ProSiebenSat.1 Media SE ($PSM)

A very warm welcome from my side to our annual press conference from ProSiebenSat. I welcome next to me our CEO, Marco Jordani; and our CFO, Bob Rajan. Great that you're here. Today, to give you a quick overview, I think that's pretty logic that we will go through the year results of 2025 and then give a strategic direction for the future and also the outlook. And for us, it's really important that we also have time for your Q&A session. As you hear me speak English, I think it's obvious that today, we will do everything in English just to make sure that everyone has the same language. For all the journalists at the Q&A session, you can ask your questions in English or in German. I can translate, that is no problem. And yes, maybe just one other thing. We will record the annual press conference and put it on our website then more or less in the afternoon. So with this said, I hand over to Marco. Let's get started.

Thank you, Stefanie, and thank you to all that are attending to the press conference. Thank you for taking the time. As Stefanie said, we are going to, let's say, present to you a little bit of what happened in 2025, even if, as you know, we joined late October. So clearly, a big part of the year has been, let's say, not under our control. And then we will dedicate more time about what we are currently doing and where we are going. As far as a sort of a brief summary of what we are going to see, Bob will take you through the main financial highlights of the 2025 results. But in 2 words, we were just hitting the guidance we gave out in January. So nothing has been really different from what we forecasted from that time. What I would like to underline is that already in 2025, in the last part of 2025, we clearly focus ourselves on changing the company. The main changes were clearly appointing the new CEO for XO, so the sales house. Clearly, the future of ProSiebenSat.1 will rely a lot on growth and revenue. So that was the first action we undertook. Then secondly, we clearly create structure and action in order to build a strong cash discipline. Bob will take you through that in a minute. And lastly, we try to set the company organization in a way that the future will allow us to grow to create value. Having said that, I think the remaining part of my presentation will be after Bob presentation, and I will dedicate myself to you and to your question, trying to answer to where ProSiebenSat.1 is going to and where the growth will come from. I just hand over to Bob. Thank you for that.

Great. Thank you very much, Marco. It's my first press call, so obviously excited to be on the stage here with Marco and Stephanie. I also joined, as Marco said, at the end of October. And so we'll walk you through some of the highlights from FY '25. As you can see and Marco alluded to, revenue on an absolute basis was slightly under in comparison to FY '24, 6% but taking into account portfolio effects and currency effects, minus 2%. Now a lot has been made in the press, not only from us, but from the -- an industry trend with regards to group advertising. We'll talk a little bit about that in a couple of minutes. But you'll see that advertising in general, there was a downward trend. This was even exaggerated a little bit more in the fourth quarter, as you can see, minus 10% comparing the fourth quarter of 2025 to the fourth quarter of 2024 and 8% on a full year basis. Adjusted EBITDA, as Marco said, was in line with what we had already provided, the EUR 403 million. This is down, obviously, from the prior year, as you can see. And in quarter 4, there was a little bit of a pronounced impact once again because of the advertising market and the challenges that it was posing upon ProSiebenSat.1 and other players as well. Adjusted operating free cash flow had the same trend, as you can see. Adjusted net income, the drop was not as drastic as the others due to a couple of tax effects that we were able to work as a positive benefit. Before I move on, just as an overall statement, when you look at the overall conglomerate of ProSiebenSat.1 approximately 2/3 of the revenue relates to entertainment. The other 1/3 relates to non-entertainment or what we will refer to as commerce and dating. So going forward in 2026, we will have 2 segments, the Entertainment segment and then the Commerce and Dating segment. So if we just move to the next slide, I'll talk a little bit about the overall climate that we see ourselves in and how that is affecting us going forward. If we look at the left-hand side of the chart here, we will see that there is obviously, there's been some pressure on GDP, not only in Germany, quite a bit in Germany, but across Europe.If you take that into account, looking at GDP growth the last couple of years, which has been effectively flat or slightly above, the same trend is occurring in the first half if we read all the economic reports for 2026 with a potential slight uptick in the second half of 2026. Unfortunately, that is compounded by a number of effects such as the Ukraine war, which is ongoing. Some of the challenges that are ongoing in the Middle East, which are driving up, obviously, oil prices and whatnot. And also the geopolitical climate, I think we would all agree, is not as stable and is quite volatile at the moment. So putting that all together provides a challenging perspective for the short term, maybe the medium term. If we look at the right-hand side, this is what we already referred to earlier in the previous slide. The graph here has been indexed to 2019, looking at the advertising market. Obviously, a negative trend for the past 2 to 3 years that has been occurring. But if you look at the last in 2025, you'll see that 18 percentage point delta, which is quite significant. So there is, I would say, challenging investment appetite in the market. And once again, it's an industry trend that we are all going through. However, we've taken a lot of protocols and whatnot here since Marco and I have come on board with the whole leadership team. There's a lot of cash discipline, there's cost discipline. We've been figuring out how we can make sure that we take proper funds to be able to invest into investments that make sense for us going forward in 2026. So there's a number of things that have come into place. And while the challenges will still exist I think we're well positioned to be able to address those challenges that may come about. One thing I talked about is we have the entertainment sector. And then obviously, we have what we're referring to is the commerce and dating segment. But all of you would have noticed in 2025 that there were a number of M&A transactions that the company -- that ProSiebenSat.1 was part of. For these trends -- or 3 of these transactions that we have labeled here where before Marco and I were on board, Verivox, which has been very much detailed in the press as long as -- along with the other 2 transactions. Since we've been on board, you would have seen in February the vectr.com transaction was closed. Last week, you would have seen or you would have heard -- read about a signing with regards to Kairion and Eson where we were able to engage in a successful transaction for that -- those 2 businesses and the transaction is expected to close in April 2026. This morning, you would have hopefully also seen a press release that came out earlier this morning that we were able to engage in the transaction to divest Fluid and camper days, and that transaction will close in April 2026. Looking at all of these transactions, they've generated circa about EUR 300 million in proceeds. And I'll come I'll come back to a couple of priorities that we're looking when we try to generate proceeds. But let me just clarify a little bit about the M&A activity that's been going on recently, and Marco will also allude to this as well. We have no script or anything about how we're looking at divesting businesses as quickly as possible as soon as possible. We look to extract the value out of our conglomerate out of our portfolio companies. And as long as we can continue and we believe that there is value to come to ProSiebenSat.1 and obviously, its shareholders, continue to work with these portfolio companies, work with these management teams to do that. When we get to a point where we believe that we have optimized the value for what we can do, then we will start to engage or look into potential M&A transactions with potential parties that may have an interest in such assets. So with the proceeds that we've got here, what we're trying to do is use these proceeds, not only Marco alluded to at the beginning to try to deleverage, okay? That's very important for us, but also look at taking these funds and investing them appropriately. And when it comes to entertainment, if there's things that we can do with regards to content and whatnot and increase our reach, we will end up using those proceeds for that. The next slide just continues on with that theme of using proceeds that we've had to try to deleverage the company. On the left-hand side, you can see that since 2019, overall debt has reduced by close to EUR 1 billion, EUR 902 million to be specific. At the same time, ProSiebenSat.1 has worked hard to reward its shareholders with $326 million in dividends since 2019. That trend is something that we want to continue to do going forward as we transform ProSiebenSat.1. On the right-hand side, just a quick snapshot on our debt maturity profile. Most of you would have read in Q3 of last year, actually, when Marco and I sort of came on board, ProSiebenSat.1 in engaged into a refinancing transaction. A couple of things that were key to this. One is the overall quantum of debt has been already reduced slightly. And that was intentional because we wanted to make sure we optimize and use leverage appropriately. As you will see from the debt maturity profile there, we have a 5-year term loan expiring in 2030. We have an RCF that also expires in 2030 that is undrawn in the amount of EUR 400 million. And we have a bridge facility that was for 12 months with a 12-month extension and you can see that the term loan, we're trying to put regular amortizations in there every 6 months of EUR 70 million. There are covenants attached to this refinancing package. Marco will speak towards that towards the end but this is a refinancing package that allows us flexibility and the ability to use our funds appropriately for investment and to be able to, hopefully, with transactions or generating excess cash flow to pay down our outstanding debt. The last thing I'd like to talk about, obviously, is with regards to our dividend proposal that we will propose at the AGM at the end of May of this year. obviously, making a dividend, you have to take into account the economic situation, the performance of the company and various other factors. This is in line obviously with last year's dividend where it was $0.05, we will propose at the AGM this year proposed dividend per share also of $0.05. And with that, that sort of concludes my presentation here on the financial numbers. I will pass it back to Marco to take us through the next section.

Thank you, Bob. I think now we can come back to the presentation and just leave a little bit the past and looking at the future. I will start, let's say, to address the point where are we going? I mean something has already been said. But the reality is that we are certainly leaving the concept of a diversified group. We were pursuing till last year, and we are much more focusing on media and media powerhouse. Clearly, our intention is to become the leading entertainment player in the DACH region. And certainly, we will be helped in that journey by the fact that we are part of a larger group. Clearly, MFE, we consider MFE power size as a sort of multiplier of our strategy. That's all clearly based on a pretty strong financial discipline because we need to invest, we need to grow. But clearly, that has to be managed and done in the right way. Having said that, I will try to take you through, let's say, our 5 priority. We are every day currently managing. Starting from content, clearly, that's the first and the most important element in our day life without content, clearly, it's hard to make media. And so that's where we stand and where we're focusing. We will go through a different way of approaching multiplatform distribution. I will try to take you through in the following pages. Clearly, monetization, it's another area where we think we have a different speed than in the past because we need a right monetization, monetization that is more aligned with the present trends in the advertising market. We will talk a little bit about Tech and AI. As you can imagine, these are topics that you cannot keep in these days. And then, as I said, we will try to give you a little bit of outlook regarding 2026 and, let's say, always focus on cash discipline and cash flow attention. Let's start with content ease. This is a slide that clearly is not giving you anything more than you know already, but it's important to underline the fact that we are targeting very high premium quality brand. and very popular, let's say, brand. That's part of our main strategy. Clearly, a lot of brands are already in that area. We will talk about that, but some other will come. And the investment we were mentioning before will be targeted to that. We need to have strong brand, popular brand, engaging brand, we need to differentiate ourselves from, let's say, the cold content that typically the platform are just, let's say, showing and delivering to our viewership. Another point I would like to underline this on the right-hand side of the chart, we are not really forgetting the fact that we are coming from a tradition and a culture of linear TV content that are probably more addressed to more adult viewership, but we need to address also the fact that our young target audience require a different kind of sorry telling a different kind of version our content. And so we will take care of us also about that because that's our aim to be very large, very popular in addressing all the target group. What I just said, it is a little bit explained here. yes, you have just clearly a lot of numbers, but I mean I'm trying to give you the view on that. We have many brands that are very popular but they are not very popular only on linear TV. They are also very popular on other platforms that are a little bit different from the linear TV channel we are used to. I'm certainly talking about joint that is our owned and operated OTT platform through different business model being Abbott or SVOD. But I'm also talking about -- and I'm referring to the right-hand side of the chart to platform that are not owned and operated by us, but they are very popular for the target we were mentioning before. This platform can be called YouTube or TikTok or whatever you want to see it. And as you can see, we are already able to drive a lot of consumption in this platform. And this is also a good way to promote, engage and make the brand growing also in target age where, frankly, we are not so strong in our linear TV kind of offer. One that we have generated good brands and popular brands, then it's up to us to make these brands working only -- not only on TV and on JOYN on our owned and operated platform but also somewhere else. In Galileo, it's probably the best example of what we are targeting. Galileo started as a very popular TV shows as you know, then we move it through the digital platform that we operate, so join with different business model funded by advertising or subscription based, let's say, business model. And that's a little bit normal and pretty ordinary. We're just putting our content in a different platform, then we move a little bit away from that being very successful on out. As you can see here, Galileo as more than 3.3 million subscribers on YouTube. Again, this is the example of the popularity of the brand, the way in which the brand is engaging target gauge and the way also we can monetize people that are not watching TV anymore, just because I mean, they have different habits and they are simply younger and more technological oriented. But having said that, we cannot forget about all the other platform that is surrounding us let's call them social media in a very broad way. These are a platform where we are present strongly and where we need to be present, not only for promotion, but also to remind the people that they can find content also somewhere else. Then there is, let's say, a formal way of, let's say, exploiting the brand, that is the licensing, the gain, the printing and events that are also very important to make all the system profitable and being able to push forward with new investment. I mentioned before the multi-platform. Again, that's probably a little bit new in the sense that clearly, the media world is changing and the big change came from the fact that the U.S. giant or new platform came on the market and changing not only the [indiscernible] EBIT, but also a little bit the business model. we are going to leave the linear only kind of priority. We are approaching this new world in a multichannel way. And saying that, we are also changing a little bit. Our main objective has been as publisher. We are not really targeting the linear TV audience share. We are not targeting what the content is performing, how the content is performing on Joyn. We are looking in a more 360-degree way how we are able to generate global video reach. We are a little bit neutral on where the people is watching our content, a little bit in the sense that then, I mean, we have also to look at how the profitability of the different channel are. But I mean, in principle, we are more targeting the fact that our content has to be watched more and more every day. And that's -- it's important because it's giving us our content, the possibilities to be popular, to engage and to be reminded in the viewers house. And that slide is also representing the fact that starting from the left bottom side, clearly, linear channel are important will be important because these are unique element in our offer. But clearly, we know that the TV consumption is declining, probably will decline. But in any case, our content needs to be popular starting from linear TV and then this popularity should be also transferred on what we have said before, are our own and operated distribution channel, digital distribution channels that are listed there, clearly Joyn is the most popular and most famous one, but I mean there are others. That is giving us the possibility to not lose the people that is not watching TV anymore, we take, let's say, our content where the people are willing to watch and that's clearly the biggest part of our objective. It was also in the past. But then we move away a little bit from our own channel, and we go in other channels let's say, exploitation. The first one is clearly the partners one. You see the brand there. These are partners that are helping us in take our content to the viewer. And then moving a little bit away from the heart of our business, such a network I mentioned in it and also international SME platform. On the right-hand side of the slide, you have some number. These are our let's say, polar star numbers going forward, what has been defined as total video reach numbers. And these are the 2025 average number we got last year. So we are talking about a percentage of population, this means that 77% of the German population watched our content last year. And in terms of converting the percentage number, we are talking about 61 million people. Again, this is an important number because that number is currently larger than the YouTube or the U.S. platform numbers. That's a value that in our opinion, we will try to keep that advantage we will try to keep and possibly even enlarging it. And why that's important because this is clearly giving us the possibility to monetize better our reach. Clearly, we are a little bit weaker if we monetize our linear TV channel only because everybody, all the advertiser will know that the linear consumption is declining. So it's a way to sell an asset that frankly is not so requested by the market. While reach, it's a unique and scarce resources on the advertising market. Advertising needs reach and we are providing reach. You have numbers there that shows how strong is our multichannel approach and now important will be for our sales house, 7.1 Media in the moment in which they meet customer and media agencies selling a value and a product that is not so available on the market. So in a few words, we are moving away from spot-based TV advertising to a total reach monetization. And that's the key point of our strategy, building good content, distributing in the best and most efficient way the content and then monetize them. I mentioned before about, let's say, the role of MFE in all of that. I mean let's start to say that we are 100% focused on where we are alone. And on the left-hand side of the chart, you see where we think we can really be better than anybody else. And it's clearly all the strong client relationship, the German and the DACH client relationship. We know them better than anybody else. We certainly have a proven DACH expertise in terms of, let's say, market-specific, content-specific and we are -- or, let's say, our sales house organization, so 7.1 Media organization is certainly well reputated in terms of reliable and high-quality campaign delivery. And again, we know the customer probably better than anybody else because we are working in our market. Then moving to the right-hand part of the chart, you see a little bit of the translation of what multiplier means in our terms. Clearly, we know that the market is going to be more and more European. There are many multinationals that are focusing advertising investment in one place in Europe. So it is clearly important to be there together with our, let's say, parent or an even a sister company to present, let's say, a total European possibility in terms of campaign format, KPIs, prices. That's in our opinion, a way to avoid to lose customer because if you have a customer that is centralized, presenting a regional offer, is not only weak. I mean it means also that you can lose the customer because you are not offering what they are looking for. So that's the multiplication that being part of a larger group can help us in being more performing, more effective and being also a little bit more modern in terms of customer perception. And as far as I can say, this is something that is very well appreciated by media agency and customer because they see an answer to their request that probably local media cannot offer. And that's technique also to another very important element of the future that is Tech & AI. I think, I mean, you cannot talk about anything today without talking about Tech & AI, and I want to share with you we are now structured and what we think it will be the best approach to take that issue. Clearly, we will try to be as much as possible cutting edge in the technology and to do that, frankly, size matter. I mean no one can really be good if they invest less or if they are just in one country. And so being part in a larger group can help us, for instance, in a tech infrastructure to be -- to spend more on a global way by sharing the cost because clearly, nobody can afford a big investment if they can only fund it in a local way. So AdTech infrastructure will be unified that eliminate redundancy and that will all pass in being more ready to meet the customer needs. Data and analytics, again, this is a size game, you can understand easily that the more data you have, the better you are, the more you can be, let's say, performing in analytics, the better you are, and again, sharing efforts sharing investment. It's also giving us the possibility to be better, both in terms of data and analytics. OTT infrastructure. Again, we are talking about something that people is not appreciating. So nobody will choose Netflix [indiscernible] RTLs just because one platform is technologically better than the other. Content are much more important. There, we need to be let's say, on the same level than the other at spending less. And so again, we are targeting a structure of an infrastructure where we can share costs and being best a bit better in performing and better in executing and better in providing experience to our viewers. Procurement, that's a little bit more easy to understand. Clearly, you can understand that, let's say, combining volume, you can get better pricing and better negotiation power. So in all these areas, so the share cost will impact in terms of economy of scale faster market rollout and certainly more modern, let's say, approach versus a market that is going to be more and more Pan-European. What will remain localized by definition, programming and content, nobody knows how to produce German content better than us. We will go on. Our people taking care about that are great. Our, let's say, performance, it's everywhere, let's say, and we can really go on in pushing with local, let's say, strong format local diversity and local also peculiarity, all related to creative development. So new format, new format for targeted audience like the young has to be very localized because everything is related to custom habits and peculiarity that are local. And so we cannot really, let's say, negotiate on that. We will be very local in that respect. The cultural position I already said that we think that the world will be polarized by -- in 2 main categories: the international content and very local one. We are playing the local game. So the cultural position will be crucial because if you are not close to your view, we ship, then your popularity can go away. So we will be different from the platform. We will be more and more local and we will be more and more live and we will be more and more closer to our views. And again, as far as the German or DACH advertising relationship, that's clearly something we need to keep it localized because that's the way in which the market is acting. That's probably a slide that will help also to answer to some of the questions that you may have, and you can also ask afterwards. Bob explained what we have done with the -- what we call the noncore asset. Right after the moment we joined, we immediately start reviewing all the portfolio of companies proceed and a times was running. And immediately, we allocated them to what is our focus, so entertainment and what is not. So here, we are talking about what has nothing to do with entertainment. And in that respect, I mean, all the decision has been taken in the past and we will be taken in the future is exactly what Bob said. We will look at a specific company. We were looking -- we will look at the performance, the management, the marketing position. And every time we will decide whether it is better to stay to push, to invest, like for Flaconi that it's, in our opinion, a great example of a company that needs to grow, and we can help them to grow, and that will stay in our portfolio of activity also in the future and other companies where, frankly, we cannot add anything else or add anything more. And in that respect, other solution will be taken. In any case, Flaconi is performing very well. Flaconi has an international plan in terms of expansion. We can support it because we are part of a European, let's say, group. And so that's -- it's another element for which an will be part of our portfolio of activity also in the future. And we are sure that in terms of value, we can generate a lot of value out of it. Let's try to summarize a little bit what we are trying to achieve with all I explained to you. As I said, we will go on in investing in content. Without investing in content, clearly, the future will not be so bright. We need to keep going in that direction. The main objective of this investment will not be the linear audience only, but will be the total video reach. That is a little bit different from the past. We are not really, let's say, producing content for Joyn or for Satin or for ProSiebenSat.1. We have, let's say, investing in content because we need to generate a total reach performance, a KPI that is the one that I showed you before. The reason for which we are doing it is because we think that that's the best way to monetize the content. So without having a large total video reach approach. Without that, it's very hard to monetize and to fund the content. So it's crucial to be effective in distributing the content and effectively and promoting the content in effective in, let's say, targeting people that are not watching linear TV anymore, everything done in a way that the financial discipline will take us the resources to go on and invest in. Without forgetting what Bob was saying about deleveraging and dividend because that's part of every company, let's say, objective. Clearly, we need a strong balance sheet, and we need to reward our shareholders. Then let's come to the outlook. I mean, clearly, as you know, we are just out from the analyst investor and analyst presentation and clearly, that's the main chart for them, and I believe it's important also to share with you. Bob already mentioned about the volatility and the uncertainty we are suffering. Clearly, giving an outlook on revenue in these days, it's not easy also because the visibility is very poor, and it is hard to make projections. But having said that, we are in any case, targeting a slight growth in top line. That's important to remind, clearly, that's an outlook that we are providing now. But honestly, we'll be a little bit, let's say, affected but what is going to happen outside our world, but we will manage any kind of scenario we will face. The most important KPI we are targeting is the EBITDA. We are leaving away the adjusted EBITDA kind of KPI. We are looking about the reported EBITDA. That is the only EBITDA we know. And in that respect, we think that there will be a significant increase versus last year, mainly driven by cost efficiency and also by some decision in terms of operating model, I was trying to explain to you. In that respect, I can already anticipate, because I give you also to the financial market, that currently, we are targeting more than EUR 130 million operating cost savings during the year, and that's clearly the result of the cost discipline we were mentioning. So cost discipline is not just a theoretical concept. It's an everyday work. And the result is, as I told you, at least EUR 130 million in the entertainment area of cost savings. In terms of financial debt, we are targeting a similar level of debt than last year while the financial leverage will run from 3x to 3.5x in also coherent with our covenants that was mentioned. Maybe a few words about the first quarter because we are very close to the end of it. I believe you have followed what [indiscernible] said a couple of weeks ago. We clearly shared the view on the market. The market was not really great. But moving to our performance in this market, what we can tell you is that our entertainment revenue in March was declining less than what was in the first 2 months. So as a sort of improving, let's say, market condition and what I can anticipate is that April looks even better, close to last year numbers. And that's, again, a good sign. Clearly, April is not tomorrow. But I mean, at least the first time it's also showing a great, let's say, perception and also forecast. As far as the EBITDA is concerned, first quarter, we will see an increase in it. Clearly, even if we are going to have a weak top line in entertainment, as I mentioned and as Artie said, we will increase our profitability because cost savings are already there. And so that's, I think, the best result we can grant let's say, to our shareholders. Just to close, just summarizing a little bit. It was probably too long, but I think it's important to summarize a little bit again. First point, focus on entertainment, means German-speaking region means strong local content, broad reach and multi-platform approach, maximizing total video reach. We will leave a little bit sector performance and KPI. That's how our polars are. We need to maximize that because through that, we can monetize our content at best. Technology data and AI will be the base of our future. So we will invest and we will also use them to transform the company, to transform ProSiebenSat.1 in a modern company. All what I said a repeating it, portfolio valuation, it's an ongoing, let's say, activity. There is no precooked decision. We are just acting in a very rational way, financially-oriented way, and we will decide what to do every week and every month. And lastly, as I said, nothing can be done without a strong financial discipline. We know that we need to invest. We know that the future it's made by new content, new format, new ideas and without financial discipline, cash control, we cannot afford to do it. So that's what I have to say, Stefanie, so thank you for the time, and thank you also to the team. And I hand over to Stefanie for the Q&A session.

Thank you, Bob. Thank you, Marco, for this. Then let's jump into the Q&A session. Everyone who is in the team's call, but please just raise your hand and ask your question. I think it's always nice if you do it by yourself. If you want to do it in German, I said before, I can easily translate it. That's no problem. And -- or you can just post it into the chat. And with this, I would say let's wait for the first question.

Yes. I have a very short question on one subject. You expect the debt to be stable instead of being reduced, which I would have expected? And why is that? Can you elaborate on that? And is the financial leverage goal of to that has been -- that has been stated in the past. Have you given that up? Or will you return to that?

I can start, and then Marco, please add on. So I think, Ken, you have to take a couple of things into account here with regards to overall, we still have a couple of special projects that drive the cash flow. The big one being our new campus, which has -- so -- you have to take all that into account. The new campus being the large number. And then we have a couple, obviously, still some expenses. We have some consulting spend small, but it's still there and whatnot. If you normalize those types of expenses and cash outs that will come, we would expect our operational cash flow to be at the high double-digit number for 2026. So that's what we're doing. But on an overall basis of free cash flow, it's relatively stable, but driven by a couple of these exceptional items, and that is why our net debt as of right now is looking to be relatively stable for the year 2 naturally, as Marco and I both indicated, where we have opportunities to reduce our leverage, we will do that.

If you can add, Bob, to say that, and I don't want to, let's say, undervalue what we did in the last quarter last year. because clearly, I don't know if you follow, but I mean last quarter, last year, we were very strong in free cash generation. And typically, you can tend to say, okay, that was a one-off. It was not. So in a sense, keeping the same level of debt means also that what we did last year was not just -- sorry to say, window dressing, but was real, so to say. So all the elements that Bob was saying is true. But I mean, please consider also what we did in the last quarter last year, that was already pretty evident, so to say.

That's a great point. Adding to your second question on the leverage ratio. I think what we indicated as guidance there was 3% to 3.5% is what we are hoping for the year. I'm not too sure what happened in the past or whatever, but I mean our guidance is 3% to 3.5%. That will be in line with our current credit documentation. And if you do the numbers, remember now the leverage covenant is also based on an adjusted EBITDA, just to be very clear about that, okay? So it's an adjusted EBITDA over the net indebtedness. But we aim for the 3 to 3.5% and everything that's -- we'll manage everything there to make sure that we maintain that covenant.

The next question is from Klaus Lower from Waters.

I have a question. You were talking about cost discipline and cost cutting. Does that include the job cutting also? Or can you exclude job cutting as the company already had quite some in the latest past? And one portfolio question also. Flaconi, you did mention somewhat. There's still round home and Marco grew. I mean, are those -- is that -- do you consider that core business? Or is that sooner or later also to go out? And you have not mentioned at all, if I can remember correctly, Parship MeatGroup, which is big one somewhat. So do you consider that also core business? Or what do you intend to do with that?

I would take maybe the first part I mean, I think that we need to be more efficient, that I think we all know. And I believe that is also something you well understand being part of the same large media, let's say, sector. So we cannot really surviving just looking at the past. So our objective is to create efficiency everywhere. This doesn't mean that people is not important to us. And I prefer to say that it's better to have the same people that make more than to make the same with less people. So that's what we are targeting. So we are not really focusing on any social plan or any kind of reduction. We are looking for efficiency. Efficiency means a lot of things. where clearly, we need to produce more with the same people or we need to spend less somewhere else. So it's a combination of factor where, frankly, our top priority is not firing people, I have to tell you. And the EUR 130 million, let's say, savings I was targeting, it's really a mix of everything. But again, I can repeat it, we are not targeting any social plan. ProSiebenSat.1 sometimes did it in the past. Other competitors are doing now. That's part of the life. But I mean, currently, in our plan, we don't have such, let's say, priority. If I may say something on noncore assets. Clearly, we have a long list of companies. So I don't know if we have time to dedicate to all of them. And as I said, I can repeat it, it's not a [indiscernible] decision. So you were mentioning Parship. Parship is again something we are not, let's say, in the condition to sell now. I mean, they may be in the future better different. Other, let's say, brands that has been mentioned to you by you, clearly, are different. But maybe, Bob, you can be a little more precise about Markan Around Yes, yes, yes.

I mean -- so first of all, it's a good question. I reiterate what Marco said, we really are looking at weekly, monthly, daily, looking at the performance of all these portfolio companies. I did mention that we have -- we're going to a 2-segment reporting structure going forward. We have entertainment, and we have commerce and dating. I would say, generally, it's about 99.9%, very clear about which assets sits in what. As an example, around home sits in the commerce and dating segment right now. Mark Guru does not sit in the commerce and dating segment. So for us, once again, we are just looking once again to optimize value and Parship sits in the commerce and dating segment as well, but Mark already alluded to that as well. So we'll just continue our process. It's very financially driven, to be very clear, Marco indicated that. So where we think there's not a value or a financial benefit to benefit ProSiebenSat and its shareholders. We will then think about is there an alternative course of action for that portfolio company.

Good. Then who else would like to raise a question. Anaves Kempa. Please go ahead.

Hello. I hope you can hear me. A question regarding the total video because I think that this is very interesting. I'm asking myself, how will you be comparable to your competitors if you are now working with totally different KPIs here?

I mean, yes, I can understand. The comparison will be on linear audience. That's the easiest way because it's a KPI we always had in the last, I don't know, 40 years. But I have to say that when you are mentioning competitor, we see it a little bit different because RTL is a strong competitor, but unfortunately, I have to say there are many other competitors. And that competitors just name it one, YouTube, is you cannot compare ourselves already. I mean you don't know exactly how we're strong. Are we stronger? Are we weaker?And that's if you want also a problem for advertisers because if you put yourself in advertiser shoes, when you have to evaluate campaigns on YouTube and then you have to decide if it is better to go on joint plus ProSieben or joint Plus, podcast or whatever, you have this kind of difficulties because YouTube is not providing a currency, as we said, that is comparable to the one that we are using in TV. But certainly, we are in the position to provide to our investors a sort of return on the campaign that is based on KPI that they know. Then maybe it would be difficult for them to compare our campaign with the RTL 1 or with the YouTube, but probably media agency can help them in evaluating what I'm sure of is that advertising are looking for that because they look for reach, they look for total campaign reach. They're not looking at what you are getting out of the dinner only because then you are only focusing on a specific target and you are not clearly looking at the German population. So yes, it will be a little bit more difficult, but it is already. So unfortunately, it's not really something we can skip on. But we will try to, let's say, report to our investors, to our advertiser in the best way and in the most transparent way. Starting from a currency, the linear currency that is certainly more transparent and more third party than the 1 that the big platform are using them. So I think that we are starting from a better point than the YouTube and the Facebook of this world. But clearly, there will be a little bit of more activity in aligning KPIs and providing the best report of each campaign.

Good. Then I'll wait for another question. At the moment, nobody is raising questions. Then I would say, if you have a question over the rest of the day, then please, I'm always here to help and also Katherine Schneider or Martin Kunter. So just come to us when you have more questions. Thank you, again, you to, for the presentation and the Q&A. And thank you all for participating, and have a nice rest of the day.