ProSiebenSat.1 Media SE (PSM) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen. Welcome to our Second Quarter First Half 2024 Results Conference Call of ProSiebenSat.1 Media SE. This conference is being recorded. Today's call is hosted by Mr. Dirk Voigtländer. Please go ahead, sir.

Good morning, ladies and gentlemen, and thank you for joining ProSiebenSat.1's Q2 and H1 2024 Results Conference Call. Today's call will be hosted by Bert Habets, CEO of ProSiebenSat.1; and Martin Mildner, our CFO. Bert and Martin will start by presenting our financial and operational performance for the reporting period. Bert will then conclude with remarks on our outlook for the current financial year, which we have confirmed today. Following the presentation, we will open the floor for a Q&A session. With this, I hand over to Bert.

Good morning, everyone, also from my side, and thanks for joining our results call on the second quarter and the first half of the year 2024. Let me provide you with an overview of our financial performance in the second quarter. Overall, we are satisfied with our business performance. And after a good start into the year in the first quarter, we have continued our growth in terms of both revenues and earnings in the second quarter. Our group revenues increased by 5% to EUR 907 million. This represents the growing Entertainment segment as well as the very positive trend in our Commerce & Ventures segment. As expected, the revenue development of our advertising business was clearly influenced by the shift in audience and advertising market share during the European soccer championship. In this context, our entertainment advertising revenues in the DACH region showed an overall increase of 1% in the second quarter. However, our digital and smart business in the DACH region once again recorded dynamic growth and expanded by 12% compared to the previous year. This clearly shows that our strategic focus continues to pay off. If you look at our Commerce & Ventures segment, the very positive trend continues here as well. In the second quarter, the segment revenues grew by 17%. To sum it up, our figures clearly show that we are on track to achieve the financial targets for the full year 2024, which we have, therefore, confirmed today. And with this, I hand over to Martin.

Thank you, Bert, and good morning also from my side. I will now continue with an overview of the key financial figures for the second quarter and the first half of the year 2024. ProSiebenSat.1 continued its positive start to the year. You can see on Page 6 that group revenues increased by 5% in both the second quarter and the first 6 months, leading to a total of EUR 907 million and EUR 1.774 billion, respectively. This result was driven by an increase in revenues in the Entertainment segment and the very positive development in the Commerce & Ventures segment. On a currency and portfolio adjusted basis, group revenues grew by 5% in the second quarter and by 6% in the first half. As expected, the group's advertising business was impacted in the second quarter by an earlier Easter date on the one hand and the UEFA European Football Championship on the other hand. As a result, group advertising revenues increased by only 3%. Adjusted EBITDA was up 14% to EUR 91 million in the second quarter. This was supported by higher group revenues and consistent cost reductions, in particular related to the cost program implemented last year. The resulting savings effect became already fully visible in the first quarter and also materialized in the second quarter. In the first half of the year, adjusted EBITDA increased by 23% to EUR 163 million. Our adjusted net income improved significantly by EUR 21 million in the second quarter. This was mainly due to the positive development of our adjusted EBITDA. Our adjusted operating free cash flow saw a notable improvement in the second quarter of 2024, reaching a total of EUR 65 million. In addition to the growth in earnings, the postponement of investments in programming assets had a particularly positive impact. So let's take a closer look at the Entertainment segment, which you can find on Page 7 of our presentation. Entertainment segment revenues were up by 3% to EUR 612 million in the second quarter and by 4% to EUR 1.165 billion in the first 6 months. The advertising revenues in the DACH region grew by 1% in the second quarter, impacted, as I already stated by the early Easter date and in particular, the European Football Championship in June. Please note that the [ year ] 2024 led to an audience and advertising share decline, given that the event was broadcasted on public broadcasting channels as well as on RTL. While TV advertising revenues declined by 1% in the second quarter, our digital and smart advertising revenues increased by 12% compared to the same period last year with Joyn being the main growth driver. This demonstrates that our strategy to focus on Joyn is proving to be successful. Our distribution business grew strongly by 13% in the second quarter. The main factors for our HD subscriber growth are lying in our partnerships with strong growing IPTV and OTT platforms. In particular, our recently announced partnership deal with Deutsche Telekom on its Magenta platform recorded a strong HD subscriber growth in the second quarter. Our content business increased by 32%, which is largely due to a phasing effect. However, we are also targeting revenue growth for the full year. If you look in the revenue line, other, you will recognize a negative effect of 5% in the second quarter. This decline in revenues is linked to a production cost subsidy in the previous year. The SVoD revenues of our streaming platform, Joyn, which are also included in other, showed double-digit percentage growth in the second quarter. The adjusted EBITDA in the Entertainment segment amounted to EUR 71 million in Q2 and EUR 116 million in H1. This represents a percentage growth of 16% in Q2 and 26% in H1. We achieved this result despite the previously announced increase in programming expenses. Compared to the second quarter of 2023, programming costs were up by EUR 10 million to EUR 252 million, despite reduced spending during the European Football Championship. I clearly like to note that our group is investing more in our program and especially in exclusive local content to strengthen our reach and especially the growth of Joyn. Nevertheless, we are able to offset these effects of program expenses on our EBITDA through an efficient cost management. So please turn to Page #8, where we are now coming to the performance of our segment, Commerce & Ventures. Our Commerce & Ventures segment recorded a strong revenue growth of 17% in the second quarter. Adjusted for currency effects and portfolio changes, the growth even amounted to 21%. For the first half of the year, reported revenue growth was 19%. On a currency and portfolio adjusted basis, segment revenues grew by 22%. In particular, the advertising business with SevenVentures and SevenGrowth performed strongly, with revenue increasing by EUR 10 million in the second quarter due to the general market recovery. So our digital platforms and commerce business grew by 13% in Q2. The main growth driver was the online beauty provider, Flaconi, which is a part of the beauty and lifestyle vertical. Even the sale of [ Dialight ] at the beginning of February of this year didn't slow down the strong double-digit percentage growth of Beauty & Lifestyle of around 25%. Dialight contributed EUR 3 million to revenues in the second quarter of the last year. The consumer advice vertical grew by 5% in the second quarter, reflecting both a stable performance of the online comparison portal, Verivox, as well as mid-double-digit percentage revenue growth of around Home. The decline in experiences is mainly due to the disposal of Regiondo in June 2023. Its contribution to revenues in the second quarter of last year was EUR 2 million. The adjusted EBITDA for Commerce & Ventures increased sixfold to EUR 12 million compared to the same quarter last year. In the first 6 months, the segment recorded an increase from EUR 6 million to EUR 29 million. The strong increase in Q2 was driven by the very positive development of the high-margin advertising business and the profitable growth of Flaconi. The disposal of Regiondo last year also had a positive effect on earnings, as Regiondo had made a negative contribution in the previous year. Let's now have a look at the performance of Dating & video on Page 9. The revenues of the Dating & Video segment amounted to EUR 98 million in Q and to EUR 205 million in H1, which represents a decline of 9% in both Q2 and H1. The Dating revenues declined by 13% in Q2, due to consumer restraint and increased competition, especially in the U.S. Here in the U.S., eharmony's new customer acquisition was impacted by the increased marketing and media expenditure of its U.S. competitors. However, our European Dating apps showed a stabilization in terms of new customer intake during the second quarter compared to the last year. Please also note effects from the German fair consumer contract regulation are now fully considered in all affected contract terms. The revenues in the Video business declined by 4% in the second quarter, but the focus of our live streaming efforts on our owned and operated apps continued to develop positively with an 11% increase in revenues of these offerings in Q2 2024 compared to the previous year. We have seen many streamers who are leaving our competitors and joining our own apps as we continue to develop our live stream product with innovation like streamer subscriptions. The discontinuation of plenty of [ first ] live stream offering should also have a positive effect in the future. The adjusted EBITDA amounted to EUR 14 million in the second quarter, down 18% on the previous year's figure. In the first half of the year, adjusted EBITDA decreased to EUR 31 million. The group is focusing on cost efficiency in all segments to improve its profitability, the competitive position in the market and respond to changes in the market. Against this backdrop, ProSiebenSat.1 Group had already responded to the decline in revenues last year this cost adjustment and measures to increase efficiency and continued its measures in 2024. Now let me continue with comments on the financial leverage and our net debt development on Page 10 of our presentation. At the end of the second quarter, the group's net financial debt amounted to EUR 1.595 billion, which represents an improvement of EUR 187 million compared to the end of Q2 of last year. This is mainly due to the positive development of adjusted EBITDA as well as cash and cash equivalents. The change compared to the end of the year reflects the difficult seasonality and the group's cash flow development. As you know, our fourth quarter is usually the strongest quarter. Due to the growth in adjusted EBITDA, the financial leverage ratio improved to 2.6x at the end of the second quarter and is therefore at the low end of the targeted range of 2.5 to 3x for the financial year 2024. On the right side of this chart, you can see the debt maturity profile of ProSiebenSat.1. As it shows, we use various debt financing instruments for the purpose of the group financing. This group financing is on a continuous basis under our review with respect to the optimization of volumes and maturities. In this context, in April 2024, we extended the majority. This means EUR 353 million of the term loan tranche of the syndicated loan, which previously matured in April 2026 by a further year until April 2027. The remaining part of this term loan tranche of EUR 47 million remains due in April 2026. So with this, I would like to end my part of the presentation and hand back to Bert, who will give you some more insights about the operations of all of our 3 segments. Bert? It's up to you again.

Thank you, Martin. I'm now happy to provide an overview of our operational progress. Let us start with the advertising and audience market. As expected, the European Soccer Championship in June had a noticeable impact on our entertainment advertising DACH revenues. In June, during the event, we recorded a mid-single-digit percentage decline compared to the previous year. However, when looking at the average of the first 5 months of the year, from January to May, we observed a mid-single-digit percentage increase. This positive trend is also evident in the audience market. Here, both full day and primetime audience shares were higher on average in the first 5 months than in June of this year during the European Soccer Championship. Let me now take a look at the macroeconomic environment and the development of the advertising market in Germany, which are of particular importance for us as a cyclical company. When looking at market conditions, we can see that the recovery of the German industry has so far been delayed. There has been limited momentum from private consumption. However, we are hopeful that the conditions will improve in the coming months, which should positively impact our advertising business. For the full year 2024, leading economists expect a noticeable upturn in consumer momentum between 0.3% and 0.7% in the light of the improved framework conditions. As an advertising-dependent company, private consumption is particularly relevant for our business development. The German ad market is expected to grow by approximately 5% compared to last year. The forecast for the linear TV ad market is for growth of 2%. In comparison, the digital ad market is expected to grow dynamically with plus 13% compared to the prior year. Even taking into account the subdued macroeconomic development in the first half of the year, these advertising forecast underpin our targets for both TV advertising revenues and Digital & Smart advertising revenues for the year as a whole. The heart of our strategy and the center of our digital activities is our streaming platform, Joyn. I'm very pleased to say that we have once again experienced significant growth in all our key performance indicators in the second quarter. Monthly video users have increased by 56% compared to the previous year, reaching 7.05 million users. Video view time in minutes grew by 38% to 9.8 billion minutes. Our advertising-based video-on-demand revenues saw an increase of 25% compared to the previous year. Looking ahead, we are therefore fully committed to expanding Joyn, and we are actively working on accelerating its growth. Overall, the strong growth of Joyn shows that we are on the right track. And we are speeding up. We will establish Joyn as the free super streamer and leading entertainment platform for everyone in the German-speaking countries. We position Joyn as the perfect partner for our advertisers and media agencies to enhance their advertising offerings. To achieve this, we are investing in content, in product and technology. At the same time, we have recently concluded strategic distribution partnerships with Sky and Deutsche Telekom. And we have launched Joyn in Switzerland, so now we are present in the entire DACH region. These are important steps towards expanding our reach and exactly the direction that we want to be heading in. But above all, it's all about content. Our content is what sets us apart. We captivate our viewers with engaging live and local formats. This leads to increasing video views on Joyn. Let me give you a few examples highlighting the success of our strategy. Germany's Next Topmodel increased its market share by 0.3 percentage points to an average of 19.9% compared to its prior season. The show also witnessed a remarkable surge in video views on Joyn with a 30% increase. On the other hand, the [indiscernible], which is a daily format with multiple episodes, increased its slot average by 0.8 percentage points. This show also experienced an increase of over 50% in video views on Joyn compared to the previous season. The production for season 3 will already start this year. We also implemented new formats like [indiscernible], [ The Floor ] and [indiscernible] in the first half of the year, which all led to an increase in video views. For the second half of the year, we have a range of exciting new formats plans. These all align with our program strategy, to continuously enhance and integrate our local and live content. And this also applies to our linear TV offerings. Through this strategy, we are able to create captivating talk of the time moments. A great example of this is the 24-hour show with [indiscernible] that was aired on April 21. Here, we once again proved that these moments still exist and have the potential to break records. On that day, we achieved the highest market share on ProSieben since November 2020 with an average of 17.3% share. This success showcases our strategy of focusing on local and live content. And the best is that we tested a new format on the day with great success, so our viewers can watch a new format and [indiscernible] in the winter season of 2024 and 2025. Our goal is to inspire our viewers with local, relevant live content and to differentiate ourselves from the competition. To expand our reach, we leverage advanced distribution technologies and strategic partnerships, offering a high-definition quality content enhances the viewing experience across all platforms, making it truly special. Advancements in HD penetration drives growth across all our platforms. Since May 2012, HD free-to-air distribution has grown by 18%, now reaching 13.5 million subscribers in Germany. Also through the integration of Joyn on Sky, we are able to reach a large population of premium pay TV and streaming households in Germany. By increasing the availability of Joyn and expanding our program reach, it all allows us to better cater to different media consumption profiles. This progress brings us closer to our goal of making Joyn the leading free entertainment platform in the DACH region. At the same time, our distribution efforts help diversify our revenue streams. These provide a more stable and sustainable income source independent of advertising market situations. Let us move on to Commerce & Ventures. As mentioned before, Commerce & Ventures has continued its growth path. As the multiyear overview shows, our comparison portal, Verivox, and our online beauty provider, Flaconi, have shown a significant CAGR growth of 7% and 19% over the last 4.5 years. Since 2023, Verivox has benefited from the recovery in the energy markets and the introduction of new products across various business units. Verivox is, therefore, resuming to its growth trajectory. Flaconi was the key revenue driver in the Commerce & Ventures segment. Its strong operational performance in the second quarter led to market share gains in Germany. As a result, both companies also achieved record revenues on the basis of the last 12 months. We are very satisfied with these developments. Of course, we are actively managing our portfolio to achieve synergies within the group. But we also want to unlock the value of investments like Verivox and Flaconi, and this means that if a company no longer significantly benefits from the synergies within our group and our reach. It is part of our strategy to divest these well-established brands to a more suitable owner. As we have already communicated ahead of our AGM, we have launched a process to evaluate potential future disposals for both companies. This process is on track. Looking at the advertising business of Commerce & Ventures, SevenVentures and SevenGrowth, we see that both recorded a double-digit percentage growth in the second quarter. Overall, Commerce & Ventures advertising revenues increased by 46%. The increase in revenue growth at SevenVentures was due to an overall increasing media demand from existing partners. The increase in revenue growth at 7% growth on the other hand was driven by both marktguru and weather.com. The growth at marktguru was mainly fueled by higher TV bookings from major customers. The growth at weather.com was driven by improved user experience, SEO optimization and expanding into international markets. We are pleased to see that the advertising business within SevenVentures and SevenGrowth is performing strongly and strengthening our core business. Let us now have a look at the Dating & Video segment. Here, we observed a decline in dating business revenues in the second quarter compared to the previous year. This was primarily due to ongoing consumer constraints and increased competition in the U.S. market, especially affecting eharmony. Nevertheless, during the second quarter, European dating apps have successfully narrowed the previous gap in terms of acquiring new customers, matching their new intake levels of the previous year. In the meanwhile, our strategic shift towards live streaming on our owned and operated apps is starting to pay off. In the second quarter, revenues were up 11% year-on-year. This growth was particularly driven by a significant number of streamers transitioning from our competitors' platforms to our own apps. At ParshipMeet Group, the adjusted EBITDA was below prior year's level. Nevertheless, we reacted to this through our cost and efficiency measures. This helped offset the decline in revenue, which led to an adjusted EBITDA margin of over 15% in the first half of 2024. Now let's have a look at the remainder of the year. All in all, we are confident that we will achieve our full year 2024 targets. This is thanks to the successful implementation of our strategy and supportive assumptions for the second half of the year. Let me specify this. In the Entertainment segment, we continue to expect a slight growth in the DACH advertising revenue, primarily driven by Joyn. Here, we anticipate a slight decline in advertising revenues in the DACH region in July and August, partly due to the Summer Olympics and a better performance starting in September. In the Commerce & Ventures segment, we anticipate ongoing growth in revenues and earnings at the key portfolio companies. Our SevenVentures business has also started to recover after experiencing a significant decline last year. Besides this, the focus on value crystallization of our noncore assets has already started. In the Dating & Video segment, we are actively managing our costs and efficiency measures. We anticipate a less negative development in this segment, especially in the DACH region. Overall, we will continue to focus on an efficient cost structure in every segment and on holding level. On Jochen Schweizer mydays, the Munich public prosecutor has in the meanwhile, turns the previous monitoring process into a formal investigation with regard to reported facts and has announced that it intends to impose fines on individual group companies. On the basis of the discussions held to date with the public prosecutor, a provision in the low single-digit million euro range was recognized at June 30, 2024, for these impending charges. Having said all this, we are confirming our financial outlook for the full year. This means that we will continue to aim for group revenues of around EUR 3.95 billion with a variance of plus/minus EUR 150 million. Regarding the adjusted EBITDA, we maintain our target of around EUR 575 million with a variance of plus/minus EUR 50 million, therefore, averaging at the level of the previous year. Please note, in the last 12 months, group revenues amounted to EUR 3.942 billion and an adjusted EBITDA of EUR 608 million. Even though the earnings trend is currently visibly above the midpoint of our financial outlook, we would like to ask you to be remind that the already announced increase in programming costs will be stronger in the second half of the year, while savings from last year's cost program will be less pronounced in the fourth quarter. Due to this particular seasonality, a decline in adjusted EBITDA is possible in the second half of the year. This will certainly also depend on the development of the advertising revenues. It goes without saying that we do not want to exhaust this buffer, but we'll work hard to continue the positive earnings trend of the first half. Ladies and gentlemen, to sum it up, we are satisfied with our business performance in the first half of the year. The strong growth of Joyn, in particular, shows that we are on the right track. We are establishing Joyn as the leading super streamer that is free for everyone in the German-speaking region. We have and will continue to take important steps towards expanding our reach in the second half of 2024 with our channel portfolio and Joyn. And ultimately, we are fully in line with our expectations and are on track to achieve our financial targets for the full year. Thank you for your attention, and we are looking forward to your questions.

[Operator Instructions] We'll take our first question Julien Roch from Barclays.

I'll start with Q3 trends. You said that July and August were still impacted by the EURO and the Olympics. So could we assume that July and August are in line with June? And do you have any early visibility on September? That's my first question. The second one is on free cash flow, minus 30% in the -- minus EUR 30 million in the first half, which is a strong improvement versus [ EUR 162 millon ] last year. So at EUR 575 million of EBITDA, what level of free cash flow do you expect to generate this year? I know you guide on adjusted operating cash flow, but investors focus on free cash flow with that adjustment. And lastly, my usual question, you gave us Joyn viewing minutes, 9.8 billion in the first half. Can we get total minutes across all your content in linear and on-demand, please?

Thank you, Julien, for your questions. Let me pick up the first and the third one, and then Martin will elaborate on the free cash flow question. Advertising market trends and visibility. Like I stated in my script, we see a slight decline of our total revenues -- advertising revenues in Q4 in the month of July and August. And we expect a further recovery in September. Visibility is just 1 week before we have strong visibility on September. But given the underlying contracts for the second half and our discussions with the agencies, we are confident of a further recovery in September and onwards to the year. So that means that for Q3 guidance in total, we expect total revenue base in the advertising DACH region to be slightly up. On the Joyn and total revenues, I think that is a metric that I think we will be happy to look into and provide separately after this call, to the extent possible. And with regard to free cash flow, Martin, maybe you can give in some main elements that are influencing the swings in the first half and the outlook for the full year.

Thanks, Bert. I think from the free cash flow perspective, you have to keep in mind that we already communicated by the end of the last year that we have these restructuring cost in effect of the restructuring program, which was impacted the last year results only on the EBITDA perspective, but that cash out would be generated or would we go out in this year, and this was roughly EUR 50 million in the first half. And this is affecting clearly our free cash flow at the moment. But this is a onetime effect and will not be coming again in the next months and next year. And if you -- and you also said that if you look at our free cash flow and our numbers, especially also from the net debt perspective, we are quite happy about the development. And what we also always said in our talks with analysts and with investors that we have also more onetime effect on the cash flow, which is related to our campus building in this year and also with respect to the onerous contract for the provisions we built last year, where we already reflected this in the balance sheet perspective. But on the free cash flow perspective, there will be also in this year and the next year. More free -- cash-outs from this concept, which we impaired but which we still have to pay for it, and this was roughly EUR 40 million in this year.

Thank you. And maybe, Julien, on your third question. Normally, in our Joyn viewing minutes, we see an average of around about 45% of linear viewing in the total viewing minutes, but we will be happy to provide you a more precise number after the call on this. Thank you.

Our next question, Annick Maas from Bernstein.

So you said on a full year basis, the agencies are expecting the TV advertising market to grow 2% in Germany. By how much is ProSieben going to outperform this? My second one is on Verivox and Flaconi. If you could give us an update on where we stand on potential monetization? And then just on the dating business. You said now that in the European side, you've seen a stabilization in terms of new customer intake. What does that mean actually in terms of revenues for the European dating business? Is it still declining? Or are we seeing now a stabilization of revenues as well in Europe?

Thank you for your questions, Annick. Happy to look into the questions that you raised. The outlook and the midpoint of our guidance is indeed based on 2% advertising market growth for the full year. You've also seen that in the first 6 months that we have 3% of advertising market growth for our total business, which assumes that for the second half, we have a quite prudent approach versus our last year developments. It will, as you know, much of the advertising income will depend on the last 4 years -- of the last 4 months of the year, as always is the case in our market that is very much dependent on the Q4 performance. And as a matter of fact, it's difficult to guide that at the very beginning of the summer break. So happy to be more concrete on that in the third quarter and give more guidance to the bookings pattern itself. But it's fair to say that if the recovery that we have seen in the first half of the year continues in the second half, then we should probably be ending up above the 2.2% midpoint guidance that we have right now. Verivox and Flaconi. Please be reminded, it's difficult to give precise guidance on the process. While we are in the middle of this, we indicated at the very beginning of the year that we have mandated investment banks for the sales process. And we are working with the M&A team and the finance team very diligently on this process. We are on track, as I stated in my update on this part. But in terms of interest, number of buyers and valuation ranges, it's fair to say that we cannot comment on this right now. And with regards to ParshipMeet Group and the European activities, it's fair to say that we see a stabilization of the European dating labels and brands that we have there. We are looking into how we can reposition ParshipMeet Group on a growth trajectory, both in revenues and earnings potential. And we are slightly more positive on a resumed growth trajectory of our European dating assets in the second half of the year. But it's also fair to say that on the American activities, especially with eharmony, we can expect a [ consolidation ] of a decline in the second half as well.

Our next question, Adrian de Saint Hilaire from BofA.

Yes. A few questions, please. So you highlighted that Q2 was impacted by the EURO. But I believe that when you guided us on Q2, you talked about a continuation from Q1, which was about 5% and obviously, we knew about the EURO. So I'm just wondering if there is some softening in the underlying ad market in June, July? Or is it just that the market share shift was perhaps stronger than what you anticipated? And then on Verivox and Flaconi, thanks for the disclosure on revenue. Could we have some sense on what you expect broadly in terms of profitability for those 2 assets? Either if you want to comment on H1 or what you would expect for the full year because it appears that Verivox has very strong revenue growth. I'm just curious on how that translates on to EBITDA for the business and whether or not Flaconi is now actually more than breakeven.

Thank you for your questions. Guidance on the ad market. It is true that we guided the market on Q2 with mid single-digit growth for the ad market, which turned out to be 1% in the actuals. So therefore, especially in the month of June, during the event, we had a firmer decline due to the European soccer event versus our initial estimates. Bear in mind that if we add the advertising business from weather.com and marktguru into the advertising business, which is currently reported, as you can see in the Commerce & Ventures segment. If we were to add that advertising business into our advertising income statement. On the Entertainment part, we would still experience growth of 3% in the second quarter of this year. So that is the more precise update on the second quarter. On Verivox and Flaconi, I've basically already been vocal on the sales process. We only guide on profitable -- revenue level and not on profitability level. But it's fair to say that we are also seeing that the increased revenue development is being accompanied with a continuation of a significant improvement of EBITDA and free cash flow development as well.

Our next question, Nizla Naizer from Deutsche Bank.

Two questions from my end. The first, I think, is linked to the previous question, which is how much visibility do you typically have in terms of how much in advance your advertising is booked these days? Has this changed over the last year? Could you kind of remind us what the setup is like, that would be great. And secondly, the content spending stepping up in Q4. Could you remind us again what would drive this? Where is this spending going into? And where would the benefit of this [ path ] in content spend can be seen? Some color there would be great.

Yes. Thank you for your questions. It is indeed that feasibility has shortened over the last couple of years on the advertising bookings. So to give you a full perspective on this. By next Friday, we will have initial insights on the September bookings and provide with more concrete guidance on how September bookings would look like. This is slightly being delayed also due to the summer vacation of many of the agencies, which normally tends to come a little bit earlier. But that means that visibility based on September bookings concretely is still very limited. In our forecasting, we also base ourselves on the contract development, both on advertising and agency level. And on that part, we see a slight positive development on the volume base that has been contracted so far and the outlook and discussions that we have with agencies. So that gives us further confidence for reconfirming the outlook, as we have done. On content spending in Q4, just as we indicated at the beginning of this year that we would increase our content spend versus last year of EUR 80 million. EUR 50 million will come in the second half of this year and with a pronounced increase also in Q4, given the fact that we expect most of our revenues and our performance measure to be relevant in that period of the year. We will continue to invest significant into the access primetime of [ Saturn's ] with an additional telenovela at the time slots from 5:00 to 8:00. Like we have currently, [ Landos Paxis ], we will have an additional telenovela, which I think should boost the performance of [ Saturn's ]. But as we all know, daily telenovelas can have a very positive impact on Joyn viewer behavior as well. And that kind of demonstrates on how we want to invest in our content grid going forward. Ideally, every euro increased content spend should pay into the channel strategy and to our streaming platform, which is also the direction of many of the other commissionings that we are committing to. Besides that, we are increasing our new -- a couple of new formats on ProSieben, and we have additional lineup of comedies for Joyn as original versions to further increase the reach offering, but also make sure that our asphalt layers remains at a very high level where we are today.

[Operator Instructions] It appears there are no further questions at this time. Mr. Dirk Voigtländer, I would like to turn the conference back to you for any additional or closing remarks.

Yes. Thank you, operator. Ladies and gentlemen, this was the last question for today's call. My colleagues in the Investor Relations team and myself will always be available for any follow-up questions you might have. Thanks, everyone, and goodbye.

This concludes today's call. Thank you for your participation. You may now disconnect.