Métropole Télévision S.A. (MMT) Earnings Call Transcript & Summary

Well, good evening, one and all. Let's begin this presentation of the results for the M6 Group for the fiscal year 2022. As usual, I suggest that I first give you a summary of our TV audio and digital business via a short video. And then with my colleagues, we shall comment on these results, and then we'll have a Q&A. Well, the 2022 results, you saw the release about the accounts. Jérôme will comment on them. I simply wanted to dwell on a few items in this presentation about the strategic aspects. I'm sorry -- so the television -- traditional television market, of course, is undergoing a deep seated change. We started working on that as early as 2008, with the arrival of streaming with 6play. The transformation accelerated, especially in 2022 with a significant drop in viewing time for our linear channels. And this decline in viewing time should be offset and complemented with the development of our streaming activities. I'll come back in my conclusion to this presentation. Then in this environment, we are redefining a strategic road map for the group's business -- in the group's business, we shall continue on with our strategies and Regis Ravanas will explain the development of audio, especially radio and digital activities in connection with the group. And then [indiscernible] will explain what we'll do with TV and replay activities for the group. As you know, we've changed our Executive Board. The Supervisory Board has changed the Executive Board around myself will have [ Guillaume Shale ] in charge of content activities. He will be able to rely on Thomas Valentin, in particular, who is still in the company to take care of the content activities for the TV business. Mr. Larramendy will still deal with commercial activities, especially the advertising brokerage. But in particular, the transformation of all our resource activities, especially in order to maximize advertising revenues. We'll have [indiscernible], who's in charge of strategic activities and who will be in charge of the group's transformation, especially in the distribution and streaming business. And sorry, I should have started with her, [indiscernible], who is in charge of Public Relations and who is the Corporate Chief Operating Officer for the group. And of course, we can leverage the skills of Jérôme Lefébure for all finance and support activities for the group. And of course, Regis, who's in charge, as I said, of all audio and radio activities for the group. And you'll see that the year 2022 was an extremely satisfactory year. That's it for the group's organization, a new generation is coming on to gradually transform and change our company. Regarding the highlights of the year 2022, the context in advertising terms was uncertain. Jérôme will explain it with the international crisis and inflation. I'll say that from the get-go, there was a twofold base effect for M6 Group. On the one hand, in 2021, we had the 2020 euro that was postponed by a year. So we benefited from the Euro 21 in terms of revenues in the previous year, so an unfavorable base effect and with another negative base effect, which was the Football World Cup, which was very successful, which was broadcast on -- during the last quarter. We revisited a number of our diversification activities. In particular, we consolidated Stéphane Plaza's business, which is a big success within the group, and we disposed of our Best of TV business because it was now mature, and we were in a negative cycle for this home shopping activity. Overall, consolidated EBITDA for the group stood at EUR 336.2 million in margin from recurring operations, 24.6%. And if you compare that to the highest level of the group when restated for state subsidies in previous years, and we'll come back to that in detail. For net income, it stood at EUR 166 million. Keeping in mind that there are several effects the biggest of which are the share of the losses of Salto and the provision that we booked at the end of the year to expect the end of Salto and in particular, the wind-up charges for the company that was all provisioned in 2022, and that led to a decline in taxes, something that will be explained by Jérôme. And we had a capital gain in '21 due to Plaza Immobilier that was consolidated that was no longer accounted for by the equity method in the accounts that explains the gap in net income between '21 and '22. And in 2023, I'm anticipating a bit, but will have a positive effect. In principle, we no longer have any losses for Salto in our net income and will benefit from a capital gain on the accounts of our GSG Global selling group, our affiliates, as Jérôme will explain. Regarding the key figures for 2022, I'll throw it over to Jérôme will explain, we had revenues of [ EUR 1.357 billion ] and EBITDA of EUR 336.2 million. And on the slide, you can see that our revenues declined by about EUR 100 million compared to 2019, but EBITDA was up by a bit more than EUR 50 million when compared to 2019 and 2022. Operating margin, as Nicolas said, we reached 24.6%, especially thanks to a positive contribution from diversification, as we'll see later. If you look at the main aggregates beyond revenues in consolidated revenues, advertising revenues were down by minus 4.7% over the year, thanks because of strong pressure in Q4, especially because of the impact of the football World Cup, which concentrated advertisers on our main competitor. And so that sort of dried up the market in Q4. Operating expenses were managed throughout the year to adjust to the revenues context, they were down by minus 2.2%. And here, you can see the change in EBITDA with 2019, EUR 284.4 million, [ EUR 326.7 million ], excluding state support and EUR 334.4 this year. And the -- you see the net margin. And then the key figures per business segment, there's a decline in revenues and EBITDA for television. Radio slightly improved its revenues and improved its earnings, thanks to continued efforts that Regis will comment on. Production and audiovisual rights, a lineup and a smaller number of movies released. So fewer admissions, but good proceeds from other activities other than theaters, but there's a decline in EBITDA from 1 year to the next. Diversification, less revenue, but a strong increase in EBITDA, and you'll understand the levers of that with [indiscernible] a bit later. So those are the key figures for the year in total, EUR 33.5 million in revenues lost plus EUR 7.7 million in EBITDA, so a good change over the year in terms of performance. Regarding the CSR strategy and the plan like all groups, we made progress this year, and we worked on it so that we started working on the main goals of carbon footprint and sustainable production. Sustainable production is how can we produce in a more eco-responsible way in our audiovisual business, then we identified media literacy as a strong goal because that's the impact that the media can have on society and its development and also issues of digital and energy frugality core to our CSR strategy like developing reduced waste reduction and also equal opportunities that will be central to policy in 2022, we had our first carbon balance. We'll explain that in our nonfinancial statement, and we'll have a second carbon balance, which is being calculated with 2 data points, we'll be able to determine and we'll that shed light on that in the course of 2023, we'll be able to determine our nonfinancial goals for CSR. That's it for this main goal, and you'll have a lot of information in the universal registration document 2022.

Good evening. -- want to now to introduce my comments on the results from the television business. We wanted to take stock of changes in fundamentals. What you can see is that, of course, you can't deny it, there's a decline in viewing times for television. And there's also less equipment in terms of TV sets per house, a slight erosion for the whole audience. Sales of TV sets were good because of the World Cup. That's a traditional phenomenon, but you can see that the equipment rate is down slightly, although we started from a high base. For the younger population, 15% to 49%, the decline in equipment is also high, minus 3.5 percentage points versus 2019, but it's not a stronger acceleration than for the overall population. What is interesting, though, is to see that what TV sets are used for? And what you can observe is that there is an erosion in TV consumption, especially because of competition from other users. Here, you've got all users for TV sets for the whole audience. And you can see that the weight of other users went from 15% to 20% in 3 years. For other users, there's SVOD that we hear a lot about with big American platforms, but there's also video games and other types of consumption. And for the youngest population, this is where the transition was more marked. In terms of subscriptions, you can see the beginning of a plateau for major SVOD subscriptions, does that indicate a stabilization? We don't know, but that's a major competitor for television. However, sometimes you need to put things into context and highlight other users for French people. Here, you've got statistics for everything that people do on Internet screens and TV screens. And here, you can see in blue, the share of television in all the people's uses of their screens. And here, you can see that without challenge, that's TV strength, we are 2.7x higher than the aggregated use of YouTube and SVOD. So cost television is declining, but it's still an essential medium. That's what you can see here. And in purple, these are all the other users, including the Internet. And you can see that this is where the competition comes from. Competition for retention as it's called sometimes because there's an increase in these users. We're talking about other social media and other types of users. And for the 15 to 49 group, of course, television remains essential and much more powerful than YouTube and SVOD combined. However, we're not resting on our laurels there and we are relying on the media assets in the group, in particular, in the area of video, linear TV channels are, of course, key assets. But as Nicolas said, VOD with 6 play, we now have 24 million members millions of monthly users. So we have a lever to grow nonlinear users via the 6play platform. Mirova, very often, we are pioneers in new modes of consumption of media. So for a very long time, we've fully embraced social media. This year, over 5 billion videos were viewed on social media. This is virtuous on 2 counts. We can promote what we do to a younger audience. Sometimes they can discover our programs. And it's also financial vector because we get advertising revenues from these operations. So this is a major aspect that's going to accelerate in the next few years, and we will invest massively at least in even stronger digitalization of our content. And for television for the TV business, it was a slightly specific year. The War in Ukraine, the World Cup, major events and the base effect with the euro, the previous year, but we held up well on the commercial target, which is what matters. We can see that all group channels on the commercial target had maintained their performance, the performance for the whole population, which is an indicator that we track a bit less in financial terms. Part of the decline is explained by this aging phenomenon. That's for the absolute audience share in Europe, public broadcasting with an older audience are see their audience share growing because of the older population. We often say that prime time is very important for a group of TV channels. I'd like to insist on a very important element. The performance of all of our channels during prime time. You see it here on this graph. It is the best historic year on the target for prime time in the M6 Group. We've had a lot of launches. It's very important to be able to regenerate brands. You'll see it later brand by brand, what has happened. But today, if we add the 20 to the - [ 8 to 9 o'clock ], 60% of the advertising performance indicators are very good, and we have had problems elsewhere. Here, you see the same thing for prime time. And you see that M6 is the only historic channel to have progress at a record level in the last 10 years. So fundamentals on the target -- commercial target in prime time are very promising. How is it that we've been able to maintain and increase our prime time audience through the brands, historic brands, -- but a lot of work that we're doing with [ Tomas consists ] in renewing those brands. You see that [indiscernible] has had its best season [indiscernible] second best season [indiscernible]. We also are able to launch novelties [indiscernible]. I hope you've seen that is a new game. It's the best launch in the last 21 years for women responsible for purchases. We've also renewed our portfolio with games, magazines, life magazines. Last point, -- we also insist M6 remains a reference in terms of news [indiscernible]. We have had very good performance and even record performance for [indiscernible] are the 2 information magazines that are most watched on French TV, especially in access prime time. All of our performance is also based on DTT channels. Here, you see W9,3.6 versus [ 3.6 air ] has made a very interesting progression with the new prime and day time offer and the mutation of Gulli -- it's an hybrid model children during the day and Gulli [indiscernible] is the new program for prime time. Here again, this has been successful because we've had the best historic audience on the target for the channel. In a few words on each of the channels for W9, it is the favorite DTT channels for the French. It is the best prime year in the last 4 years. We've had an excellent launch for TV reality for reality issues, we still have a very good offer of magazines and cinema. 6ter is the second best historic year leader in DTTHD, the best year in prime time. So a very good season done by 6ter that allows us to have very strong performance as Gulli, as I said, it is a real mutation towards a hybrid model that has allowed us to have a good performance. [indiscernible] are doing very well. [indiscernible] is doing its best historic year for the under the minus 20, the EUR 150 million and [ Teva ] has had also among the top 3. Regarding the on-demand audience, on-demand TV, as you say, is very important. Here again we have to adapt to the change in the environment. As we said, it is a real opportunity because it is by far our youngest media 56% of the audience is under 50. So we have younger viewers who discover our program on 6plays. So we have to take advantage of that to propose even more content. The other important point is that people watching 6 lay remain on it. So we're leaders on free platforms in terms of time spent. The contents are interesting. We can, in fact, have an average use time of 1 hour and 3 minutes, which is huge. As I said, also [ 17 million ] of monthly coverage, 17 million French who come and see our content every month. It's up to us to keep that figure. So today, how is it that we intend to increase 6play's ability to attract faithful viewers. The first thing we've done is to invest in specific contents. Today, we have bought catalogs. We've produced our own production. We have a specific and proprietary content. 6play is becoming a platform that proposes specific content, often for younger public. What you see is that those proprietary unique programs have increased by 38%. That has increased by 38%. The time spent watching those programs. And the second novelty is [ 6-playmax ] in 2022. That is more for the viewing experience more than pay offer like Salto. It's a new use we can propose for those people who want more viewing experience. One last point, as we said, in the digital, you have the linear, the nonlinear, our own platforms. And the third thing is the social media and the reinforce collaboration, the anticipated collaboration with a major social media such that today, with our teams, we can have phenomenal performance, 5.1 billion videos seen, 48 million subscribers or followers and a lot of accounts and publication. There's a distinction to be made. Our platforms and our channels is for content. Social media is for short content. And viewers and the market understand that difference. So we now have an approach with the social media that is very complementary.

Hello to all. I'd like to say a word about radio. We have a market that is shrinking a little minus 1% in 2022 in the number of listeners and also of the listening time, as you can see, but still 72% of the French who listen to radio every day, which means is still a very powerful media. If you look at what's going on in terms of digital consumption, it is increasing in a very dynamic fashion, [ 98% ] of people listen to the radio on their smartphone or other digital devices. What's the situation between the different private groups, M6 is still leader among private groups. So we have increased in 2022 by 2 points, 0.2 points [indiscernible] is also well positioned. And in fact, we have also Lagardere that is going through a difficult time in TF1 publicity. If we zoom on the different radio stations, we realize that RTL is doing its fourth best performance historically. So very good 22 RTL2, -- it is a historic record. RTL 2 has never had such a score, but [ fund ] radio minus 0.3 points. The public service is doing very well, especially [indiscernible] is in a critical situation. There's a new rating measurement that has been implemented very recently which is equivalent to what we have in TV. And if we believe the results of that study that is more reliable, RTL is the #1 channel in France. Small focus on the digital activities. As Nicolas was saying, the activity is growing. The French people are listening to an increasing number of podcasts, 17 million French people listen to podcast, plus 17% versus last year. And we see that, in fact, the M6 Group is the first private operator in the area of podcast in France with the highest dynamic compared to its competitors. So well positioned for this translation of the market from the linear towards nonlinear or on-demand.

Good evening to all. The year has been quite special in terms of advertising revenue, minus 4.7%. The market has slowed down after Q2. And the second part, as Nicolas was saying, we've had a dual negative effect, a base effect because we had broadcast euro last year and 100% of the advertising revenue of the FIFA World Cup was for TF1 and [ B Sports ]. So those 2 negative effects explain this delay, which means that we have a difference with 2029. If you look now, the more positive aspects, all of the digital sales have been doing very well. We have a double-digit growth driven by play that is always doing very well, still doing very well. We've had also a good development of segmented advertising. The -- we have multiplied by 7. The advertisers are back, and we have good prospects for the development of this activity in the future years. It is a very important activity as [ Regis ] was saying in terms of digital audio, we also have a growth of 60% and change of all of our digital activities, which were very much becoming almost all audio that will take place next year or the year after. I might anticipate the first question that will be asked what about 2023? It's always difficult. You know that we have less visibility every year. But what is clear is that we're not in the same approach as the first quarter. February is quite slow. We're in the middle of annual negotiations, which are difficult with strong inflation. It's too early to know, but we don't have the feeling that the strong break that will continue in the beginning of 2023. Jérôme.

Now a few key figures about the 3 segments. First, TV we've just talked about, significant efforts were made to manage the cost to absorb the drop in revenue in advertising revenue. So you see the level of EBITDA, [ EUR 163 million, EUR 263 million ]. And this is thanks to optimized programming cost management and also better management of cost, the rotation between the channels inside the group. That is 4 of the TV activity with all of our channels, not only M6. Then regarding radio, the revenue has been stable Regis teams have answered by increasing cost control, making savings in programming costs and a lot of synergies with TVs, be it in terms of TV and entertainment. So an ability to have an EBITDA of EUR 34 million in 2017 when the radio division was a broad EBITDA was 15.5 million. So we are on target, given the plan we had announced that, if I may, is an important point. The group's activity, the notion of group is essential. The synergies with radio, TV, digital. All this is very important today. in each entity, there are a lot of synergies that have been implemented between the different teams, for example. And RTL [indiscernible] is now in charge of the weekend news programs during the weekend on M6. The editorial, we have RTL, [indiscernible] are announced on M6 in the evening news program. We have promotional synergies between our channels. So this result is programming costs have remained more or less the same. We have had no savings on the programming structure of RTL, for example, but we have had synergies allowing us to save on operating costs, building technical organization. And then all this has allowed us to maintain high performance for the 3 radios because they can count on a group and vice versa. For example, when we go in Turkey, we have common teams. When we go to Ukraine, we have joint teams when we have correspondents Here, we have had something taking place in [indiscernible] was investigator. There was a common task force between M6 and RTL. It is an [indiscernible] journalist who has interviewed the judge in [indiscernible] both on M6 and in RTL. So this notion of group is fundamental if we want to keep -- want to have a viable having -- but while respecting the specificity [indiscernible]. So to reinforce the notion of group, the PDA segment, this year, we have revenue that is slightly down, minus EUR 4.5 million, a reduction of [ EUR 3 million ]. We had a good base effect last year related to the [ Kaamelott ]. This year, we have had 12 launches with a number of admission per movie that was lower. So a contribution to the revenue was lower. Since the depreciation is -- has an effect on profitability. Maybe he can tell you about diversifications.

Good evening to all. Diversification, you know that there are specificity of the M6 Group. Here again, there is a principle of synergies that was applied here, you see the diversification we're consolidating that we are controlling. It is a good year in 2022 because the EBITDA of this group has increased quite significantly. In 2022, it is an engine for the group, driving the group's profitability. Why is that? Because we have rotated the portfolio. Today, we have totally sold our home shopping division. Best of TV was sold last year. So we're no longer present in this sector that was going down. But we have controlled Stéphane Plaza Immobilier, a company we launched in 2014. We had 49% of it. The company is doing extremely well is building on the synergy, the presence of Stéphane Plaza, the strength of the advertising, promoting this company. We've acquired 2%, and we're controlling this company. We want to consolidate and is doing very well. It still has more potential.

Now regarding the companies that we do not control that are accounted for by the equity method. We can see them as a real value reservoir because you can see that they're operating on business segments that have a big future. There's Bedrock in streaming that has a specific status. It's clearly strategic diversification for us in their operator Europe-wide. And then there's a market -- digital marketing, which is very powerful, promoting e-commerce based on different types of services. A big company here, GSG, Global Savings Group that Jérôme mentioned, it's present in over 20 countries worldwide with a big presence in Europe, Germany, U.K. and France. We are now the biggest shareholder. This is a growing company that should have in 2023, probably over EUR 200 million in turnover. The other activities, I won't dwell on them. Is our diversification policy. We bought a company that was called [indiscernible]. This company, we had a choice either to dispose of it. There was a big player on the market that wanted to buy it or to merge it and take over the company, GSG, which was a German company based in Munich operating in digital marketing, as [indiscernible] said. We had a cash part, so we got EUR 35 million during COVID out of the disposal of [indiscernible]. And we had [ about billion] shares, and we are now the biggest shareholder in bigger shareholder in GSG. And they're on the offensive buying up companies in Europe and Germany, in particular. So probably in 2024, '25, they should have an IPO and then we'll probably recycle our portfolio diversification as we did for [indiscernible] and other diversifications. Yes, to wrap up, we still have a media for equity activity that is very selective. We have Miliboo, we bought a relatively small stake. It has a turnover that is quite significant, and we're sowing seeds every year. On this slide, you don't have a business that we launched in 2022 called Academy, which is a joint venture with Galileo, the French leader in education services. It was created from scratch on the very buoyant segment, e-learning. And I hope that next year, I'll have more to say to you about that. A few words on the financial statements. The profit and loss account, we've just commented on it in great detail. So on the EBITDA, you have the difference between '21 and '22 in terms of capital gains from disposals, EUR 50 million last year and the first consolidation and capital gain on the revaluation of the assets, 20%, and this year, provisions on stakes and the divestment of Best of TV, which is one of the main explanations for this capital loss in '22. Regarding the next line, you all know that it's due to the PPAs that we have on the various acquisitions since radio, Gulli and others, Stéphane Plaza, in particular, -- and below that, the key element is the share of profit of joint ventures and associates, which reached EUR 71 million in losses versus EUR 31 million last year. So that's just EUR 40 million, EUR 40 million difference explained in particular, as we said by the anticipation at 31st December 22 of the possible winding up of Salto. That's EUR 22 million amongst the losses. To that, you should add the operating losses for Salto for 2022. We all recognize that Salton in '22 was able to reduce its operating losses from EUR 86 million to EUR 72 million in '22, whilst reaching a subscriber base of around 1 million subscribers, but the viability of this tool is complicated. What's more you also have the other investments that Ares just told you about. All of them contribute to start-up losses, but with good industrial projects. For the line relating to income tax. To remind you that this year, we're coming back to a nominal tax rate, which is in line with previous years. Of course, we have benefited from the lower CIT rate, and we had a lower tax charge last year because we had a short-term merger aligned so that we could reduce our tax charge. And so EUR 165.9 million in net profit and group share, EUR 161.5 million versus EUR 280 million last year. That's a profit and loss account little to say about the balance sheet, very little change in the long-term assets of liabilities, mostly changes in working capital requirements, there are [ WCR ] for our media activities, [ Sakaro Media ] activities went and downs with the COVID effects in 2020 than the exit of COVID, which was favorable in terms of WCR. Then 2022, which corrected these favorable effects and welcoming back to a quite nominal level in terms of free cash flow generation from operations. And here, in the cash flow statement, you've got the EUR 26 million change for the fiscal year in total. That's explained by this reduction in WCR consumption. We used EUR 36 million in cash versus a resource of EUR 73 million last year. More income tax paid because in the previous year, we had the COVID year so we had the reductions on the direct tax charge for '21. So that's for operations. But for recurring investment activities that are slightly lower and of postponement of cinema production, whereas last year, we benefited from disposal proceeds on one-offs. And especially, we captured Stéphane [ Plaza's cash ] in December '21 and the cash-in of the remainder of the disposal of our 51% of Bedrock to RTL Group. And the dividend paid in '22 accounted for EUR 126 million plus some dividends paid to associates of Plaza Immobilier. And also, we continued to contribute to contributions to joint venture current accounts for especially Salto and Bedrock that used resources from the group to conduct their activities. That's the cash flow statement. And as announced in the statement in the press release, we are proposing to pay out a dividend of EUR 1 per share like last year. And the coupon date is on 3rd May, but I think it's in the press release, and it will be paid out on 5 May. That's it for the income statement.

Thank you, Jérôme. Here, you've got the key figures on CSR matters, especially our goals in terms of energy savings and the creation of indicators. Let me point out that all employees who have variable pay in the group will have 10% of their variable pay calculated on the CSR policy with precise indicators, quantitative indicators on the CSR policy. And now if you agree will answer your questions. Just one word maybe about Salto, if you agree, because that's a major aspect in the financials. So we financed the loss for 2022, but we also booked a provision for the possible discontinuation of Salto in 2023, which will materialize in a loss and wind-up costs that were provisioned for EUR 22 million in the accounts for 2022. And the loss of EUR 46.1 million on the netting, which is a drag on net income. Why is Salto stopping? And what's going to be the streaming policy for the group, Salto ending for 2 reasons, 2 main reasons. Salto is a service, which can be called SVOD because it's partly paid by consumers, by viewers, yet our analysis when we created Salto was that our group did not have the ability to offer a full-fledged SVOD service because of our financial cloud because of our programming capacity and international competition from well-established platforms worldwide. So to take up the [indiscernible] in France, we decided to be associated with our 2 main competitors, France Televisions and TF1 Group in a common association. For us, we -- that was a way to anticipate on the merger with TF1. This was rejected by competition authorities, despite its relevance on the one hand. And on the other hand, it's a similar translation of extremely [ finding ] routes on the working of Salto because of the self-same competition authority who wanted a Chinese wall between competing operators on the television markets free-to-air legacy television. So it's extraordinarily difficult. For instance, we didn't have the same bands when we created TPS. TPS was a success because we were able to manage it with the TF1 group, in particular, as a joint company with exchanges of information. We discussed channels, we discussed programs and costs. We looked at each other's investment. There was full transparency between partners in the TPS operation that lasted for 10 years that I knew well, and that ended up in a successful sale to [indiscernible] to turn it into a pay-TV operator, but that was impossible neither with TF1 or with France Televisions to create an SVOD system. The decisions by the competition authority on the substance of the working of Salto were extremely binding. For instance, we didn't know the supply costs for Salto. There was a Chinese wall for all 3 partners on supply and costs. So it's difficult to have a policy because we couldn't discuss about the operating costs of Salto, the biggest of them being the programming costs and also Board meetings that I took part in with [indiscernible], we're still under the eye of a [ mandate ]. And each time there was a question that could be answered by this or that a partner like distribution costs, the mandate raised his hand and said stop there. So it was unworkable. And I said that at the Senate when I was heard by the Senate saying that it was impossible to pull off an operation like Salto with the operating rules that were imposed by the competition authorities. That was reason one. Reason 2 is, of course, the same. It resulted in the impossibility of having a merger and then we could have had a very ambitious streaming policy, especially with FVOD if we had combined forces with TF1 group, it wasn't possible. Okay. Let's take note of it. And 3 operators have a 4 refused to acquire Salto. And that leads me to a comment. It's very important for TV groups like ours to not be intermediated by distributors that decide the future of our groups. And that's the whole problem of our relations with distributors. We need to have direct contact with viewers to have control over data over our marketing and not be intermediated via ISPs and modems and boxes. And we saw that these distributors have a right of life and death over publishers. First, they can have contradictory interest. They can be publishers themselves. And so you're talking about net neutrality, but there's no neutrality of ISPs, -- how are they positioned? And how do they promote programs and so on, that's a real issue. And the second issue is that, for instance, when you have addressed advertising, it's a lot harder to go through boxes rather than go OTT. So we need to have control over distribution. That's why we're applying for DTT frequency for the M6 channel, and that's why we want to keep that direct connection and we'll evolve DTT very often. It was hamstrung by the opposition of telco operators. There were opposed to changes in DTT. And so with HbbTV standard, we want to have a direct relationship with our viewers. That's the first thing. And secondly, we know that audiences are moving OTT. All televisions are connected. Now the number of connected TVs is higher and higher. So there's going to have to be a transition between the world of ISP boxes, which is dominant now and the world of OTT, which will be dominant in the future. This is something we need to negotiate with distributors on a partnership basis, but it needs to be equitable and fair equitable and fair so that we can get access to our applications. That's very important. We need to have control over data. Now contrary to what they say, be it on the financial terms or the technological terms, the relationship is skewed and unfair, and that's why we need to have control and take back direct contact with our audience. Why is the relationship skewed? Well, because we have a problem with fees over boxes fees, in particular, on how we can use data. And on addressable advertising, there's only 7 million boxes now that can get access to addressable advertising, and there should be technological investments in this operation. And also the smoothness in the way the audience uses equipment is higher with OTT than with boxes. So we need to work with all operators to make the relationship between publishers and distributors smoother. That was always a stumbling block between the manufacturing, the production world that we are in the distribution world in a lot of businesses in Agrifoods. -- you can see that is the case. And audiovisual is no exception. The relationship between producers and distributors, that's the reason why you could say that there's only 30% of the population that receives DTT, so why are you fighting to get a DTT standard and so on? Again, well, because with DTT, we can have a direct relationship that it's fundamental for us to have this relationship, and we know that over the long term, there will still be this direct relationship with the audience via on the one hand, OTT and DTT. So we need to have that transition between the world of boxes, and we need to change it. We are not enemies of ISPs. We are partners for them, but we need to have a more effective and efficient cooperation, especially in technological terms. We offered the services of Bedrock to one of them because it's absolutely necessary for ISPs to make bigger efforts to adapt boxes to the world of television.

[indiscernible] I had questions about the advertising trend. Could you explain sector by sector, whether there were changes between the beginning of the year and Q4, if there were sectors that were up or down? And then about advertising trends, how is the trend going for digital versus TV. That was question one. Question 2, about programming costs and costs overall, first of all, programming costs, what are the trends for 2023 and especially regarding priorities and format? Is there going to be growth in 2023? And for 6play, some of the savings generated on Salto will that be transferred to 6play? Is there going to be an increase in the investment envelope -- and last question about taxes. I can see that the tax rate is higher than the normative tax rate for 2022. I've calculated 31%. So should we -- what should we expect for 2023, especially vis-a-vis Salto in the introduction, you said that there would be a tax impact. You didn't explain that again. So what should we expect in terms of corporate income tax rate for 2023, so that we don't end up at midnight.

Well, I'll give a very rough summary. For advertising for 2023, there are still sectors that are impacted, especially FMCGs that are fully impacted by inflation problems. Historically, these were big advertisers for the TV market. The benefit of that drawback is that very often, these are big advertisers with excellent conditions. And so as long as we can replace them or replace the volumes that they give us back with customers for which the conditions are -- the terms are a bit more balanced. That's good. For automotive, there's the beginning of a return to normal, although they haven't yet really made a comeback to those players, but it seems to be normalizing. For your question on digital, indeed, the year starting as it did in 2022 rather well. 6play is doing very well segmented. Advertising is still growing. Audio is also growing as well. Are there any further questions about costs?

Well, about advertising, digital advertising.

It's working out well. It's working well says [indiscernible] the message from competitors is rather negative. Well, we're rather positive as far as video is concerned. Well, yes, the growth that we had in the digital market, especially as you saw the [indiscernible] published a survey 2 weeks ago, there was a break from H2 onwards with a lower growth rate. It's not really the case for us. Not really for us. Over the long term, is that going to hold up. It's very difficult to manage, but we are attractive, especially with our 6play format. That's due to the conjunction of 2 things. On the one hand, our TV experience, the fact that it's TV content, the brand safety is very important for brands. And then data, we have more data with OTT than with IPTV. And we're combining the 2 is a value proposition that advertisers still seem to be keen on. On programming costs and our investment in 6play, that was what we -- what your question was about, we'll go full steam ahead. We've got the technology with Bedrock. We've got a very robust base with 6play. And unfortunately, we'll get back our investment on Salto, programs we won't have to finance there. So we'll be able to invest in 6play. On the one hand, and the investment that we're making in Salto will be transferred to 6 play, of course. So we are currently fully reviewing this business -- we are convinced that we shouldn't think in terms of digital investment or linear investment. We are convinced that it's the same ecosystem. First, there will be linear successes. I mean, don't bury legacy TV now. It's the biggest media. Our customers want it, and some are coming back from digital social media coming back to TV. That's a significant trend. A number of clients need to have the reach to have the firepower and quick execution. So linear TV still has that factor. But you've also got streaming nonlinear TV, which is complementary. And here, we're thinking along a total envelope -- it's no longer the 80s. We are thinking in terms of an overall budget for our programs and more and more comprehensive for all our channels. Before that, we already had a comprehensive organization for linear TV, we're integrating a comprehensive organization for nonlinear. So it's an ecosystem in which we've got brands with editorial lines, but it's all made up of a number of programs that -- or content that we publish that we have made or that we make ourselves. The sum total of that is that going to grow? If that's the question, the answer at the very least is that we're going to increase that by what we invested in Salto, but we'll get the results at the end of H1, but we will probably accelerate our investments so that, for instance, let me give you 2 examples where we are accelerating investments. We are looking at a call for projects for a soap opera, so to speak, for 2024 because it can be streamed. So we'll focus on the soap opera more than sports, which you cannot stream to give you, but one example of what M6 is doing. Similarly, in movies, we need big assets. We already had 2 movies. Thomas will correct me, but to Asterix animated movies, which are a big success. It's a big asset for the group, and we financed 100% of them. We'll launch new projects, over EUR 30 million of budget for new Asterix animated movie and it's an asset available to the group. Are we going to use it in movie theaters, for replay or preview on this or that channel? We don't know. It's an ecosystem where we have a number of options open to present that to viewers. Let me repeat that what is very important that we keep this direct contact with the audience either via apps. And so the app battle is very important, all through DTT, so that we can get access and hoping that this new standard will modernize things.

And for the tax rate, that was my question.

Well, first, A reminder, in '21, the theoretical tax would have been EUR 105 million, EUR 106 million. We had EUR 76 million to EUR 30 million discrepancy was a short-term merger, big volume on capital gains for disposals at reduced rates. And then the state subsidies that were not taxable. So if you do the sum total level that you get a tax rate in '21, which was atypical because it was slightly over 20% when it should have been at 28%. This year, the theoretical rate is rather than normally at 25.8%, and we are slightly above that because to that 25.8 million, we added the CVAE that we always booked in our tax charges. So for 2023 for your models will be below this year's rate for 2 reasons. First, the tax rate now will be nominal and the CVAE will be halved in '23 and fully disappeared 24. So our I think it's reasonable to use 26.5% as a matter of caution.

Hello. I have 3 questions. One, on the advertising market. Your reading of the arrival of Netflix and Disney. Do you think that this will weigh over the long term?

Yes. Indeed, the first experience in terms of advertising volume does not seem very successful, but it is, of course, a competitor, we have respect for. They have a lot of subscribers, a lot of consumption, so they should keep growing. Even though today, the impact on the TV advertising market is very low, but it's going to grow. I don't know to what point is always this balance they have to find between the model with subscription and/or with advertising. What's interesting is the price positioning around [ EUR 49 CPM ], EUR 49 by CPM, but it is a very high price for programs that are often the same -- on the same TV screen and the advertisers that are the same. For us, it is more an opportunity to have some our advertisers that it will be a good idea to increase the price to what they're ready to pay on Netflix. To complement what David says, first we have other competitors. We have Amazon First, when you look at the history, we in pay TV, there was a mix between advertising and pay-TV being sport, for example, is doing advertising during the World Cup. Then we've had the social media and the platforms. It is the whole ecosystem. We're trying to explain to competition authority. It is an assemble that is competing with us in all ecosystem. What David says is quite right, i.e., the proposition of Netflix and Disney gives value to the media. It's a good thing, but it remains a serious competitor, where there's a viewing time, consumption. So we are careful about that. it is good that they have high prices on the market.

Second question about 6 play and 6play Max. Do you have an idea of the number of subscribers you could have?

We don't give information about the number of our subscribers. 6play Max is comfort. It's not SVOD. We're replacing advertising, but the same programs are provided on 6play in AVOD and that are provided it's not SVOD -- it is a comfort -- it's a transformation of 6play in a non-advertising model advertise. So the start-up is quite good. The number of big TV consumers have come to join, I think that Salto stops -- we will benefit from that at the level of 6play, be it funded by advertising was 6play nonfunded by [ advertise ].

One last question regarding the renewal of the license and the worst of scenario, if it is not renewed and given to another candidate, have you made calculations about the possible loss range?

When you are in the middle of a battle, you don't think about retiring or retirement from that point of view, we are determined to win that battle. We have everything we need to win. There is a call for projects we're respecting everything we have to respect in [indiscernible] .

On the telephone, do we have any questions? [Operator Instructions]. Apparently, we've been very clear since there are no questions, any questions. One question has disappeared. There's nothing we can do about it. So thank you very much for having come -- so sorry, yes, go ahead. Yes, we can hear you. On Salto Christophe Cherblanc from Societe Generale.

One first question about the tax treatment of Salto. I thought it was a transparent company from what about the EUR 22 million, is that before tax? And another question about Bedrock. We're talking of a negative contribution of EUR 7 million. If you stop Salto, will that loss be higher in 2022 will be the tax treatment of it?

I don't know anything about the situation.

Second question, you said regarding Stéphane Plaza, I thought the contribution to EBIT was EUR 15 million, but is that a good order of magnitude. And last question about the authorization to broadcast. You don't intend to lose, but from a theoretical point of view, if there is a renewal or a change in the authorization holder. What happens? Is there scheduled to transfer. When I read the law, I thought there was a 2-month period during which the 2 holders could make an agreement. Is that still valid? What is going to be the approach?

The only thing I can tell you is that the company will answer to [indiscernible]. Of course, there will be no break in the reception of M6 programs. It is the end of the present authorization is on May 5, and we don't want to [indiscernible] of the French population now to be able to continue receiving M6 programs as of May 6. Regarding the tax treatment of Salto and Bedrock, Salto is an SNC. So the 22% is before tax. We take the income before tax, and we -- the losses of Salto EUR 46 million have a tax effect of about 12.5%. In our tax income. Regarding [ Medcom ], it's totally different. Bedrock is a 50-50 company, nonfiscally integrated -- and now it has launching deficit, which it is keeping for the moment. It is in the process of refining its widening of customers to have enough revenue given the costs incurred. And regarding Bedrock and Salto, the comparison between the 2, in fact, we have right away as Bedrock to review their number of providers to start adapting and make sure that Bedrock's cost base is adapted to the loss in [ revenue ]. This is a company in which we've been able to -- we've been able to migrate customers like that in Holland with no problem. So but ROC has proven its efficiency. On top of that, we're going to develop within RTL streaming activities to which Bedrock is going to contribute. And we're still in the process of investing. There are a technological company. It's very important for us. It's part of our investment in streaming. We want to have a company in which we can pull a number of developments and have as in the Netherlands, a very powerful technological basis. The battle of technology is going to amplify in the future. Bedrock have has 350 external providers. They are a very important [ basis ] for us. We can add that Bedrock, the Salto was a loss-making contract. The last question was about Stéphane Plaza. The EBITDA in '22 is slightly higher than EUR 15 million. It is around EUR 17 million. One word about Salto. What is the date? Will it be the probable winding up? Maybe somebody could buy the company? Is it over second question. What about after the merger, I thought you wanted to maybe buy M&A. Several things in your question. First, the group has no debt is healthy. The group has substantial possibilities to develop. That is my first answer. Second thing, indeed, Salto, given its operating conditions, given the fact that the merger didn't take place. We're going to turn the page. There are a number of procedures going on. Jérôme will end the Salto chapter, and we will focus on our core business. We are rather -- we tend to fund our activities with advertising. So we're going to refocus on that business by developing investments. When you say the area of content, both to increase our content expenditures and provide them to all of our audiences, notably the younger audiences through streaming and the ecosystem I mentioned with channels of different brands, different editorial lines and a general app 6play to offer to our public, the big thing today, what is the level of investment to be made in all of our programming. And secondly, how can we have the best possible access both for our viewers, our public by starting the development in our distribution contracts. Finally, we also have a program to modernize the sales of advertising and optimize our advertising revenue. Those are the specific areas we're working on to continue development regarding M&A. If there are opportunities presenting themselves, we only have 5 DTT channels today. Maybe we will see whether there are other opportunities on the market.

About the share ownership you've met with a lot of shareholders. Well, one more than others. But after the TF1 sequence, maybe you met with other shareholders, one has entered your capital. Any idea about what it wants to do with it, what the project is. And the other subject that I wanted to discuss, RTL. RTL missed quite a few things in terms of diversification. So what is the strategy for you regarding the parent company?

Well, first of all, RTL Group is a good shareholder for us. They know the business. They have no conflicts of interest with distribution, as I said, in particular, the accountability and responsibility to local management, they're independent in editorial terms. And last but not least, they don't put a lot of debt in their affiliates. There was no leverage that they wanted with M6 with debt that would preclude our development. So it's all done with shared know-how for instance, in Bedrock, which is essential in the group with the competitive landscape that we have now. So the shareholder decided to stay in, they published a statement on 22 October, -- they decided to keep control of the company not to sell all or a part of its stake into M6. That's the first comment. The second comment there's a 51% float slightly over 51.5% float. CMA CGM thought it was interesting to accept M6's proposal in terms of share ownership. They invested into slightly over 8% of our capital. And now we have CMA CGM on our Board. They will take part in the next meeting. Now we are very happy that investors are recognizing the merits of our strategy and the merits of our group. And these are big investors, and they want to invest in media. Well, side-by-side with our controlling shareholder, we can only be satisfied with the interest that they have for our group and the trust that they are showing towards us that way.

Question inaudible.

We're talking about slightly more than 8%.

A question on the phone from Julien Roch -- you have the floor, sir.

The first one is about programming costs for the last few years is roughly EUR 500 million. You're saying that for transformation, you're going to invest at least what you invested into Salto. So what does that mean from EUR 500 million to how much? And ITV when they announced their transformation plan last year, they invested EUR 150 million more, so 13%. So that would be over EUR 50 million for you. Any comments? Or should we wait for the H1 results to get an idea on your transformation plan? That was question one. to know how much salt costs and the minimum amount for programming costs this year? Second question, could we get an idea of the split in advertising revenues between linear and nonlinear. You said that digital was working very well, but we have no indication of that. ITV gave figures. And ProSieben when we asked them, is 15% to 20% of advertising -- TV advertising revenues coming from digital? And third question, I never quite understood why French TV did not develop segmented advertising using HbbTV, either 1.5 or 2.5, what they're doing in Germany and now in Italy because Italy just signed a partnership with Samsung, why were you not more invested in HbbTV than the others for segmented TV. That was my 3 questions.

For the first question, the change in programming costs, well, programming costs? Well, the investment, I think that I answered that the investment in to Salto will be transferred over to 6play. So we are quite offensive and we'll probably talk about that amount of money, but we'll give you more color when we give you the interim accounts in July. That's the plan. But that's the investment at -- within the group scope. We don't segment between linear and nonlinear. For digital TV, we're talking about 10% of advertising revenues for advertising - for digital advertising and for segmented TV, HbbTV, David will answer.

For HbbTV, indeed, we ran some tests. So we marketed. We launched a product already at least 6 or 7 years ago. So theoretically, it's working well, but then it didn't really find a market in France unlike what happened in Germany. The main reason is that distribution is limited to DTT for 1/3 of the market, as you know. And since 2/3 are mostly going through ISP boxes. They block HbbTV signals in spite of our repeated requests to have it. So if one day we get it through negotiation or other means, once we get full signal, including HbbTV, we'll be able to grow on that type of segmented advertising similar to what our German friends did.

Maybe one last question. Can you hear me? Could I come back to my first question. I understand your answer, Nicolas say that you take the programming costs and you at least add what we spent on Salto. So that's an answer, yes. Yes. But what your spending on Salto is not very clear, is that the Salto programming costs or your loss of 30% or 100% of the loss.

What is fairly simple. The investment we're making in Salto is about the loss of 1/3. That's one thing. And we're checking how much we're going to increase our programming costs so that we have a commensurate growth in streaming. But it's proportionate to our distribution agreements. I'll insist on that. It's no you spending a lot on streaming if we don't get access to TVs. If we don't get enough access to box data. Now advertising through boxes for replay is much less interesting than what we have OTT. Why? Because box technology or investments that were made on boxes is hampering our advertising investment. So that's why I can't give you a very precise answer to your question. In parallel, we'll see how we can ally linear and nonlinear. That's one. And 2, how can we expose our streaming services to the widest number possible.

You said that H2 was difficult for advertising next year. That will be the Rugby World Cup that you got some matches for. Are you expecting an increase in H2? And so an anti-base effect? And same question for '24 with the Olympics. Just to understand the various factors.

Well, for us, yes, we've got a number of fixtures in the Rugby World Cup. There won't be the same effect as the euro because in terms of viewership, it won't be the same. But a potential recovery depends on a lot of outside factors, less inflationary pressure at the end of the Ukraine situation, we are dependent on some external factors. And although the Rugby World Cup is a high-quality event, I don't think it can turn the situation around. That's why we are very cautious about the latter part of the year.

And with the Olympics, are you observing similar effects?

Well, it's far off isn't it? And we'll get the Euro in '24 as well.

Yes. Well, thank you very much. Now see you back probably over the phone for the interim accounts for H1 for our group. Thank you. [Statements in English on this transcript were spoken by an interpreter present on the live call.]