TF1 SA (TFI) Earnings Call Transcript & Summary

Hello, and welcome to the TF1 H1 2022 Results. My name is Andrea, and I'll be your coordinator for today's event. [Operator Instructions] I will now hand over to your host, Gilles Pelisson, Chairman and Chief Executive Officer; and Philippe Denery, Chief Financial Officer to begin today's conference. Thank you.

Welcome, everyone. Very happy to be sharing our Group's first half result with you this morning. And as I hope you will see, they are quite satisfactory. First of all, I'll go on the first slide saying what this presentation will be all about. We will be sharing the highlights of this first half, the activity review. Then Philippe will take you through the financial results and financial performance. And finally, we will give you an update on the Group outlook for the months coming ahead of us. But first of all, let's look at the highlights of this first half of '22. The key highlights are the following. So regarding the Media sector, very strong performance of -- thanks to a premium lineup on linear and non-linear, attracting commercial target. We remain a strong leader with stable ratings at 33.5% on women under 50 and 30.1% on the target 25 to 49. Very strong operational focus on our side on the convergence between TV and digital streaming, very successful rollout of MYTF1 Max, which was our first attempt to offer a pay service to our audiences, especially on OTT combined with social video content. So, all-in-all, we are very pleased having this new brick in our house. A ramp-up of the addressable TV, we have been talking for many months about our addressable TV. Now it's starting to take off in France. And then dynamic digital ad revenues with MYTF1, we're talking about 25% increase in sales for MYTF1. And finally, very important, the successful disposal of assets on the Unify part between founders having no further impact on our accounts based on those disposals and then social stability, which was also one of our main concern. On the Newen side, it's the strengthening of Newen on growth markets, both thanks to talents and label acquisition recently in the UK with Joi production, in Denmark it was Real Lava and in Spain we opened with the partnership of a prominent Spanish actor Capa in Spain. So, focusing on documentary format. Then productions delivered like the Gremlins to Warner, soon to be delivered Liaison, the first major Apple TV production in Europe based in France and in England. Marie-Antoinette, which is for the Canal+ Group and under development, The Hunt for Jasper S which is for Viaplay, the platform out of Tuvalu in Northern Europe. So in term of key figures, consolidated revenue, it's strong increase of 5.2% at EUR 1.186 billion. The Group advertising revenues are strong for the semester at EUR 815 million, with 1.6% increase. The second quarter was a little more challenging than the first one. Newen Studios revenue at EUR 158 million, it's a 9% increase. All-in-all, it's a current operating profit which is progressing very nicely at EUR 189 million. It's a 11.6% increase and the margin rate, as you know, which has always been our challenge at TF1 at 15.9% for the semester and for the second quarter, it's over 20%. On term of free cash flow, it's a nice progress. We are at EUR 123 million all-in-all, which is quite satisfactory. In term of activity review, let's go now to the Media part on -- I just wanted to touch again on the consumption of -- TV consumption, so what we call the daily watching rates for viewers. We are still at a strong 3 and 22 minutes in France. It's only, I'd say, 7 minute less than in 2019, which is the reference year if you take out the pandemic impact of '20 at '21. So, we are the first media in term of what we call the attention market. You can see that there are challenges on the younger audiences which are decreasing, but nevertheless a very strong reach. The strong reach, you have it on the second slide on Slide 8, whereby we're focused on the fact that we are reaching more people than ever. Altogether, 4 years old and plus, it's 43.7 million. So, it is a progress compared to 2019. In term of women under 50, we are at 6.9 and the 25-49, we are at 13.2, which is also a very strong presence. In term of the ratings, if I jump to that, I just wanted to reemphasize how strong was the 33.5% market share that we have on the women under 50 and the 31.1%. As you can see, compared to our main competitor, the M6 Group, it's a strong performance. The France Television Group has been helped by the Olympic Games, especially on the first half of the year. When we move through channel by channel, you see the 33.5% for the Group. You see that the TF1 channel, which is the leader in France has increased its gap with the M6 channel, so which is a strong performance. TMC is also performing quite well, TFX. And then the good news, especially on the 25 to 49 is the performance of both TF1, TMC which for us are very, very, very significant. Finally LCI, our all news channel has benefited of course for a very strong news flow in the first half, thanks to the political activity in France, with the presidential race. We covered it I think fairly well and the audience went up -- jumped up to 1.6%, which is a 0.5 point increase. A few years ago, we were wondering whether we could reach 1.0. So you see how much we have made progress and of course the war in Ukraine, how unfortunate it is, has been also a reason to watch all news channel, which are altogether progressing quite well. Moving to our record audience, of course, the ratings are supported by very strong content, very unique content as HPI which is really the best French series for more than 10 years. The first season was launched at the 10.9 TV viewers, this second season has been at 8 million or 9 million, which is really very, very significant. And now we are also benefiting from a very strong replay at 20%, 25%, so making this a huge success. It is also, you will see that in a few slides, distributed now in over 100 territories. So which makes it also -- as Newen is capitalizing on this because they are in charge of the distribution, a very nice project internally to the Group. In term of entertainment, very strong performance in term of brands, which are well established in France. We have now 3 entertainment shows weekly. On Tuesday, Koh Lanta at 38% market share. Then there is on Friday Mask Singer at 39%. And then The Voice always on Saturday at 32%. It is more our capabilities to retain those franchise, make them very much modern, current, reactivate them season after season. One good news was also of course the Champions League Final. That was a game, which was largely vastly commented, not only for the results, but also for the lack of organization in France. Nevertheless it got some strong audience. It started late half an hour. We couldn't benefit from that in term of advertising, because we are capped at 12 minutes. Nevertheless, at the end of the day, it was strong ratings. 38% in France, although there was no French team but lot of French players on the field. 38% for women under 50 and 44% in 25 to 49. In terms of news, it was really TF1 being the leader on all major news events. So whether it was the presidential election with very strong ratings. You're talking about 7.3 million people watching for the first round and 7.2 million for the final call with the nomination of Mr. -- the election of Mr. Macron. The Ukraine war coverage and of course, which the presidential election was followed by the national assembly election, which was also very strongly followed. If we move now to MYTF1, here the story is really that, as we consider that from now on it is kind of the focus point of the company for the coming years with not only a replay platform, but then an AVOD player, the name of the game is really to expand our reach in digital. Of course, we are the first free TV replay platform with now [ 26.5 million ] catch uppers at the end of June. Altogether, it's 1.2 billion videos watched. So it is a decrease versus '21, but there was the pandemic. Now we have TF1 Max, which is also taking away some viewership. So altogether, a very satisfactory result. There is nothing to worry about here. Here it's really very strong performance and we are continuing our expansion, very satisfactory also ratings with 4.3 on the Apple store and 4.0 on the Android store. So it's an optimized user experience via the tech. And as you can see, whether it's our daily soap Ici tout commence or Demain nous appartient, now we can see the strength of those programs when you have them. These are access shows on TF1 and then they are significant creation of traffic on the MYTF1 platform. And then of course the franchise like The Voice or La Villa des coeurs brises which is a more TV reality show. The convergence between TV and digital, let me take you through our belief through -- we have 2 key aspects. First, it's the development of our content offer on AVOD. So to make MYTF1 more than just a replay platform and have this hybrid model between free content and of course paid content. So MYTF1, it's really the question of having a right circulation of our rights and so it goes back to our acquisition policy and the resource allocation between what do we go for linear viewing and consumption, but most importantly for non-linear viewing. We have also launched through a new catalog a movies offer with over 100 movies, which will be offered by the end of 2022, so, which is new and attractive in the offer of MYTF1. MYTF1 Max, as I said, very successful launch, attractive offer and then now being distributed by [indiscernible] Telecom, Orange, SFR and Free, the major players in France in terms of ADSL offer. And finally of course we continue our partnership with M6 and the French France Televisions on the SALTO SVOD content player, which is doing fine. In term of the second aspect of this approach on convergence between TV and digital streaming is really trying to go after the younger generation. One of the idea is if there is more reach on television, linear television, nevertheless the audience is getting a little bit older. Through MYTF1, with good targeting, we are now attracting younger generation and especially through the social network. So here the story is growing footprint after Snapshot, Facebook and YouTube on 9 brands. We have monetization, so we have allowed to have extracts of some of our most popular shows, which we didn't allow before. Since April, we have gone into this offering and therefore a very powerful reach. And then of course at the end of '22, the whole deployment on TikTok like in many countries TikTok is growing very fast from one year to another. You're talking about a billion videos viewed in France and it's really about content maximization, especially with entertainment programs. As you will see later, we will be reintroducing one of the most popular show 15 years ago, which was Star Academy, training school for the young talent in a context and therefore, this will be very much deployed on all the social network, including TikTok. Regarding the diversification of our ad revenue streams, so as I mentioned in the first part, altogether EUR 815 million revenues. The dynamic on our advertising revenues is strong. Yet, you have dynamic sectors like finance, banking, travel and tourisms, which are bouncing back. However, cars and food are still segments and industries, which are watching their investments, decreasing their investment, therefore compensated by the others. And then on the right side of the slide, you have the ramp-up of addressable TV. So what is really important here is that it's the 302 campaigns to this point. 257 active advertisers, half of them are new. So for us it's new kind of medium and small accounts, which we normally don't attract on TF1 and which are coming through addressable TV, which confirms everything we have seen in the rest of Europe for countries which are more advanced than France. If we move now to the Newen Studios, a sustained activity from our recurring business, which is quite satisfactory. We were able to distribute, so HPI, as I mentioned, over 100 countries through Newen Connect, which is the name of our entity of distributing content. The daily soaps, of course, continue to be very unique, [indiscernible] characterizing both in France but also in the rest of Europe with the mention what we are able to achieve at Newen in link with stronger TV broadcaster. And then just on term of Reel One, so in Canada, the American and Canadian company, 36 TV movies were delivered. So, we are on our way to delivering over a 100 TV movie this year, which is a significant increase. I remind you that when we bought the company, they were producing like 50 TV movies a year. So it's a significant increase and we are very, very pleased with the performance. So the target of what we told you a few couple of years ago that one day 50% of the revenues of Newen would come from outside of France has been reached. Producing new and high content, of course, that's the name of the game for Newen. I mentioned the Gremlins, so this is the subsidiary in animation Blue Spirit for Warner Brothers. Liaison, I mentioned and Marie-Antoinette, which are produced by Ringside and Leonis in France. Capa and then for Viaplay in Tuvalu, it's in Holland, the Hunt for Jasper S. So these are really significant projects that we are very proud and which show you the diversity of the content that a group like Newen from now on can produce in Europe. It's also investments in talent with talent acquisition which of course is the basis for the growth of the company for the future. So here you can see Tomas Ocana, Joy Gharoro-Akpojoto for Joi Production, we call it our Joi. Real Lava, a very major production in documentary in Denmark. And then Flare, of course, it was our acquisition with Martin Heisler in Germany. In term of now the financial results, I'll let Philippe go and present our achievements.

Well, thank you, Gilles. Good morning, everyone. Moving on to the half year results, I will start with revenues for the TF1 Group. Consolidated revenue of the TF1 Group reached EUR 1,186.9 million, plus EUR 58.2 million year-on-year and plus EUR 42 million versus '19 same period. Revenues for the Media segment increased by EUR 45.1 million year-on-year. It reflects 1.6% increase in advertising revenue, that's to say, EUR 13.1 million year-on-year, thanks to the strong performance of advertising revenues in Q1 '22. Digital ad revenues are up by EUR 2 million due to significant increase of revenues from MYTF1 and a slowdown from our website ad revenues. Other revenues within the Media segment are up by EUR 32 million year-on-year. This results from a combination of strong activity as compared to last year in digital marketing, growing revenues from distribution and recovery from entertainment activities such as shows and concerts. Moving on to Newen Studio revenues, they are up by EUR 13.1 million year-on-year. Newen Studios activity benefited this half year from the positive contribution of Spanish and German Studios, Izen and Flare, which were acquired in '21. International revenue stand at EUR 84.9 million, up by EUR 28.4 million versus last year, of which EUR 21.1 million is due to a perimeter effect. As Gilles just mentioned, Newen's international activity now stand at 54% of total revenues contribution to the Group. Let's now focus on Q2. Revenues from the Media segment in Q2 '22 are up by EUR 4.1 million year-on-year. It reflects a 1.4% decrease in advertising revenue, that's to say, minus EUR 6.2 million year-on-year. The slight decrease is due to an unfavorable basis of comparison with the broadcasting of the Euro 20 Cup and it includes a perimeter effect of EUR 2.5 million with the disposal in '21 of website abroad, namely in Germany and in the State. Excluding the perimeter effect from the disposal of website abroad Q2 '22 ad revenues are up by 1% versus Q2 '19. Other revenues within the Media segment are up by EUR 10.3 million year-on-year, namely in our distribution and entertainment business, offsetting the decrease of advertising revenues. Moving on to Newen Studio revenues, they are plus EUR 2.6 million year-on-year. As we have explained before, Newen Studios activity benefited from the positive contribution of newly acquired European studios in Spain and Germany as well as pickup of activity in content distribution in Canada as Gilles has developed and mentioned. Moving now to programming costs, programming costs for H1 '22 totaled EUR 440.6 million versus EUR 466.4 million in H1 '21. They are down by EUR 25.8 million versus last year. This performance demonstrates our ability to control our costs and generate savings when necessary, while maintaining the powerful lineup and our leadership in audience ratings. To give you more details, we benefited from a favorable basis of comparison versus last year when we broadcasted the Euro 20. On top of this, in an uncertain context where we were anticipating some slight slowdown of ad revenues in June, we have been able to adjust or agree and make some savings to compensate. This also allowed us to broadcast high quality political shows covering the French presidential and parliamentary election as Gilles already said, as well as the ongoing situation in Ukraine. Considering the current operating profit amounted at EUR 188.7 million, up by EUR 19.6 million year-on-year and up by EUR 25.7 million versus '19. It leads to a margin rate of 15.9%, plus 0.9 points versus '21 and plus 1.7 versus '19. If we now look into the different segments, the current operating profit for the Media segment stands at EUR 171.3 million plus EUR 23.9 million year-on-year, leading to a current operating margin of 16.7%. The margin rate is up by 1.7 versus last year. It reflects the increase of top line revenues combined to the contribution of related activities such as distribution as well as effective management of programming cost, as I mentioned previously, especially in Q2. Please note that the current operating profit from last year included a 21 one-off tax benefit linked with the COVID pandemic. Newen Studios posted a current operating profit of EUR 17.4 million, down by EUR 4.3 million year-on-year and the current operating margin rate of 11%. Newen returned to its usual level of profitability in the first half of the year after the first quarter marked by the seasonality of its activity. Let's now focus on Q2 and the current operating profit amounted to EUR 129 million, up by EUR 16.8 million year-on-year. It leads to a margin as Gilles mentioned of 20.6%, plus 2.5 points as compared to '21. If we now look into the different segment, the current operating profit for the Media segment stands at EUR 114.4 million, plus EUR 13.8 million year-on-year, leading to a current operating margin rate of 21.1%. The margin rate on the Q2 is up by 2.4 points versus last year. Concerning Newen Studios, a positive current operating profit at EUR 14.7 million, plus EUR 3.1 million year-on-year and the current operating margin rate of 17.8%, plus 3 points year-on-year. This strong increase reflects the growth in revenues in Q2 and a positive contribution from distribution activities in Canada, as Gilles previously said. Now, regarding the consolidated income statement, I have already commented on the consolidated revenue, the cost of programs and the current operating profit per segment. Other charges, depreciation, amortization and provisions are up by EUR 64.4 million in H1 '022 linked to higher production cost from Newen Studios which acquired 2 new studios as already mentioned and the tax credit of EUR 21 million recognized in our June '21 account on this line. It is also explained by the pickup of activity in our entertainment business after first semester last year which was marked by COVID restrictions. Non-current expenses linked with the TF1 M6 merger project are recognized in our accounts for the amount of EUR 6.9 million. Share of losses of associated stand at EUR 12 million, down by EUR 1.4 million, which are explained by the investment in the Salto platform. The net profit attributable to the Group stands at EUR 126.5 million for H1 '22, up by EUR 18.1 million, plus 16.7%, in line with the increase of the revenues and the current operating profit. Let's now comment on the balance sheet of the Group. At the end of June '22 shareholders' equity attributable to the Group was EUR 1,812.5 million at end of June '22, out of total balance sheet of EUR 3,734.2 million. At end of June, we booked our assets held for sale, namely Ykone and the Publisher activity in both held for sale assets and operation and liabilities related to held for sales operation. No capital loss was incurred at end of June '22. The closing of the disposal of the Publisher activity is expected in the second half of the year. The Ykone deal closed yesterday. The Group reported net cash of EUR 245.2 million at the end of June '22. The decrease versus Q1 EUR 379 million is mainly due to the dividend payment and partly to higher working capital requirement than at end of March '022 which is a seasonal effect, as you know. The Group has a sound financial position with no debt and access to available bilateral credit facility of around EUR 1 billion. Now, if we now turn to the trend in net cash position for H1 '022, closing net surplus cash stand at EUR 245.2 million at the end of June '22, up by EUR 210.9 million year-on-year. The operating cash flow stands at EUR 287.4 million, despite higher results. The slight decrease versus last June is mainly due to a higher tax paid than last year during the same period. The negative figure of EUR 13.5 million in our change in operating working capital is mainly due to the increase for our program and content, it's a seasonal effect, and it is lower than last year, thanks to delivery of programs at Newen. The level of net capital expenditures is up by EUR 20 million, explained by higher investment in Newen linked with the integration in '21 of new studios and higher expected delivery in H2. The level of Salto shareholders' loan and dividend stands at EUR 122.1 million, mainly linked to the '21 dividend payment for around EUR 95 million as well as the financing of Salto for EUR 14 million. I will now leave the floor to Gilles to comment our ESG performance.

Yes. Thanks, Philippe. Yes, we thought we would take just one example of a strong commitment of the company on sustainability, as we know, it is very, very important to investors in today's world. As you know, through the ad sales teams that we have and of course the organization, we can definitely act and help to raise consumer awareness in term of sustainability. The way the Ecofunding has been set up was to tell advertisers, if your ad spot displays an environmental criterion recommended by the French authority which is ADEME and which has some label, energy level, repairability index, or environmental labeling, then your campaign will trigger a free contribution to a fund that we have set-up, which is a green fund and this funding in turn will finance an awareness raising campaign with good way of behaving in daily life, making the fact that then you can behave as good corporate and responsible citizen. The initiative we had set up was like a 5 million gross term fund for the year. When you look at the results, we are very pleased with the way we have been followed in this initiative. You're talking about now in 6 months, 25 campaigns. We are over 63% now of the target that we had set up. Most importantly, we have 14 advertisers and among those, as you can see, you have national brands, international brands, which have committed to the efforts. And at the end, you are talking about 193 awareness spots, which were broadcasted on TF1 Group channels and MYTF1, so which is our way as a showcase to contribute to responsible advertising, which I think is very important that we play an active role in this. If I move now to the outlook for the second half of the year and the years coming ahead. First of all, coming in September, a very strong lineup of back-to-school period with very strong brands. Of course, in fiction, we will have 2 major I think events, which will be Syndrome E, which is a fiction from a famous French author, Franck Thilliez which has great reviews. It is now in premier viewing on Salto and it does very, very significant reviews. Then there will be the big event for TF1 which will be Les Combattantes. Its first World War fiction with the same trio of actresses that we had in the Le Bazar de la Charite, the charity bonfire. It is again a partnership with Netflix. So, the major funding is done by TF1, but we see Netflix as a partner. So also highly visible program. And then of course, there will be of course the FIFA World Cup in Qatar. So this is end of November until mid-December. It will be exclusively on TF1 in France. The significant impact on our programming will be that, we will get 20 prime time viewing at 8 o'clock, so 4 weeks. This has never happened on our channel, meaning by that, that we will have to move forward the newscast, the 8 o'clock news to 7 or 7:15 news, but with a very unique program. And hopefully as the French team lately has been quite good and they are the world champion, we hope to a significant impact. Then there will be the return of the Star Academy, in a very modern and reinvented way. With 7 prime time events, it will be -- there will be one daily show in access. But most importantly, it will be live from the set from 4:00 to midnight every afternoon. So in term of recruiting teenagers, very important for this part of the population. So we have great hopes that it will create some very positive buzz. And therefore, as I said, using MYTF1 to attract a younger audience. In a conclusion, in term of outlook, as you can see, it's a strong lineup for the second part of the year, with of course, the World Cup and then all these major events and very unique content. More than ever, our belief in the convergence between television and digital is confirmed through expanding our reach with very agile resource allocation, in especially the 100 movies that you will have as a catalog on MYTF1. Significant deliveries, as we know that you don't like too much the fact that it is not a linear repetition through the quarters of deliveries for Newen. Here you can expect on the second half significant deliveries from Newen. So a good second half of the year. And then finally, of course, our plan of acquiring the M6 Group following the sale by RTL is going on. As you may have seen during the week, the 4 groups, both the shareholders and the 2 companies, issued a press release, mentioning how much in the first report of the competition authority's investigation teams, a number of significant competition concerns were raised and that generated of course some remedies which by their nature and their extent, as mentioned in the report, could mean that the merger plans that we have as they stand would no longer be meaningful to the parties. Therefore, would lead us to give-up on such major project. We do believe the fundamental of the project haven't changed. More importantly, while it is a very long process in France, the process has been followed up by the [indiscernible] and by the antitrust authority. The world has kept changing as we have seen with platforms and so forth. So therefore, we will go up to the end of the process, which is basically, first of all, providing the authority with some responses to this report in the next 3 weeks and then we will have hearings with the Board of the authority, which ultimately is the decision-maker and that will be held on the 5th and the 6th of September. And you can expect some final call and decision by mid-October. That's what we wanted to share with you this morning and we are now ready to answer your question with Philippe.

[Operator Instructions] The first question come from the line of Conor O'Shea from Kepler Cheuvreux.

Three questions from my side. Firstly, if you can maybe have some comments on the early bookings for the TV advertising in September. I think your peers said that so far they were in line with expectations. So, no major step change in the market. Can you confirm that's what you're seeing? Secondly, could you maybe comment a little bit on the thinking behind the disposal of the digital business in this quarter? Why you made that decision and what your digital strategy is going forward? And then thirdly, just on the merger, obviously seen the comments this week, but I understand that it's not unusual for the antitrust to not necessarily follow the opinion of their [indiscernible] team that this was what happened in the merger of Fnac and Darty. I wonder if you could just give some comments on what's your understanding of how that procedure tends to work in the majority of cases?

Okay. Well, on the bookings coming up, as you know, the summer is not the strongest months in advertising for anybody. So July and August are in that category. Europe, we have the women's Euro competition in soccer which is held in England. Unfortunately, we lost, France last night I guess Germany, but we were happy to see the French team going through the semis which they have never done in the past. So, for us it was fairly good news. I just saw the ratings, it's about 6.2 million people watched the game last night. So, we are very happy with this. This is beyond our expectation. Therefore, not bad for July. Of course, we have always the competition of Tour de France, et cetera, et cetera against us from the French public service. Looking at September, we see a normal trend, good trend. I mean, no weakening, particularly weakening of the market. And then it is too early to say about the last quarter. It's just the strong lineup we have, makes us really confident that except if there is a major recession that we haven't anticipated at this stage, because there is no reason to. Otherwise, we should have a good performance on the fourth quarter, given the lineup the world got, Star, all the other program I just mentioned. On the disposal of assets in the digital field, it is really coming to the conclusion that, one, if we enter back in, I'd say, '17, '18 into 2 major diversification at the TF1 level, which were on one side the production with the acquisition of Newen as a French studio and then developing, making a lot of acquisition and building up a very significant international group as you saw just now. Moving into digital and when I say digital, it was mostly display and special ops kind of digital portals was not as successful and very much endangered by the pandemic where all advertising stopped. Major play by the [indiscernible] with the Facebook and others changing the rules and affecting the capability of smaller players to play. The largest competitor in France Webedia is said to be for sale. So this sector has been significantly affected. So at the end of the day, as you know, a couple of years ago we took a write-off of EUR 75 million, which we did couple of years ago and the story was, what do we do with those businesses. In some instances, we had founders and like Gannett and Ykone that Philippe just mentioned, those founders wanted to keep developing their groups and those groups are in great shape. So they were attractive to different investors. In one side, Gannett was HLD, which is the Lagardere Group which we were happy to sell with the 2 founders staying on board. Ykone will be the same with business group out of Saudi Arabia, which has been also closed today or yesterday. And these have no impact on our accounts. So we are pleased with that. And then the Publisher group, which was all the major brands that we had acquired from Lagardere, from aufeminin from Axel Springer et cetera. Once they were consolidated, we created a unique advertising platform, an ad sales team. We created a unique data platform. Altogether, they became a little group, which was an entity in itself with strong brands like Marmiton, like Aufeminin, like Doctissimo, health, food, female attention. So all that was attractive to several buyers. And at the end, [indiscernible] came up with a very good price, significant offer. They are located in Boulogne next to our offices, so no trauma for the teams. They are committed to keep all the people, which was also important for us. So at the end we closed -- this deal, we should be closed by December. So, it's one way of re-configuring our group. It's making also cash entries into the Group. So, you will see that at the balance at the end of the year which will put us in a position of reinvesting in other businesses, in production, certainly, which remains a key area for us, enabling us also to grow in technology, whatever all the -- thanks to follow the strategy, mainly focusing on streaming and linear content. Finally, on the merger, yes, you can't count on me to give you some percentage of chances that whether the Board will overtake the report from the services. Yes, there are a few instances where the Board contradicted maybe the analyzes of the services, but they are very few. So, most of the time the Board follows the recommendation of the services which seems fairly logical. What we will be trying to do is to keep up, making the education, making the Board sensitive to all the issues which are raised. From now on, we see the move of platforms like Netflix changing their policy, moving suddenly to advertising when I think nobody in the investment world, in investment community or in the consumer world could ever imagine that -- these things would go after advertising after all those years of being a very significant SVOD player with no advertising and only based on subscription. We just saw that Facebook sales decrease, which is new. We always thought that the trees will go to the sky. So, there are significant changes in the environment. The pressure for talent is still very much on. So the fundamentals of the analyzes of Bouygues saying, upon our recommendation at TF1 saying, we should commit, we should consolidate, we should build on, we should make alliances and let's try to make this acquisition work remains intact. Yet, at some point, if we cannot convince or if for the authorities, it is certainly too early for them to recognize those changes in the relevant market, which we are competing in. It is no more linear television. It is not only linear and non-linear television and digital, but those markets are really converging significantly. We hear that every day from advertisers. We see that in their behavior. Maybe we are not capable of convincing this time, but we know that's coming up. That's what is ahead of us. So we will have one last run beginning of September and then the Board will make its decision.

Okay. Right. Just wanted to follow up on that, on the changing environment. And over what timeframe do you think that the arrival of Netflix with the advertising product have a material impact on the French TV content?

Material, we don't know yet, how success they will be. But I think what -- at the latest, we're talking about in France because I don't know if it's a rollout throughout the world, but I think we're talking late '22 or '23. I think that's what we would be looking for.

[Operator Instructions] There are no further questions. We have now come to the end of this Q&A session. Thank you for joining today's call. You may now disconnect your line.

Thank you to all of you and have a good summer.

Thank you. Bye-bye.