Hello, and Welcome to the TF1 Q1 2022 Results. Please note this conference is being recorded, and for the duration of the call, your lines will be on listen only. However, you will have the opportunity to ask questions at the end of the presentation. This can be done by pressing star one on your telephone keypad to register your question. I will hand over to our host, Philippe Denery, Chief Financial Officer, to begin today's conference. Thank you. Thank you. Good evening, ladies and gentlemen. Thank you for joining us. I will start with the main key points, and I will give an overview of our results for the Q1 of 2022. Then I'll be pleased to take your questions. Well, as an introduction, I would say that the year has started rather well for the group. The demand on the advertising market is sustainable, even if we have to compete strongly with digital players. Demand on content remain well-orientated, both on the French market and in Europe. All together, the Q1 posted a growth of our consolidated top line of 10% as compared to Q1 2021 Q1, and a growth of a bit around 1.5% as compared to the Q1 2019. We started during this quarter to measure in our figures impact of decisions taken in 2021 with a growth, progressive growth of the addressable TV, the first impact of MYTF1 MAX, the combined, TV digital, advertising offer, as well as the impact of the renewal of our contract with telecom operators. We keep a good cost control with the programming cost at a level of EUR 220 million, which are a bit above the last year, same quarter, + EUR 9 million, but which remains lower than the Q1 2019. We have tried to optimize our investment in programs on a consumption which is now linear and nonlinear. The profitability of the group is at a good level for Q1 a bit less than 11%. If the profitability of the studio sector is a bit down, it is an explanation linked with the mix of program which have been delivered during this Q1, and especially abroad, which explain this profitability, but which doesn't change the target of a level of profitability comparable to what has been achieved last year. At the end of March, the group benefit from a cash position positive of EUR 380 million, which secure the future. Now, let's move more in details on the financial results for this Q1. As I mentioned, group revenues stand at EUR 561 million. They are up by EUR 51.5 million compared to the Q1 2021, and plus EUR 7.6 million compared to Q1 2019. Ad revenues performed well in Q1 2022, +EUR 19.2 million versus last year, +5.4% for all ad revenues for the whole group. Demand remains positive across most sectors. I would like to point out that revenue from other activities are up by EUR 32.3 million year-on-year, +21.3%, and +EUR 25.4 million versus March 2019, +16%. This performance illustrates the group's capacity to extend its core business to complementary services, leading to distribution and production revenues. The current operating profit stands at EUR 59.6 million +EUR 2.8 million versus last year. Thanks to this, the group delivered growing operating profit of +4.9% and a solid current operating margin at 10.6% end of March, as I mentioned already. If I summarize the results at end of March, media revenues rose by 9%, thanks to EUR 19.3 million increase of ad spending on our linear and nonlinear screens. Investing in high-quality content on all our channels has helped supporting top-line growth in advertising revenues, as well as in distribution revenues, thanks to the services provided through telecom operators and OTT Access. Profitability of this segment is 11.7%. The Newen Studios segment posted revenues of EUR 75.8 million. They are up by EUR 10.5 million at end of March, plus 16% increase in a market where demand for content is high. Profitability decreased versus last year, as I already mentioned. It was a very specific quarter last year. The performance which was mainly due to a delayed cycle of production due to COVID-19 in 2020. If I commence the media segment specifically, revenues rose by EUR 41 million year-on-year, with an increase of the operating profit of EUR 10 million. Advertising revenues for this segment are up by EUR 19 million year-on-year. The positive trend on the TV ad market observed at the end of 2021 continued in Q1 2022, and especially driven by progressive reinvestment from some sectors like travel, tourism, cosmetics after the COVID crisis. This growth is also explained by the capacity of our ad sales house to work on improving the value of our screens as a means to optimize inventories. Digital ad revenues rose by 8.2%, driven mainly by MyTF1. This line includes of course, our website as well, complementary to MyTF1. The other revenues within the media segment are up by EUR 21.7 million, led by higher activity in the distribution segment following the renewal, as I already mentioned, of distribution agreements and the development of new consumption services. Regarding programming cost, the group has shown again its ability to adapt to opportunity, and we have invested a bit more than last year, in a quarter marked by heavy political and geo-political news flow. Moving to Newen Studios segment, revenue stand at EUR 75.8 million. They increased by 10.5%. This growth is mainly due to the impact and the contribution of our Spanish and German studio, which were acquired in 2021. After Q1 2021, which was specifically marked by a catch-up effect of the COVID and more delivery than usual at the beginning of the year, last year. Newen Studios returned to a quarter, which is a more normative quarter in terms of activity and in terms of profitability, even if we confirm the target and the profitability we had last year. Several products have been commissioned by international platforms and confirmed during the quarter. The order book is at a high level and demonstrates the group know-how and its ability to respond to the demand in content. Just a quick word on the net profit. The net result attributable to the group stand at EUR 34 million for the Q1 of 2022, including investment in Salto, and this level is similar to Q1 of 2021. Regarding the cash position, I already mentioned the net cash position of EUR 380 million at end of March, compared to net cash of a bit less than EUR 200 million end of December of 2021. In 2022, the media segment should benefit from the development of new consumption habits, as well as the extended offers provided by our sales house to our client. Data and consumption services such as MyTF1 and MYTF1 Max will positively contribute to the top line and the profitability of the group. Newen Studios contribution to group operating profit will remain accretive in 2022, where new orders, namely with platforms, have already entered the order book. Regarding the Ukraine conflict, the TF1 Group considered that at end of March, the business is not directly impacted by this conflict. However, the evolution of the conflict might have an impact on the European economy and indirectly on our business. As it did in 2020 and 2021, the group will show adaptability and apply close monitoring of costs in the following months. Well, that conclude my review of TF1 Group's results for the Q1. Well, thank you again for having joined us. Should you have any question, please do not hesitate to ask. Finally, I remind you that the recording of this conference call will be made available on our website. As a reminder, if you would like to ask a question or make a contribution, please press star one. The first question comes on the line of Christophe Cherblanc of Société Générale. Please go ahead. Yes. Good evening, Philippe. I had a few questions. First one was on EBIT. I understand that there was a gain from Molotov in Q1. Is that the case, and is it included in the Q1 current operating income? That's the first question. The second one is on Newen. It seems Plus belle la vie is going to be discontinued. So I had in mind it was about EUR 30 million of revenues. Is that the right order of magnitude? And what would be the impact on the profitability of Newen? And the last one is on Netflix. I'm sure you saw the news flow on Netflix. There are two sub-questions. One is what is your estimate of the viewing time of Netflix in France? Do you believe they will launch an advertising business in France? Lastly, it seems they are going to reduce their spend, so do you think that might have an impact on Newen as of 2023 in a negative sense? Thank you. Well, thank you, Christophe, for your question. In terms of Molotov and your first question, yes, it is, it has been partly included in our EBIT for the Q1. Molotov has some impact on the result, limited, but it has. Second point, on Plus belle la vie. Well, we are still negotiating with France Télévisions, and finally, we'll see what decision will be taken. There should not be significant impact on 2022, even if, depending on the result of the negotiation, there will be some. We will compensate, and we'll try to compensate on the long term, the impact if they decide to stop the broadcasting of Plus belle la vie. We do think that brand is a strong brand and that we could find other potential client in a form or another. In terms of magnitude, you are right on the top line, in terms of magnitude. But on the mid long term, if the decision is taken by France Télévisions to stop Plus belle la vie, we will find ways to compensate and to keep the level of profitability globally on the market. Well, concerning Netflix, well, I would say that I have no specific estimates in terms of time. In the past, what we've seen is that France is not a priority for Netflix in terms of implementing new ways. I don't know. I can't comment on that, but I would say that it would take some time, bit of time, and I don't think that Netflix is focusing specifically on France or will start with France, but we'll see. It's in line with what we have already anticipated in a certain way through moves which have been our move during the last two or three years and future projects we are considering. Now concerning the last part of the question, well, we are working with Netflix, of course, on a regular basis, but not only with Netflix, with all platforms. Second point is that when Netflix is investing in let's say investing globally, they give figures and investing both in fresh and in catalog. We don't think that platforms can offer or can limit the level of fresh content they have to invest in. As a result, we don't see significant impact of Netflix's intention to reduce their investment in fresh programming. That if it would be the case, that would impact not only Newen clearly, but we don't see this as a risk because the demand for content and strong content and local content should remain at a high level. Just to be clear on Molotov, you've taken half of the amount and you will take the rest in Q2 or Q3, depending on the appeal or how it is going to work out? It's going to work out, but I can't mention any kind of figure at this stage. I'm just saying that, yes, of course, it has impact in Q1. We will see during the year how things are going on. We are negotiating with them, and it's fair on my side to say that I can't give any kind of more indication on this, which is part of our cooking secret, if I may say. Okay. Thank you. As a reminder, if you would like to ask a question, please press star one. The next question comes from Julien Roch of Barclays. Please go ahead. Oui, bonsoir, Philippe. My first question is on ad trends. Can you give us some indication of what's going on in April and May. Second question is, could we have a sense of the flexibility of your cost base? There's a lot of macro uncertainties, war in Ukraine, lockdown in China, elevated inflation in the West. There's a chance that advertising slows down or goes negative, sometimes towards the end of the year or next year. What's the maximum, you know, if we go into a recession and advertising turns negative, what is the kind of maximum cost-cutting you can do? And after that, you know, the drop through becomes almost 100%. Thank you. Thank you, Julien. In terms of ad trend. Well, from what we see, first of all, because of the situation of course, the visibility which had improved in Q4 is now very low and come back to a situation where the visibility is very low. That's due to, of course, the situation and specifically in specific sectors like, of course, car industry, food and even cosmetics where the visibility is very low. What we can say is that to date we don't see negative sign. The demand remain at a level which is rather comfortable, that there are sectors which are coming back after COVID, bank insurance for instance, as well as all the restoration with more investment than in the past, retails as well. Basically, I would say that from what we see today, no negative sign and a trend at this stage, which is more or less what we could expect. We are fully aware of the fact that it could change very quickly. That of course, if the situation would impact the European and especially the French economy, well, might impact as well, of course, the advertising market. We'll see. At that date, I can't give you more than not large visibility and no negative sign on April. We manage, depending on which sectors, to offer to advertisers inventories which remain very attractive. Now, concerning our flexibility on costs, I would say that if I refer to what has been done in the past, which is probably the best benchmark we can say, and more credible benchmark because it has been done. You remember that in 2020 we have made EUR 150 million savings on our programming cost for the whole year. Of course, that is not the right answer, just because of course, there was specific situation which will not occur, because we're not facing the same situation in terms of crisis, pandemic and lockdown. It's not comparable to a war in Europe and an economic impact. If I may say, as I already explained last year, as part of those EUR 152 million, there was one-off situation corresponding to around EUR 50 million. Basically, I've said, well, we have to forget the flexibility and basically the basis of EUR 900 on programming costs, a bit less, a bit more is probably the right benchmark. Roughly, I would say the flexibility is probably between 5%-7%, which in terms of profitability is consistent with what has already been achieved and give you a kind of framework. I will just add that, and that's the case for all of us, the flexibility is every day lower than the day before, and that we have less flexibility in December than in January. It's obvious, but I just prefer to mention it because of course, it's part of the answer. Even if the question is really and the good question is basically and we are focusing on it, is basically to adjust to the top line when the top line could be a bit lower. Okay. Thank you very much for this answer, Philippe. Follow-up. You said 5-7% of programming cost flexibility, which is a very useful answer. You said less flexibility in December than in January, which is a logical answer. Is the 5-7% in January, and then, you know, at the end of the year is zero? Or where would you know, some kind of timing on that. Then when you say April, no negative sign, not surprising, that doesn't give us much of a number. Are the trends similar to Q1 year-on-year or- I mean, any more color you can give us. Thank you. Well, on the flexibility, I would say that 5-7 to what remains, but the flexibility is. You remember what we have given in terms of indication when we were, you know, 2021 in a crisis. The flexibility is linked with the conversion of what we deliver in terms of top line and what we deliver in terms of savings. Basically, I would say that there is in our business, the savings has to be in line with the top line through our capacity to adapt to the situation. That's what we've done, and that's what I give you is not a kind of guidance, definitely not a guidance for the future. I'm just saying what has happened in the past shows that based on what we can spend or what remain to be spent, if the top line would be, I would say, lower than expected. Yes, we have a flexibility on what has not been spent at a level which remain between 5%-7%. Now back to Q1. Well, the basis of comparison is, well, probably the trend we had, I would say in Q1. But just to add that, of course, the basis of comparison is different. I remind you last year that, of course, the basis of comparison is not valid because we had an increase of 72.5% growth in Q2 2021 as compared to 2020. Sorry for that because I'm sure that it's on all business and for all group the same, but we are a bit and that will be the case for Q2. We have a basis of comparison, which doesn't make sense sometimes because of the situation the previous year. I have to admit that my answer is not very clear, so I'll try to be a bit clearer. I would say that the basis of comparison of Q2 and April start Q2 is rather high in terms of performance. But in terms of demand, in terms of trend, we are in a trend which remain, I would say globally positive. Okay. Merci beaucoup. Currently not at a level compared to the Q1 because of the basis of comparison. Thank you. We currently have no questions on the line. If you would like to ask a question, press star one. The next question comes from the line of Conor O'Shea of Kepler Cheuvreux. Please go ahead. Yes, thank you. Good evening, Philippe, everybody. Yeah, just to follow up on that question from Julien. In terms of the Q2, I understand it's early at this stage, but looking at the absolute value of advertising revenues, last Q2, which was well up on 2019 levels, you know, can you give us a sense of the range Q2 2022? Are we looking at maybe above 2021 levels or between 2019 and 2021 at this stage, adjusting for kind of one-off factors like Euro 2020 last year? Is that maybe a way to look at it in terms of absolute terms? That's the first question. Second question, just on Salto. Sorry, on Newen. Could you just in terms of the, you mentioned I think all the growth came from consolidation of the Spanish and German acquisitions. Was that also a factor in terms of the profitability, were there integration costs or something related to that to explain the very low margins in Q1 or is that a seasonal effect? Second question, then the third question is can you say anything about Salto and the subscriber numbers year to date if that has picked up from the year-end level? Thank you. Well, yes. Well, on your first question, I just remind you figures for Q2 2021 and Q2 2019. I don't comment on 2020. We have posted advertising revenues of EUR 441 million in 2019 Q2, and EUR 444 million in Q2 2021. So basically, stable 2021 compared to 2019. We've said we come back in Q2 as a situation comparable to pre-COVID-19. I definitely can't give any figure for Q2. We have no visibility, and it wouldn't be serious based on information I have today. Without and in such circumstances, whatever question you have to give you what could be Q2 in terms of figure. I'm sorry about that, but very. No problem. Very low. I would just say that April is in line with what we had in April of 2021 and April 2019. That's what I can say more or less. At this stage, I definitely can't say more. Second question was on Newen and give you a bit more explanation on what has happened during Q1 in Newen. Yes, the growth is coming mainly both from acquisition of Spanish and German business. First, because the basis of comparison last year on the rest was very high, and we had said last year that it was really a one-off, both in terms of what we had delivered in Q1 of 2021 following the COVID period and as well as in terms of profitability. Now, that's the first point in terms of basis of comparison, and that is the reason why we are stable, slightly down, everything being the same apart from the acquisition we made during 2021. Now, apart from that, we have moved, and I remind you that we had a studio which was five, six years ago, mainly focusing on French market. Hundred percent of the top line was on the French market when we acquired Newen. Second point, mainly on French drama. Now we are in a type of genre, as we have tried to explain and develop previously. We're in type of genre which are very different, and a combination of international and local. International business is now 52% of the top line, 48% on the local, mainly France. In diversification in genre program, you amplify the seasonality of the profitability. I just take only one example. The example of Téléfilm de Noël. Christmas Téléfilm are not delivered in Q1. They have good profitability, but that is not in Q1. The mix of program Newen deliver during the year has a bit changed and is less linear than it used to be with daily soap. When you contract for a daily soap, you get part of the margin and the EBIT on a regular basis as long as the contract exists. That's a good part of the explanation. We are rather confident that there is no reason, having the order book of Newen, that the trend will be in line with what we have delivered last year. To come back and to end with Salto. Well, I can't. I'm not allowed to give any number of subscribers. Salto is a full function company, and as a rule of the Autorité de la concurrence, I can't give any figure on Salto for the number of subscribers myself. I just would say two things. Salto performed in line with expectation, and they have increased their subscribers on a regular basis. Second point is to say that, of course, they remain distributed only at this stage by one telecom operator, but they have not signed any agreement with the three others, still discussing with them, which doesn't help at this stage. We are still confident that will move. They have announced, as you probably have seen, that they will have a deal with Amazon, which should give them opportunity to develop the business during the next following part of the year. Okay. Understood. Very clear. Just one follow-up question on non-advertising media revenue, which was up strongly as you alluded in Q1 from the new retransmission deals at a higher price. If we look at that seasonally into Q2, should we expect, can you just remind for the timing of the renewals as to whether we should expect a similar uplift or again in absolute terms, I think you did about EUR 108 million non-advertising media revenues for Q2. Seasonally, would you expect. Is that a good starting point for Q2 or seasonally could it be a bit higher? Well, the growth in this segment is partly due to distribution revenues and, or part of it is a consequence of the contract we've signed with telecom operators, which is sustainable during the whole year. Another part is coming from services to advertisers, which is a business which was originally on the previous unified segment, and which is mainly due to what we call influencer, which has very well performed during this quarter, but which will not perform necessarily the same way quarter per quarter because of the nature of the business. That is something which is not regular, linear, and you can't expect to have this every quarter till the end of the year. Complementary to that, we have music and theater, which are coming back to a situation which is more normal compared to what it has been during the last two years, and which participate to the increment of this, but in a way which is progressive, limited, and will not be significant quarter per quarter. Hopefully, the situation will come back to something comparable to 2019, last quarter of the year. Was the settlement with Molotov that Christophe was alluding to also in that revenue line in Q1? No. No, it's not. Okay. No. Great. Many thanks, Philippe. The next question comes from the line of Jérôme Bodin of ODDO BHF. Please go ahead. Jérôme Philippe, good evening. You just asked my question on the other revenues, so. Fine. I was pleased to answer before you ask a question. Thank you. Thank you. Have a good evening. Any other question? The next question comes from the line of Thomas Courbe. Please go ahead. Yes. Good evening. Thanks for my question. Actually, I have two on the inflationary context. First, as far as your cost base is concerned, can you please disclose how you are exposed, how much you are exposed to inflation concern, as far as energy or salary costs are concerned in particular, and where you stand in terms of renegotiation of salaries? Second, on the other side, as far as your top line is concerned, do you have an idea or an opinion on the sectors that could be the most impacted by a strong inflationary context and the share of your top line that could be at risk given the circumstances? Thank you very much. Well, on the context and the inflation, I would say that we are not directly impacted by energy inflation, very limited in our business, except indirectly through advertisers, which are themselves linked with energy. But on the P&L of TF1, I would say in terms of cost of TF1, no significant impact. We have no significant impact. We have possible impact on salaries. I just remind you that the staff cost in the P&L represent around 15% of the total cost. So it has some impact, but it remains at a level which is, I would say, acceptable. In terms of inflation on program, we don't see any impact due to inflation of gas, oil, electricity on the way we produce. That's what we can say. The impact of the situation is more on the economy and indirectly on the possible impact on the advertising market. Concerning now the different sectors which could be impacted, clearly there are two sectors which are already impacted and which are the food sector, and you know the problem of the whole food sector in Europe as a consequence of what has happened in Ukraine, as well as the car industry, which has been impacted by raw materials and so on, but is also impacted, of course, by energy and the consequence of the situation. Well, apart from that, I would say that those are the two main sectors according to us which could be. We are focusing on just to see how they will behave and what they will invest. Okay. Thank you very much. But you've already seen this impact, as you said. All your comments on the current advertising trends in April already include these impacts on these two sectors. On those two sectors, food and car industry, we have seen the impact in Q1 already. Not necessarily in April. We have seen the impact from the beginning of the war and the situation. The trend of those two sectors in 2022, quarter 2022 are investing less, have been investing less than previously. Now I would say that other sectors, again, like retail, like restoration, like bank and services, are investing more to compensate. We have no specific reason to think that or we have an impact on major other sectors. Okay. Very clear. Thank you very much. We currently have no questions on the line. If you would like to ask a question, please press star one. Well, if there is no more question, I wish you a very good evening, and I thank you for attending the call today. If you have any specific question, the Investor Relations team is always available. Thank you for joining today's call. You may now disconnect. Thank you.