TF1 SA (TFI) Earnings Call Transcript & Summary

Ladies and gentlemen, welcome to the 2020 financial results of the TF1 Group. We're very happy to have you tuning in. I remind you that the presentation will be followed by a Q&A session. [Operator Instructions] And now without further ado, I leave the floor to Mr. Gilles Pelisson, CEO and Chairman; and Mr. Philippe Denery, CFO of the TF1 Group. Thank you.

Thank you, Thomas. Good morning, ladies and gentlemen. We are very happy to welcome you to this session. After a very special year, once as every economic actor around the planet, we were faced with the virus. I think what we would like you to remember from this year regarding TF1 is the following: Very strong -- if I can get this right. No. It's not. Strong adaptability, allowing the TF1 group to accelerate its transformation and strengthen its model. That's the main idea. And we will -- I will come back on that in a few minutes. Philippe will present the financial results of the year. Then we will go on how do we accelerate the transformation to create more value and sales growth opportunities and leave you with good and robust growth perspective. Regarding the strong adaptability of the 3 businesses, a few things to focus on. First of all, on our Broadcasting segment, I think more than ever, we wanted to remind everybody that TV is a very powerful media. And we came out of this 2020 year in a reinforced way, once again creating a very unique bond between the French population and our viewers. With 3 hours and 54 minutes, the average daily consumption was significantly up. Of course, boosted by the 2 periods of lockdown where -- as you can see on this chart, we went as high as 4 hours and 34 minutes. This is on the overall population of 4 hours and 12 minutes during the second part. So well above the 2019, of course, figures. But most -- what is important is not only that the 3 hours and 54 minutes were 24 minutes more, on average, than the previous year, but it's more than the -- and in these 3 hours and 54 minutes, you have 15 minutes of catch-up TV, so 3 hours and 39 of live television. But amongst the 15 to 34 years old, 1 hour and 54 minutes. So that was 15 minutes more than the previous year. And that's for us, is really the return of the younger population back to television, which for us is a very, very good sign. Of course, when you put it into perspective, when you compare to online videos, it was boosted to 52 minutes, the viewing on online videos at -- so it's 14 minutes more. And then, of course, when you go to SVoD, which is now a significant part of the consumption, when you compare it on the overall population, it's only 13 minutes per day, and it was 5 minutes more. So compared to the 3 hours and 54 minutes, you can see that television is still the very significant media versus SVoD platforms. When you go to the subscriber base, of course, each subscriber views for 2 hours and 19 minutes each platform or the various platform he has subscribed, but still significantly less than the 3 hours and 54 minutes on average. We believe that our strategy, which, as we have mentioned for many years, has been a multichannel strategy, focusing on the various brands that we have at TF1 Group has been paying off. The most significant one, of course, is the group ended up on the overall population with close to 27% market share. On the women under 50, we ended up at over 32%. And then when you look at this chart, which is the 25 to 49 years old, you see that we ended up close to 30%, 29.9%, which is just unique in Europe at -- and with a plus of 0.5%. Among that, and I will come back on that, the TF1 channel ended up at 20.1%, which was a significant 0.3% over the previous year. And of course, the difference with the #2 challenger is also at 53%, which -- and it increased during the year 2020. So a very good result for TF1. TMC, the second channel, is now the fourth FTA, free-to-air channel. So that's also a significant move, and it consolidates that the fact that TMC is now at that level in the French environment. And then one thing also to remember is the LCI Group, which ended up at 1.2, so benefiting, of course, for the need for news and made a very -- had a very good year. Looking at the total video content. What we believe in at TF1, a very increased appeal to the younger generation. So back to the 15 to 34 years old population, as you can see, for TF1, 22.2%. So even higher than the 25 to 49 that I just mentioned. A record level, we were at 20% in the previous year. So a very significant [ decrease. ] It's 82% of the top 100 programs for TF1 group in that category, so very significant. And when you see at the few programs we mentioned, whether it's the daily soap, Ici Tout Commence, where it's up to 33% on that specific target when overall Ici Tout Commence does 24% on the overall population. Of course, movies like Harry Potters or [Foreign Language], the largest talk show in France, is now on that part of audience at 21% market share. So this is how much our impact on the younger population, which is very significant for advertisers and of course, ad sales has been improved over this year. Looking at TF1, of course, as a channel, it is a very unique performance in Europe. It's for women under 50, 92 out of 100 best audiences. And as you can see on that chart, overall, it's 72 -- 74 out of 100 on the overall population. But with very significant program, of course, our news program are ahead and leaders with up to 9.8 million viewers for the newscast of 24 -- at the 8:00 news. It's a very diversified basis with multi-draw which are promoted on this channel from entertainment to French drama, to movies to U.S. series, which I think makes the appeal year after year of TF1 and enables TF1 to increase its differentiation with the competition and especially the main challenger. Of course, we were further boosted by all the investment that we have done over the years on the MYTF1 platform. MYTF1 has become, of course, the first French TV replay platform. We reached 2 billion videos watched in 2020, so which was 10% above last year. But I think for us, it's really the user experience, where we haven't been that good over the last few years. And after revamping the platform 2 years ago, we have reached significant grades and the level of satisfaction from the viewers reaching 4.4 on the Apple Store, and on the Android side, 4.3. So ahead, of course, of our French competitors and very close now to the international platforms. What is really important is to see that for programs like U.S. series like New Amsterdam or the daily soap, you're reaching 29% or 25% additional viewers to the linear television. So this is a significant appeal and boost for our programs that now is really part of our daily life. Regarding ad sales. The TF1, which is the name of our ad sales team, had a very strong and kind of a surprising fourth quarter, which, at 5.9% increase over last year, which was quite a change compared to the first 3 quarters of the year. So quite welcomed by the teams and by us. And it was due to 3 major actions. First of all, we were close to our major clients, as you can imagine. Most of the leaders and the leading brands in France are, of course, advertising on our group, on the TF1 group. And they appreciated our support. And I think the fact of working hand in hand with our historical client made a difference. And at the end of the year, we saw that. And their budget and whatever investment they were ready to do came up and were invested on the TF1 channel. We had a few offers which were quite innovative in terms of first-time advertising buyers, first offer on the market to buy programmatic TV, so adapting to the consumption and what type of consumers you wanted to reach. And then we had also a 100% prime offer, which was an access to our premium IPTV program, which also helped some advertisers to make a decision. And then finally, even if we are attracting the largest advertisers, we wanted to widen our customer base, and we had about 80 new entrants that year, which was a significant boost showing that we can attract smaller players, new players, making them -- giving them the possibility to advertise on television. So it goes from a platform like STARZ PLAY to goods like De Longe or a lab like Bastide selling medical goods. All in all, of course, it was a very contrasted year between advertisers and industries. Of course, at the top left-hand, sectors have been totally impacted, and you're talking about travel, tourism, leisure, even cosmetics or beverages, which didn't advertise much this year and are really below what they have been doing. But I think what we want to remember is also the sectors with turnover was up in '19. So it's about e-commerce, it's about telecom, retail, health care, household cleaning, clothing. And all in all, it represents 36% of the ad spending. Of course, one of the significant impact of this year and what we were able to achieve as a company was the lowering our cost faced, of course, with this decrease in advertising. If we lost EUR 150 million in advertising sales, we were able to have a drastic reactivity in lowering our cost of programming by EUR 152 million. It's somewhat of a hazard or very good management, but we did not expect that to happen. However, it's 100% of the decrease in advertising revenues, which our programming team was able to deliver out of close to EUR 1 billion that we invest in our program a year. So it's a 15% decrease in cost. I think it went from extra acquisition of movies at a very optimized price because the studios were in a need to sell catalog sales. We revisited our formats even for the best franchises, daring to extend The Voice or to extend Koh Lanta. We took the risk of having a higher rerun of episodes, which were on the DTT channel and on TF1 to save some money. And of course, our news team were just outstanding as we asked them to extend their news broadcast from maybe 30 minutes for the 1:00 news and the 8:00 news, to 55 minutes on a daily basis, which was an outstanding performance on their part. If I move now to Studios & Entertainment. The story is a little bit different. We, of course, as Newen confirmed our position on the French market as a leader on local content. But as you know, it's beyond the French market from now on with Newen. What is important is to see that in the daily production, we were able to move from 1 daily soap when we acquired Newen in 2016 to now 4 daily soaps, 3 in France, 2 on TF1 in access prime time, which is [Foreign Language], which was introduced in November of 2020. Then there is On France Television, the [Foreign Language], which has been a very famous and the longest running soap on French TV. And then we introduced Liza On VTM, the Belgium television, late -- earlier this year. This meant that this is a significant know-how for the Newen Group at that level of industrialization because a daily soap is really an industrial way of delivering content. Our studios managed to shoot over 200 days. So we were very much on the top of everything, trying to, as soon as it was possible after the lockdown, to start work again, we did, and the teams were highly motivated to do so. But the story goes beyond France and Belgium. From now on, Newen has expanded its footprint to kind of a global footprint with the acquisition, of course, last year of Reel One in Canada. We have also in the Montreal 100 [ Graphics ] for Blue Spirit, the animation studio. We do produce, with Blue Spirit animation, drama, documentary, documentary for platform. We will talk about it a little bit later, like DSK with Kappa, the French production house, but it's also in Belgium with De Mensen with game show, scripted reality in Holland and TV series; and then in Norway, the movies. And in England, from now on, we have also Ringside Studio, which was developed in 2020. So we have expanded that footprint, giving the group a more balanced way of doing business and better capabilities of attracting talents throughout Europe and also in Canada and the U.S. The book of orders is at a very high level as we will end 2020 at 16 hours of order, which is an excellent performance for us. Of course, on the entertainment side, it was more the capacity to mitigate the impacts of the crisis, which was at stake. We were able to optimize whatever we could at La Seine Musicale, which is the large theater that we are running next to Paris in Boulan where numerous TV shows ended up being shot. And even if we couldn't have any audience and it was basically closed, we managed to shoot a lot of unique TV shows, like the Energy Awards, like concerts, which were more on the digital side, but gave a very spectacular surroundings in that environment. And then there was the enhanced exposure of PlayTwo. PlayTwo is our talent studio in terms of music. They have a very good lineup of talents. And the whole idea has been to create synergies with the TV broadcasting, whatever shows we can do to expose their talent and bring the power of marketing of the TF1 group behind those talents and give them the support, which makes them very unique in the music environment. On the Unify side, it was a story about adapting our 3 pillars, relying on the very solid digital brands that we have. So on the publishers, it's 5 strong brands with an increased reach. It starts with the cooking with Marmiton which is the #1 site in France. And of course, from that perspective, lockdown was a very good news for them because maybe one of the few players which saw positively the lockdown as everybody started and wanted to cook. We -- our traffic was multiplied by 3 in terms of users and in terms of sessions. So kind of outstanding performance versus '19. Kind of a similar story on Aufeminin, the female portal. Doctissimo, for health, was also in very good performance, expanding its reach and having 26% additional page views. Le Limeric, which is more of digital counseling and the advice portal, had expanded its reach with 14% more session, and introduced testing and AI on electronic products and goods to give advice to the consumers. And I will come back on My Little Paris, which on the e-commerce side, did very well. So all in all, it was an enlarged business model going from affiliation to B2C to community activation, which has always been part of that story. And then using a powerful influence offer for the 5 brands, which I think is very much in the digital area those days. Moving to our business solution pillars. It was -- especially the -- we ended up the year with a fourth quarter, which was quite strong. Magnetism, which is kind of a brand content studio, achieved new partnership with -- especially with Nespresso and Richard Mille, the watch. Very strong growth in sales. We multiplied the sales by 2, so we were very happy. Icon is influencers, but in the luxury segment. So developed some new partnership with Nespresso, made a very strong deal with the Abu Dhabi tourism office. And as major brands couldn't do a lot of events and PR, they were back to using a lot of influencers on the web, which was an excellent news for Icon. And in Gambettes, the programmatic advertising, had a strong growth in Switzerland, Belgium, and then good recovery in the fourth quarter in France. Looking on the e-commerce side. A good year for My Little Box as we managed to sell as many box with 11 boxes we had a summer, 1 box during July and August, compared to 12 box -- or 12 creation last year. What is really important is how My Little Paris and My Little Box renewed their appeal to their customer base by introducing new brands and new partnership such as Le Patio, [ Lancel ] [indiscernible] or Reebok. So boosting their appeal, and of course, MAC from Estee Lauder. We were present and had good results in Germany and in Japan, which are the other 2 countries where we sell those box. On the stocking box side, Gambettes, we were able to reach 46,000 a month, which is a plus 17%, also with significant partnership with major brands renewing the appeal to the consumer. And then, of course, being present in Netherlands and in Germany, which are countries where we want to grow with that concept. And then finally, Gloria, which was the new name of the Beautiful Box, which we had, has reached now a performance of 52,000 boxes a month, so which is a significant performance, 12% more than 2019. So this is, all in all, what we were able to achieve, and I will now leave the floor to Philippe Denery, our CFO, for the financial result. Philippe.

Well, thank you, Gilles. Good morning to all of you. I will present the results for the full year '20. You will find all the details of the accounts as well as individuals and consolidated account and appendix on our website. Consolidated revenues averaged for the full year, EUR 2,082,000,000, down by EUR 256 million, minus 10.9%. Regarding the Broadcasting segment at EUR 1,613,000,000, down by EUR 161.4 million. They are mainly explained by the drop in advertising revenues, minus EUR 152 million. This, after a half year, which has been significantly impacted by the crisis and the lockdown period, we had a second half, which has been better with a Q2 plus 8% and -- Q3, sorry, at 8% and the Q4 at plus 6%. Regarding other revenues at EUR 198 million, down by EUR 8.9 million, that is -- I just remind you that last year, we had the selling of rights, the Female World Cup rights for EUR 11 million. This year, we had a good performance of interactivity, which compensate the lower performance of TF1 production as well as TF1 production linked with the situation -- the global situation. Regarding Studio & Entertainment at EUR 309 million as compared to EUR 390 million last year, minus 20%. First of all, as you know, for the production, they have been significantly impacted during the first half year by the lockdown and the shutdown of -- they couldn't shoot some programs during 2, 3 months, mainly April, May, June, which has impacted the activity. That is as well the case for the theater and the cinema which explain the drop in the total revenues for the production, sales and audiovisual rights sector. Regarding revenues from games, music, live show and home shopping. I remind you that on this line, we had, last year, EUR 20 million, which were coming from home shopping for the first quarter of '19. And out of those EUR 47.3 million, EUR 20 million are coming from deconsolidation of the home shopping last year end of the Q1. Regarding other revenues concerning this line, they are also impacted by the [surface] situation and the crisis, and that's the case for all the music sector as well as theater. Digital at EUR 159 million as compared to last year EUR 173 million, minus 7.7%. This segment, as Gilles has explained, has been hurt by the situation all the year in terms of advertising and mainly on programmatic and direct media. The social e-commerce business is rather resilient and even improving as compared to last year. And we managed at the end of the year for the full year to increase -- to have some increase in the marketing, digital and business solution business and especially during the Q4. Now concerning the cost of programs, well, Gilles as always, already given some explanation on those different -- the good, very good performance. We reached EUR 833 million, down by EUR 152 million. This figure is magic this year because this corresponds as well EUR 250 million, as you said, drop in the TV advertising revenues. So 100% compensated by savings on the programming cost. If you look at the different program, you can see that they have all made savings. Of course, on the Sports segment, we had no special events as compared to last year. So that's explained partly the performance of the sports. Nevertheless, out of the EUR 858 million, I'll remind you that we had net of programming replacement program. We had last year a cost of around EUR 40 million. So those performance remain quite remarkable. Concerning news, we had an increase in volume by around 1/3 in terms of minutes which have been broadcasted on this news agency as well as we could achieve some savings for EUR 4.5 million. Regarding movies. As Gilles has already said, movies, we had some price units which were down. We could optimize on the different channel, the broadcasting of some films. And at the end, we had achieved EUR 15 million savings this year. Entertainment is even more significant by minus 20%. That is also due to the fact that we had, as Gilles said, stretched some program, and we had some optimization on the different grids and the different channels of the group. Now concerning the current operating profit per segment. We have current operating profit for the whole group at EUR 190 million with a margin of 9.1%. I would say that on this current operating profit, you should take into account the fact that we have applied, for this year, a change in our depreciation rules for U.S. series. You will find all the details in our detailed accounts. But what has been taken into account is the value of the first run and the second run of the U.S. series in our inventories. And we have decided to change the rule, taking into account the value of the first and the second run and move from a split of 50-50 first and second run to 2/3, 1/3, 2/3 on 1 -- on the first run and 1/3 of the second run. This has impacted our current operating profit by EUR 14 million, 1-4 million. So just to take that into account when you look at our current operating profit for the year. Now if we take the breakdown of this current operating profit, those EUR 14 million have impacted only the Broadcasting segment at EUR 163 million, down by EUR 22.5 million, including this change of the rules I have already mentioned. And we have to, of course, just look at the margin, which is 10.1% for the broadcasting for the whole year. Regarding Studio & Entertainment. This segment has reached a current operating profit of EUR 31.2 million, minus EUR 26.8 million. This fall in the revenues is in line with the activity and the reason of the slowdown of the activity have already mentioned due to the crisis as well as the fact that there is a shift in terms of delivery of program for Newen from 2020 to 2021 because of the situation, and this shift should deliver beginning of this year as compared to what we had last year. Digital, minus EUR 4 million. That reflects the drop in the activity, which has been significantly impacted this year by the COVID-19. Now if we look at the consolidated income statement, I will not come back and as already explained on the revenues as well on the programming cost. If you look at the other chart, depreciation, amortization and provision, you can see that we've made some savings of EUR 38 million, altogether in addition to the EUR 152 million savings on the programming cost. This is a combination of plus and minus. In terms of plus, we benefit this year for -- from, first of all, a tax level, which is a bit lower because based on our revenues, so advertising revenues as well as, as you know, we have not -- we have been not paying taxes or the well-known small taxes from the 1st of January '20. So globally, this tax impact is around plus EUR 30 million. On the minus side, we had this EUR 14 million, 1-4 million, which is due to the accounting rules applied to U.S. series as well as some bonus and incentive which compensate altogether, the EUR 30 million benefit of the tax. In addition to that, we have reached around EUR 38 million savings on general expenses, which basically is reflected in -- on this line. So current operating profit at EUR 190 million, which has been already explained. We have taken the recognition of the write-down of the assets of Unify for EUR 75 million, which gives the operating profit at EUR 115 million. Nothing special to say on the different other lines which are traditional. Just for you to know, you will find the SALTO impact on our accounts on the line share of profit and losses of associates for around a bit more than EUR 10 million out of those EUR 11.3 million, You can have -- you can see on this slide. All together, the net profit is [ reach ] of EUR 53.9 million. Now concerning the balance sheet. I will not make several comments, except that you will find on the noncurrent assets line, a combination of minus the recognition of the depreciation and the value of Unify goodwill as well as plus an increase in assets on production, which is consistent with the explanation I gave you in terms of shifts from 2020 to '21 in terms of delivery of what they have [ shooted ] and what they will deliver in '21. As you can see on the net debt, we have, at the end of this year, no debt, and that is due to a combination of improvement in the working capital as well as no dividend for -- served in '20. Just to come back to the trends in the net cash position. While the evolution of our position cash from EUR 126 million minus EUR 126 million last year to 0 this year. Contribution of the operating cash for EUR 373 million has compared to EUR 421 million last year. That is minus EUR 50 million, and that is linked with the minus EUR 65 million on the operating cash flow -- or operating revenue, sorry, operating margin. So just in line with the results. In terms of the change in operating working capital, you can see that we have an improvement of EUR 135 million, EUR 103 million this year compared to EUR 32 million last year. So we have managed to do the best for managing the cash this year. And at the end, we could deliver a good performance on the working capital. While regarding the net special expenditure at EUR 285 million compared to EUR 245 million, we have an increase of around EUR 40 million, again, due to the capital expenditures and of new -- of the production sector all together, but which is compensated by the improvement in the working capital. To end with my presentation, I just come back on the dividend. We -- after a year, which has been impacted by this crisis and the decision of the Board to suspend the dividend payment in '20 for the year '19, the Board will present to our Annual General Meeting in April, a proposal to serve the EUR 0.45 per share, corresponding to a payout of a retreated net result of 73%. This is in line with the Board dividend policy in order to serve a return to the long-term shareholders. So thank you, and I will now leave the floor to Gilles for the last part of our presentation after a video viewing. Thank you.

Thank you, Philippe. Yes, we wanted to share with you because this is all about content, video, featuring some of our newest shows regarding whether it's French drama, whether it's entertainment, but most -- more importantly, I think, over the years, you have been asking us whether we would create synergies between the various parts of the groups. And you will see that there are some very significant and highly visible synergies between the various content parts of the company and the way we can expand them. So without further ado, we will be moving to that video. [Presentation]

So going back to this acceleration in transformation to create more value and sales growth opportunities. I will come back on a few of the shows you just saw. First of all, insisting on the transformation of our TV programming through creativity and innovation. We are strong believers that as a leader, we have to innovate and we have to create novelty. There is a high demand for that. We have been very successful at doing it, and this is to set the pace and also enforce our excellence. So a series like Doc is the first time that we have put on French television in a prime time position, a series created in Italy, which has been a success. And it has been a success for us with 32% audience share. So opening up some new opportunities because traditionally, it was just French drama and U.S. series. So we are looking at that as a very new experience but very successful. As you saw on the movie, on the video, the new entertainment format has also been part of the [ Send Off ] 2020. As soon as we could put them on the air with advertisement, we did. It's about District Z. It's about La Chanson Secrete, Secret Song and [La Grand Incluse] with [ Michel Bell]. These are shows where we are involved as a co-creator. And so having some value in the fact that those concept can be exported, and some of them are already in talks or have been acquired already by international players, so -- which is good news because it's a new opportunity for us to not only broadcast but also co-create with partners, which are very strong in the entertainment field. When you see [ La Grand Incluse] doing 40% market share, it was a very good sign. And then, of course, District Z was also a very strong performance by the end of the year. Looking at the total video. What we wanted to share with you was really how it has been enabling us to increase, enhance the brand value creation, but also maximize the exposure of the content. What I will call the lifetime value of the content. And in the value chain, the part that the TF1 group is able to capture is really what is at stake. So it means acquiring different rights. But when you look at it, if you say that [ D Day ] is still the linear television day of broadcasting, and you see this example, which has been a very strong French fiction, La Promise. It did 7.5 million on TF1 the day it was broadcasting. Outstanding. But 30 days before, it was on a -- as a premier possibility to be seen and watched on SALTO, the platform. It reached 700,000 viewership. So that was really interesting to see that it captured and it created also reasons to subscribe as we saw a boost in the subscription rate. And that was 30 days, so which is really the big plus that SALTO will be offering to their subscribers. And then you have also the replay the next day on one of our channels, which is TF1 Series Films, where it did an additional 400,000 viewers. And then it went on our platform up to 7 days beyond the broadcasting where it did another 900,000 viewers. So all in all, on what we counted as the SALTO figures are confidential. It was still moving from 7.5 million to 8.7 million. It's an additional 1.2 million, which was created, thanks to the digital exposure, which will be part, from now on, of our approach in terms of acquisitions of rights and in terms of positioning ourselves on the content market. One word on SALTO. We really are very pleased as a shareholder with the successful launch of SALTO. Recently, over the last few months, SALTO was able to capture 20% of the growth of the OTT French market, which is significant. We are recording in France, we are still at 1.5 subscription of SVoD platform versus 2.8 in the U.S. So the market is still growing, and it's growing fast. We are attracting with SALTO 50% of subscribers, which are under 35 years old, so -- which is a nice complement to our traditional viewership on television. And the viewing time is very close already to what the international platform experience, which is over 2 hours, 122 minutes per day. So meaning that the content is appealing to those who have subscribed. So these are very, very encouraging figures, and we count on SALTO to become an additional showcase of our content for the future. Already, our daily soaps can be viewed at D minus 2 for the 2 of them. So very significant experiences. Moving to the transformation through distribution. It's also in partnership with our major allies in the distribution field. And we signed, at the end of the year, a significant distribution agreement with Orange, which is the leader in France in terms of telco and distribution and boxed and sold, featuring MYTF1 Pass, which was, once again, an innovation on the French market, which will be a premium catch-up service offered to the Orange subscribers with enhanced content, but also with no ad breaks during summary -- their replays, so which is also a novelty for viewing our replays without any interruption of ad breaks. I think it's a great signal for the French market to have the 2 leaders extending their agreement in a win-win situation, which, of course, we were very pleased to be part of. Regarding the ecosystem model. We wanted to come back on the way in terms of ad sales, we are also transforming our model. If you start at the top right with what is from now on, the content duplication and using a single currency moving from the traditional GRP that the advertising world has been using for decades, to the CPM data basis and as link that as a single currency between advertising and digital on advertising and television digital. This makes, of course, the possibility of converting and comparing performance much easier. Then we move to, of course, the power of targeting through the segmented TV. As you know, during the summer of 2020, we were allowed in France to introduce segmented TV. We made a partnership with Orange first, part of our deal back in December. And we just announced yesterday that the second partner would be with Bouygues Telecom, the mobile operator in France. We -- this enhanced, of course, the capabilities to attract new customers. And of course, it gives us the opportunity to enhance through the brands all the CSR awareness where most advertisers are, of course, engaged with from now on. So giving them kind of the best of both world, bringing the power of television, which remains the most powerful media in terms of brand advertisement and brand awareness, but yet with the combination of the targeting given by the Internet. Looking at our commitment on ESG and the -- at the heart of our DNA, we wanted just to have a word on the -- our climate strategy, which was presented a few weeks ago by the -- within the Bouygues Climate Group. We, of course, are not -- we are not a very significant player in terms of impact in carbon. Nevertheless, we committed to a significant reduction of our footprint in terms of carbon by 2030 by 30%. So that's a commitment that I made. And that the company will be going on, having reports on our -- in terms of production on our carbon impact for every production in the future, training our people. I mean, there is plenty of things where we can do certainly even better than we are doing today. And then, of course, we are not only an actor in that field, but we are also a showcase. And as a showcase, we want to be a player, which, of course, innovates and also gives other partners or stakeholders opportunities. We just introduced on TF1 on Saturday morning, a new weekend -- new show, which is called Generation Ushuaia from our TV pay brand, TV channel, pay channel, with [ Fani Augustina ], which is a well-known reporter, a journalist specialized on environment issues. Over the years, we have about more -- over 1,000 broadcast regarding environment and issues with environment on our newscast on TF1, the 1:00 and the 8:00 news. On LCI, it's a little bit less than 500 reports. And then, of course, on Ushuaia TV, the pay channel, we reach every month, 3.8 million. So all in that, that's a very strong commitment that as a company, we are making to improve and to help and facilitate the awareness on those issues. And as such, we have been already recognized by extra financial rating agencies such as Gaïa in France, the Dow Jones Sustainability Index where we got a fifth place on general ranking on a worldwide basis and seventh place on environment [ dimensional ] ranking in the media companies on a worldwide basis, so which we are very, very pleased with. One word on Newen in terms of transformation. I think what we want to really emphasize this morning is the successful multi gen and multi-country partnership with platforms, excuse me. It's new opportunities in France, thanks to the decree, which will make an obligation for the platforms to invest in France. But what we want to emphasize is that Newen, we will have closed then half of its production from outside of France by 2020. So we are moving ahead with that. And over the years, it will be further emphasized. When you look at the lineup, you can see that Kappa, which is a French company acquired in 2016, part of Newen, is already producing, as you saw on the video, for Netflix and for Prime. De Mensen in Holland -- in Belgium, in Deutsch-speaking Belgium, is producing [ Undercover ] which is a very significant format in terms of fiction, which has been sold over 20 countries. And in Netflix, with a movie coming up to complement the series. And Blue Spirit, our animation studio, has been chosen by Marvel Studios to produce some of their contents for the Disney+ platform. So all in all, these are the start -- the beginning of what we see as new stories to be written by the platforms and with the platforms as partners throughout the world. In terms of book of orders, you will see a very significant share of the platform's orders in the Newen order book over the years. One word on the transformation of Unify. Of course, it has been a year where we have been strengthening, I think, our growth potential for 2021. We multiply our data inventory. Now we have a data strategy on all our assets. The data inventory has been multiplied by 4. So that's very significant. All our content and sales team are data trained and data-driven, so with a continuous tech investment, which is part of the story on data. We have social networks expertise for the -- for our brands, so which is also kind of new. And we have taken our very strong publishers into the social networks field. Of course, we have a unified, if I may say so, team for media agencies and advertising and advertisers. It means about conquest with a very strong partnership with advertisers and media agencies. But it's also about the performance on our e-commerce expertise. We were ranked in the top 3 of the Internet advertising sales houses recently. So that gives us a visibility which we, of course, didn't have a few years ago. And then we are focusing in terms of brand content, on food, health care, women, parenthood and tech, a few fields where we are very strong. Of course, as you saw in the video, the synergies between Unify and TF1 are taking place. And then we have been refocusing on a few key markets in terms of publishing, you're talking France, Germany, England and the U.S. E-commerce, it's with Italy and Japan. And then in Business Solutions, in Switzerland, with [ Gambettes ], Belgium, and the Abu Dhabi, as I mentioned before. We refocused by selling, disposing Onmeda in Germany and Alfa Mille partnering with Mendoza, the day, the ad sales house part of the Exor group, to dispose of the Mille, which was the Italian part of Aufeminin, it was just announced a few days ago. In terms of robust growth perspective, 2021, when we look forward, we just wanted to leave you with these basic ideas in that in a very volatile and still volatile macroeconomic environment, we are looking at a very strong lineup for 2021. Whether it's for our event mini series, it's the French adaptation that you can see of Your Honor, which was an Israeli series and then that's been readapting in the U.S. And then we are having with camera and Gerard Depardieu will be a very significant move on French television. An adaptation of This Is Us, Je Promets, which is currently on French television and which is doing extremely well since a few weeks. New Heros, which are recurring heroes with HPI, so which is high potential intellect, kind of a comedy with some sort of police thriller intrigue. New entertainment, Chanson Secrete, I mentioned already. And then in the sports, we will have, of course, the Euro 2021, which will be shared with M6. So all in all, a unique lineup, very diversified. Yet, of course, we will have the flexibility, which we acquired, thanks to 2020, there were some positive aspects in 2020. We learned a lot, and I think we will take all that with us for 2021. In terms of Studio & Entertainment, it's an increased share of revenues from our international client given the footprint I described. And from Unify, it's back to profitability for 2021. And then, of course, the strengthening of our publishers brand and the developing of the synergies with the group. So with all that, we believe that we are in a growth dynamic with opportunities in both content and digital. And of course, we want and we intend to be a key player in total video. This being said, we are now ready to answer your questions, and we will go back to Thomas, I guess, to orchestrate this. Thank you.

Okay. So I have the first question coming from Kepler Cheuvreux. Do you expect Q1 2021 advertising revenues to be negative again? What do you expect in terms of net operating losses for SALTO in 2021 versus 2020? And can you give more color on expectations for margins in Studio and Unify for 2021?

So maybe one word on the advertising market as the beginning of January and February, which are the months we already know about. The market after a very strong end and a very strong December in 2020, which surprised us and enabled us, as Philippe mentioned, to have this 5.9% increase in sales. The market is kind of soft in the beginning of 2021. So for January and February, we don't have much visibilities in March. So at this stage, we are going to remain fairly neutral on the way we see the market, but not overly optimistic.

Well, concerning the question on SALTO, we remain with a global budget of EUR 45 million losses -- cumulative losses on 3 years. We had a bit less than EUR 11 million this year, significantly higher next year. We don't have to get the figure and any final figure. But what we can say is that normally, we will have a more significant one in '21 and less in '22. We will review, of course, the performance of SALTO during spring. And we will come back depending -- it's too early now to give any kind of special figures. We will come back. Probably SALTO will come back after spring when we had the opportunity to review the business from October until spring.

Okay. I think now we have a question from the telephone.

We have a question from [ Vishal. ]

Yes. 3 questions from my side is that just on program cost for 2021 given the step up in terms of the content slate that you talked about [indiscernible] euros in there. Can you give us a [ view ] in terms of where that's not going to be or land. My first question. The second question is, can you just expand on what to do with about the change in accounting rules? What impact was there? I heard you say it was like [ EUR 14.4 million ] impact negative for the full year. [ Has that brought in] [indiscernible] . Just to get a better understanding. And then just the third thing, just to come back to the margin question, which I thought you answered on the last question was market expectation or [ Unify you go into '21, '22. ]

Well, on your 3 questions, I'd just remind you that we cannot give, in this specific circumstances, guidance. As you have seen, we just give you an idea of our 1 review, but we didn't give, this year, a specific guidance. Nevertheless, I will try to answer your questions. On the first one, for programming costs, I would say that EUR 152 million on savings, which are nonrecurrent, and that would not be serious to go on with this level of savings on all kind of genre, we have to reinvest, and we have to secure our ratings nevertheless. And I remind you that part of it is coming from the fact that there was no sports event this year, and we will have sports events next year. So part of the -- not significant, but a part of the savings are coming from the situation. So what we can say is that on the programming cost, we have learned a lot during '20 because of the situation. And we will benefit from the lesson we have from this year. Having said that, optimization, multichannel, stretching some program was important for us is not to give a figure, but just to be sure that as we have demonstrated in '20, we will have the capacity to adapt our programming cost to the situation and to absorb -- whether to absorb a drop in our revenues or to reinvest if -- as it has been done in Q4. We think that through those investments or those expenses in our programming, we can go and catch additional revenues, which has been clearly demonstrated in '20 on up and downs and investment or savings depending on the top line. Now concerning your second question, well, it's a big technical. But I will -- I can come back on it just to give you the figure and the impact. We used to differentiate U.S. series on a 50%-50% the value of those series for the first run and the second run. The acceleration of the consumption of those U.S. series, which has been accelerated in '20, gave a bit less value on the second run. So we revisited the split between the first and second run, and we put -- and we decided that in order to be consistent with the value of those U.S. series and -- first and second run to give a value of 2/3 of the first run and 1/3 of the second run. Then it has an impact on the inventories of our second run. And so having changed this rule, we have taken in our accounting, EUR 14 million, 1-4 million, of the discount, if I may say, or the value of -- in our inventories of the second run of U.S. series. That is the explanation. It's just -- not just, it's accounting. There is no cash, no specific impact. But this is just to take into account value of our inventories, assets in our books in order to be consistent and more consistent with what we have experienced this year in terms of this different first and second run. Now your third question was on the margin. And we, again, don't give guidance just because -- and I'm sure you understand the situation and the lack of visibility. What we've said is that Unify will come back to a positive result, that we are fully comfortable with the fact that even if the business has taken a bit of slow linked with the situation this year, they will come back to some better profitability and growth in the next 2, 3, 4 years. So no specific guidance, positive result next year for Unify.

Okay. I think we have another question from Exane. Regarding the press release that you made on the deal with Bouygues yesterday for addressable TV, could you please tell us how these addressable TV contracts are structured? And how long they are? What the KPIs are? And how will we be able to track how much of your revenues going forward are coming from addressable TV? And the second question, sorry, is, you mentioned your book of orders for Studios is up 1,600 hours at the end of 2020. How does that compare to previous years?

We -- on the addressable TV market, let's say that we are at the very beginning. So as much as we like to see it happening, and this was really a request we have made to put us on a kind of an equal basis with the Internet player, we are still not yet exactly at that level as we were forbidden to put the address of the seller on our advertisement, but I think we will work on that in the next few years. We have to be fairly cautious because at this stage, it's really the beginning. The evaluation of the size of the market are varying between EUR 150 million to EUR 200 million, EUR 300 million. We don't know over the years. So it's now more -- our focus is more on creating those arrangements and those deals with partners, which are the telcos. And the good news is the Orange and Bouygues Telecom deals, and I hope very soon, we'll be able to announce further deal with the other players. Regarding the way they are structured, we usually don't give the lengths of our agreement and this part is part of business secrets. The -- it is about value sharing. So there is a value share between those -- in those deals between the telco and ourselves. That's definitely the case. And I think it's really the fundamental of about making them a win-win expansion of the market that we are going to monitor very closely as the leading in ad sales in France in terms of TV advertising. And on the book of order for Newen, we are coming from 1,500 hours. So it's a significant boost. Of course, in there, you have some orders going linked to the daily soaps, which, of course, can impact differently from the -- just the miniseries or documentary, but when you combine everything, it has been a significant job for us.

Okay. Thank you. We have another question from Jerome Bodin from ODDO. Ex year 2021, what could be a possible inflation on programming? And the second half of the question, could we have an indication of sales for TF1 games?

The word was inflation in terms of cost programming? We -- at this stage, beyond what Philippe just said about having -- adjusting our cost of programming to a normal year, we don't think it will be normal yet, because as we exit the crisis, first of all, we are seeing that it takes time. Then some sectors, as I mentioned in the presentation, the 12% that you have will significantly impact sectors will not recover soon, the airlines, the tourism and travel. These are -- I think it will take a few years. So we have to be cautious on the sales side. We may have some new advertisers. We may have some expanding sectors which compensate. But we want to be on the watch regarding the cost of programming. So we don't anticipate necessarily an inflation, of course, but we will increase our game. As I showed, we have a significant lineup. Ara Aprikia, the Head of Content, has been working on really having a lot of novelty. And we are very happy with that because this creates significant audiences and it enables us to keep our prices up regarding advertising. And the second question, there was.

Games.

And on the games, the disposal of the games is having successfully developed TF1 games and [ Jarden ] over the last few years. We are now ready, we think, as the company is ready to really be a player, but maybe with a more dedicated shareholder, which is a company like Jumbo Set. They are already significant players in France with all the licensing of national games. So they are a well-known company. And we see this more of an opportunity for us to focus more on brand, TF1 group brand-related focus, like what we have been in live, live entertainment with Camping Parade, where we are opening real campaigns, branded camping party. We are opening playgrounds in shopping centers. We will be branded Teo. So these are expanding our brands rather than focusing on -- in a field like the cardboard games where we are a little player still as the market is consolidating once again.