August 7, 2019 / 5:50 AM / a month ago

UPDATE 2-ProSieben growth story intact despite Q2 profit squeeze

* Revenues up 4% but core earnings squeezed by investments

* Guidance confirmed for 2019

* New streaming venture Joyn has 3.8 million users

* Now not the time for closer tie-up with Mediaset - CEO (Updates with Mediaset angle, CEO interview)

By Douglas Busvine

FRANKFURT, Aug 7 (Reuters) - German broadcaster ProSiebenSat 1 Media on Wednesday showed its recovery was on track as it sustained top-line growth in the second quarter, even though core profits were squeezed as expected by spending on new programmes.

CEO Max Conze, in the job for just over a year, highlighted double-digit growth at Munich-based ProSieben's content production, e-commerce and digital advertising operations, which more than offset a 3% slide in its core TV ad revenues.

The former boss of British home appliances maker Dyson said he was open to cross-border cooperation as ProSieben develops its streaming, e-commerce and digital advertising ventures.

But he played down the near-term prospect of a closer tie-up with Italy's Mediaset, which has expressed interest in a possible merger, saying both needed first to execute on their strategic plans.

"We are going to be busy with this for the rest of the year," Conze told Reuters in an interview.

ProSieben confirmed its guidance for the full year, with an EBITDA margin goal of 22-25% and a mid-single-digit percentage increase in revenues.

Conze has sought to recast ProSieben as a digital media and commerce powerhouse capable of withstanding the viewing revolution wrought by streaming services like Netflix.

JOYN US

In June, ProSieben launched its own streaming venture with Discovery Inc, called Joyn, which has attracted 3.8 million active users across all devices and counts 2.4 million installed apps.

A premium version of Joyn will be launched at the end of 2019. Conze said ProSieben was exploring pricing options and whether to make the product ad-free - along the lines of music streaming service Spotify's premium option.

ProSieben wants to attract 10 million users to Joyn - which carries 55 German channels and allows viewers to catch up on shows - within two years. It will look in 2020 at launching the platform elsewhere in Europe, he said.

The company has also won antitrust approval for a 50-50 joint venture with competitor RTL Group's German unit, called d-force, that will make it easier for customers to target viewers with "addressable" advertising based on their profiles.

ProSieben shares gained by 1.6% on Wednesday but remain down by 23% in the year to date as investors wait to see if Conze's turnaround strategy will feed through to the bottom line.

ProSieben earlier reported a 4% rise in quarterly revenue, even as adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) fell 18% as it invested in freshening its range of local programming.

It achieved its best ratings for the quarter in four years as "The Masked Singer", based on a Korean entertainment format, attracted an audience share of 38% for its finale.

Addressing options to realise shareholder value, Conze said that ProSieben was still contemplating a float of Nucom or individual companies in its portfolio that span dating, price comparison sites and adventure tours.

A stock market listing would probably come later, however, enabling ProSieben to realise a "maximum" valuation, he added. ProSieben sold a one-quarter stake in Nucom to investor General Atlantic in early 2018.

Reporting by Douglas Busvine Editing by Michelle Martin and Jane Merriman

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