germany. We will see further growth, although we expect in Germany that the rise of HD+ will probably slow a little bit down. As we have seen in the first half of this year, we added less subs than in the first half of last year. It will be a steady income in the future, and we will see further growth. In terms of reinvestments in programming, we have seen in the first half of the year that we invested more into programming, but I expect over the next time to be in single-digit growth rates, only in programming expenses growth.
Maybe on the ad markets very quickly, before Anke answers about the audiences. Basically on the ad markets, we have one positive and one negative to make it simple in our anticipation. The positive was really coming from France, where going into the year, we were anticipating a kind of negative growth. I think that overall market should pan up positively for 2015. As far as Holland is concerned, there it's just the negative of the positive. We were basically expecting a growth in the market and actually, I think the market might pan out at best flat. In essence, these are the two main variations.
Yeah. In regard to the audiences overall, it was a solid first half. I'm not totally happy with the results of RTL in terms of audience shares. As I pointed out, we still see the same weakness, especially in daytime, but we expect with a lineup of new shows to increase audience shares in daytime from the fall season on. There will also be a strong lineup of new shows, in fall with "Deutschland 83," "Starfighter." New entertainment formats and the comeback of our most successful shows, "Farmer Seeks a Wife" and "Got Talent." There's a strong lineup in fall, and this is why, of course, I'm not 100% happy with the first half of the year, but I look forward to the start of the season.
Overall, we have to take into consideration that the lead we have, especially in access prime time and prime time, is a strong lead in comparison to our competitors. This is why I'm quite confident, because we are the one to deliver mass audiences in access prime time and prime time far ahead of our competitors. It's a solid situation. I'm not 100% happy, but I'm confident in regard to our lineup in the next season.
Thank you.
Thank you. Our next question comes from the line of Julien Roch from Barclays. Please go ahead with your question, Julien.
Yes. Good morning. First question on advertising. You gave us your view on the trends in Q3 in Germany, the Netherlands, and France for the market. Coming back on France, can you give us some view on M6 market share in Q3? Do you expect them to continue to lose share like in the first half or maybe stable or improving? That's my first question. The second one is on your guidance. You said that EBITA would be flat because of lower exceptional and partly for that. When you say flat operating profit, you talking about operating profit including exceptional, so on a base of EUR 1,145, just to be 100% sure. The third question is on Fremantle.
Looking at or interpreting Guillaume's answer on Lisa question about the impact of American Idol, where you said in 2016 you would compensate with new programs and in 2017, it was too early, but with Idol having lower profitability, you could compensate as well. Are you saying that we should expect Fremantle to have flat operating profit for the next three years, i.e., around the EUR 100-EUR 105 level? That's my third question.
Okay. I'll take the first one, France. Too early to say is the answer. It's too early to say whether M6 will gain market share or not, simply because obviously we don't know how the other competitors are performing. I'd like to reserve my answer on this one. I'll take the Fremantle question before going to guidance. On Fremantle, just to reiterate, no, we anticipate growth in the EBITDA overall of Fremantle through organic, and let's not forget that we are doing also acquisitions. There will be a revenue impact, but obviously as I indicated for 2016 and 2017 onwards, there will be an EBITDA offset of the non-renewal of Idol. Again, I only repeat that most of the Idol negative effect is behind us.
We had this negative effect in particular last year and obviously this year. Afterwards, we're up on top of the hill, so to speak. On the guidance.
Julien, I can confirm that the reference point in our outlook statement is the reported EBITDA, i.e., the EUR 1,145,000,000 that we have shown for 2014.
Okay. Thank you.
We have the next question come through from the line of Conor O'Shea from Kepler Cheuvreux. Please go ahead with your question, Conor.
Yes, thank you. Good morning. A couple of questions from my side as well. First question on the German business. With revenue growing more strongly than expected in the first half of the year, but expected slight decline in Q4, where are we in terms of expectation on margins? If you can give us some indication of the phasing of program you spend in the second half of the year, if there's anything unusual in that respect. Second question on other revenues. Obviously, you're putting a lot of your digital M&A. Can we have a sense of overall what the operating leverage is for additional revenue growth, which obviously is spectacular on the digital side?
As a related question to that, in terms of the deal you've announced from Fremantle in TV production in Italy, what the impact could be in terms of reported revenues in the second half of the year or on a 12-month rolling basis? Then the final question, just in terms of Hungary, I think you mentioned EUR 3 million exceptional relating to the pullback of the ad sales tax retrospectively. Can you confirm what the underlying level of EBITDA is on Hungary for a 12-month basis for 2016, and also for the second half of this year? Thank you.
Okay. Starting with Germany and program extensions. We do not expect any extraordinary effect in the fourth quarter. The guidance we gave for the full year, that program expenses will be slightly up, is still valid. Overall, no extraordinary effects in the fourth quarter.
I'll take the Fremantle question, then the Hungarian questions. Fremantle Italy obviously will consolidate starting August. This year, EBITDA contribution will be just a few EUR million. Most of the revenue ramp-up of Wildside will happen next year with the delivery of The Young Pope, where we'll have a revenue step-up.
It will be quite important. On Hungary, you're right. There are framing of reversal of program impairments. On a full year basis for Hungary, we obviously expect to be above EUR 15 million on a full year basis, probably between EUR 15 million and EUR 20 million. Going forward, too early to say for 2017 run rate. Obviously, like in any other market, we hope to have growth.
Okay. In terms of the drop-down, in terms of additional digital revenue growth overall, what can you say on this?
Looking at digital revenue, this one developed extremely well in the first half of 2015. We are up 94% or EUR 106 million because revenue grew from EUR 113 million to EUR 219 million. You'll remember when we talk about digital revenue, this is always excluding e-commerce, home shopping, or platform revenue. It's pure online and digital revenue. Looking at this growth rate, it's important to make the differentiation between the scope entries.
scope adjustments, which account for roughly half of the growth in the first half, because we have been able to record the scope entry of, for example, SpotXchange, but also StyleHaul.
Okay.
The other half is basically down to organic growth. The businesses that we have in our portfolio, they continue to grow significantly. I think in order to model this, it's good to assume 50% of the growth is due to scope entries and the other 50% are due to organic matters.
Okay, great. Okay. Thank you.
Thank you. We have one more question from the line of Charles Bedouelle from Exane. Please go ahead with your question, Charles.
Good morning, all. Thanks for taking the question. Just a follow-up on Conor's question on digital. Actually, can you give us maybe a broader view of where you think the profitability of your digital portfolio could be in the coming years or even a range? I know it's difficult given how fast it's growing, but just to give us an idea. The second question, just to tidy up. What would be, in your view, the total one-off impacts you can have this year, so that just gives us a better tool to forecast your real, I would say, guidance for 2015. Thank you very much.
I'd like to start with the profitability question on digital businesses. I think if you take our digital portfolio on aggregate, this is already profitable business. What we don't do is we don't put a profitability figure on the revenue, simply because a lot would basically be very close to decisions on how to treat intercompany pricing, because a lot of those activities, like Catch Up TV, for example, those are integrated parts of our broadcasting business. It's an ambiguous figure, and we can make the profitability work almost in that direction. What we can say is, for example, that SpotXchange is profitable on a standalone basis. Also, we expected that, for example, the MCN businesses, there it would take more time, a number of years, until we will see a profitability impact.
It's a bit like the situation was in the middle and the end of the 1980s, when we basically started to build our presence in free-to-air broadcasters. We wanted to first establish the audience and then basically convert this into a profitable business model. We wouldn't mind this to happen in the near future, but I think here we are clearly in a situation in which everybody is trying to grab market share. It's still a kind of gold rush, and it will take a couple of years until we will be there. On aggregate, it is already profitable businesses. Profitability rise between loss-making activities because of the nature of startup process, like in the situation of MCNs, to high profitable businesses like in Catch Up TV. It's difficult to give you a reliable figure because most of it would be down to intercompany pricing.
Okay. Very clear. I understand the difficulty. Let's say just maybe to carve out the Catch Up TV and just think about your standalone, new digital activities. If you think in the next two, three, whatever years you want, giving a balance of MCN and some other platforms like
Yeah
SpotXchange. Do you think it's profitable overall? Do you think it's mildly profitable? Basically, when we look at your numbers in H1, it's more than 100% of the organic growth of the group. I think it's very interesting for us to see how those good performances can lead the profitability in the medium to long term.
I think what we should briefly discuss is what do we believe is the terminal profitability of those businesses. There I believe that they will be, eventually, here we're talking about four, five, six years down the road. I think that they will come close to the profitability that we see from our core broadcast activities, but they don't match with that figure we see. If you look, for example, at the profitability of our free-to-air broadcast business, this is north of 20%. I think even if you look at the situation in five years from now, I'd be surprised to see a similar amount of profitability coming from the MCN business. I think that here we'll be in a position to grow to double-digit, but I don't believe it will hit the profitability that we've been able to achieve with our free-to-air broadcast business.
Very useful. Thank you.
We still owe you an answer on the one-offs. If you look at the 2014 reported EBITDA, EUR 1,145 million. I think you should take roughly EUR 30 million as a positive one-off, which I included there. It's difficult now to give you a forecast. Obviously, we have benefited from the reversal of the impairments in the first half, and there's still a bit to come from our redevelopment project that we are entertaining here in Luxembourg, but I don't expect this to be EUR 30 million, but it's going to be less. How much? It's honestly too early to say. We're only half year, and there might be a bit of movements here and there throughout the course of the second half, but I would forecast it to be less than EUR 30 million.
Okay, thank you very much.
We have a follow-up question from the line of Christopher Jones from HSBC. Please go ahead with your question, Christopher.
Yeah. Thanks, guys, again. Just a follow-up on the digital side. Looking at how the growth is progressing there, maybe next year already, the MCNs and SpotX will contribute more than Belgium, for example. How do you think about splitting that out into a new segment? What needs to happen for you to consider that? Can you maybe elaborate a bit on your thought process on that? Thanks.
In terms of revenue, you might be right, but in terms of EBITDA, I don't see this. It's too early. It will take more time, because we just mentioned the land grabbing mood that is still around the MCN businesses, and this is not going to be solved next year. I think it takes more time. In terms of reporting and disclosures, I think we have started to give you more details, and we'll continue to do so as the businesses continue to grow. We need to think about what are really meaningful key performance indicators. We just discussed earlier the difficulties to put a solid profitability figure onto our digital activities. We need to find ways to find figures that are robust and reliable, and that are very easy to be interpreted.
We already gave you revenue figures for the combined activities of StyleHaul, Broadband, and SpotXchange. We're just discussing internally what are meaningful disclosures. We'll introduce those as time comes.
Okay. Thank you.
We have no further questions in the queue. Please be reminded, ladies and gentlemen, if you would like to ask a question, please press star one on your keypad now. There are no further questions. I'll hand back to your host to conclude today's conference. Thank you.
Thank you very much, everyone, for joining us today and for your questions. A brief special mention to Catherine, whose birthday it is today. Obviously, we'll be speaking to a number of you over the next few weeks. We'll obviously speak around the quarter three results in November. Thanks very much and goodbye.
Bye. Bye.
Thank you.
Cheers.
Thank you for joining today's call, ladies and gentlemen. You may now replace your handsets.