Cfa presentation team_d (1) (1)

Kyiv National Economic University
Bogdan Pavlik, Andriy Vernygor,
Daria Gontar, Tetiana Vozniuk, Tetiana Ohrimets

Long-term revenue stable growth of 2%
CAGR in 2014-2018COUNTRY: LUXEMBOURG
RECOMMENDATION: BUY
CURRENT PRICE: €77.00
TARGET PRICE: €89.5
1
CAGR in 2014-2018
Rapid TV-web applications evolution
New expansion opportunities
Level of risk: medium
Cash Flow growth of 6%
COUNTRY: LUXEMBOURG
STOCK EXCHANGES:
FRANKFURT, BRUXELLES,
LUXEMBOURG
TICKER: RTL
Q&ARisksValuationFinancial analysisIndustry overviewBusiness overview

Industry
overview
Business
overview.
Financial
analysis
Valuation Risks
1 2 3 4 5

2Segmentation & Audience share
Group M6
22.5 %
French Radio
18.3 %
RTL Deutschland
30.6 %
RTL Belgium
36.4 %
RisksValuationFinancial analysisIndustry overviewBusiness overview
RTL Netherland
33.5 %
Other
around 30 %FremantleMedia
8,500 hours
350 programs
62 countries

3
TV
RTL Group
ABC
MTV
Samsung
Sony
Philips
FremantleMedia
Ray William Johnson
Nigahiga
YouTube
App store
Facebook
Value chain
Content Aggregation Distribution Devices
MCNs
BroadbandTV
Maker Studios
Fullscreen
Disney
Warner Bros.
FremantleMedia
Comcast
Sky
Freeview
Apple
Android
Windows phone
PC

Industry
overview.
Business
overview
Financial
analysis
Valuation Risks
1 2 3 4 5

Competitive position 4
Belgium
RTL – 36.3%
RTBF – 18.6%
Netherland
RTL – 32.3%
SBS Group – 20%
India
Main competitors – 75%
France
RTL – 22.9% / Radio – 13%
TF1 – 33.3% / NRJ – 12.6%
Germany
RTL – 33.7%
Pro7sat1 – 32.5%
Hungary
RTL – 37.3%
TV2 Group – 19%
Croatia
RTL – 27.5%
NOVA – 23.9%

Key market trends 5
Broadcasting Content
Platforms
High potential for
broadcasters:
distribution fees from
platforms
Structural changes
Increasing importance
of the rights to the
content because of
structural changes in
the TV industry
Broadcasting Content Digital
Advertising
Tendency to growth on
demand for television
advertising
Reducing risk
Broadcasters may reduce
risk by filling air time with
content which has a track-
record.
Fragmentation
Increasing demand for
content because of
fragmentation of the
digital channels and
emerging platforms

Industry
overview
Business
overview
Financial
analysis.
Valuation Risks
1 2 3 4 5

6
CAGR=2.13%
2001
2086
2220
2013 2015 2018
Revenue analysis by divisions
CAGR=−2.33%
1383
1319
1229
2013 2015 2018

Revenue & margin analysis 7
24.10%
26.09%
19.56%
21.77%
16.10%
16.61%
12%
14%
16%
18%
20%
22%
24%
26%
28%
Level of margins, %
5765
5998
5889
6013
6140
6269
6401
6536
Revenue growth, €m
1,8%
10%
2011 2012 2013 2014 2015 2016 2017 2018
EBITDA margin EBITA margin
Net margin
2011 2012 2013 2014 2015 2016 2017 2018
RTL Group revenue
TV advertising markets across Europe continued to show signs
of improvement. New TV channels strengthen RTL Group’s
family of channels
Average annual growth is equal to
1.8% and represents the good
tendency
FremantleMedia Nth-Am recently launched digital content
studio. RTL Group completed the acquisition of a 65% majority
stake in the video advertising platform SpotXchange.
After some deterioration in 2014
we expect the increasing in all kind
of margins

8
28,5%
35,2%
26,3%
+9 p.p.
DuPont analysis
2013 2015E 2018E
ASSET TURNOVER
INTEREST BURDEN
FINANCIAL LEVERAGE 211% 222% 241%
103,9% 100,17% 99,44%
78% 84% 90% +12 p.p.
- 4 p.p.
+30 p.p.

Industry
overview
Business
overview
Financial
analysis
Valuation. Risks
1 2 3 4 5

10
14.81% 16.61%
23.60%
26.09%
0%
10%
20%
30%
40%
50%
2014Е 2015Е 2016Е 2017Е 2018Е
Margins Comparison, %
Net Margin EBITDA Margin
5,600
5,800
6,000
6,200
6,400
6,600
2014Е 2015Е 2016Е 2017Е 2018Е
Revenue, €m
8.6%
Valuation forecasts
0
50
100
150
200
250
300
350
400
2014Е 2018Е
Taxes, €m
+18%
294
Net Margin EBITDA Margin
2014E 2015E 2016E 2017E 2018E
431
300
200
100
0
-178
-52
+183
+184
Working capital, €m
+46%

11
0
100
200
300
400
2014Е 2018Е
CapEx, €m
1%
Capital Expenditures are set
to increase
RTL GROUP enters new markets
EBITDA MARGINS rise
CapEx VS. Cash Flow
RisksValuationFinancial analysisIndustry overviewBusiness overview Q&ARisksValuationFinancial analysisIndustry overviewBusiness overview
0
100
200
300
400
500
600
2014Е 2018Е
Free Cash Flow, €m
+13%
TV content launching
CASH inflows to progress

12
Slow GDP growth
%
Discount rate
6,13%
Enterprise Value
17,286 €m
PV of Terminal Value
14,423 €m
UPSIDE
17%
DCF assumptions
TGR = 2% BUY
Equity Value
13,886 €m
14,423 €m
Net Debt
3,400 €m
PV of Cash Flows
2,863 €m€
€

13
SXXP Index0.8
SPX IndexBeta
0.83
DAX Index
1.07
0.65
German 10Y
government bond
Rf = 1,34
Cost of equity = 7.4%
Cost of debt = 1.7%
WACC
6.13%
Equity risk premium: 7.3%
Tax rate: 26%
Share of Equity: 77.8%
Share of Debt: 22.2%
After-tax cost of debt: 1.2%
WACC calculation
WACC
TerminalGrowth
Rate
5.6% 5.8% 6% 6.13% 6.4% 6.6% 6.8%
1.7% € 95.15 € 90.25 € 85.80 € 82.96 € 78.00 € 74.57 € 71.40
1.8% € 97.84 € 92.68 € 88.01 € 85.04 € 79.86 € 76.28 € 72.98
1.9% € 100.67 € 95.24 € 90.33 € 87.22 € 81.80 € 78.06 € 74.62
2% € 103.66 € 97.93 € 92.77 € 89.50 € 83.82 € 79.92 € 76.34
2.1% € 106.82 € 100.77 € 95.33 € 91.90 € 85.94 € 81.86 € 78.12
2.2% € 110.17 € 103.77 € 98.03 € 94.42 € 88.17 € 83.89 € 79.99

Enterprise value:
13,640 €m
Enterprise value:
3,234 €m
Share price:
12.82 €
Enterprise value:
10,902 €m
14
Societe Television
Francaise 1
Peers valuation
Share price:
123.11 €
10,902 €m
Share price:
34.80 €
ProSiebenSat.1
Media AG
Kabel
Deutschland
Holding
Price range of RTL” Group : € 65 - € 124

15
Share
price 2013
Share
price 2014E
Share
price 2013
Share
price 2014E
EV / EBITDA calculations P / E calculations
Multiples valuation
UPSIDE
17%
€ 0.00 € 57.11 € 87.55 € 123 € 166.9 € 0.00 €69 € 73.7 € 103 € 136.1
BUY

Industry
overview
Business
overview
Financial
analysis
Valuation Risks.
1 2 3 4 5

16
MediumHigh
Regulatory risk
Market risk
Taxation
Financial risk
Changes in the intellectual
property
Currency fluctuations
PROOBABILITY
Risk matrix
Insignificant Moderate Severe
Low
Operational risk
Decrease of audience share
Reduction in barriers for
new competitors
Negative macroeconomic
conditions
Technological failuresIMPACT
PROOBABILITY

17
Legislative restrictions on
licenses and increase in the
tax expenses
Managed by developing
and exploiting new revenue
sources
Foreign currency fluctuations
Managed by using foreign
exchange forward contracts
Analyzed risks
Decrease in audience and
advertising market shares
Managed by expanding
new markets

18
digital programmatic advertising
distribution at global scale
17%
upside
Upside split
HD technical potential
Base price
€77
Current price
€84
Target price
€89,5
Drivers

19
250
300
350
400
450
Frequency
1 Std
Dev=59.3
Mean =
87.95
- 1 Std
Dev=80.6
Median =
87.89
Monte Carlo simulation
0
50
100
150
200
67.71 77.48 87.25 97.02 108.18
Frequency

THANK YOU FOR ATTENTION!THANK YOU FOR ATTENTION!THANK YOU FOR ATTENTION!THANK YOU FOR ATTENTION!

Appendix I 20
Input and Assumptions - RTL
Seller Name:
Seller Ticker:
Last Historical Year: 31.12.2013
Valuation Date: 30.01.2014
Months in Year: 12
Conversion Units: 1 000 000
Circularity: Yes
Circularity Breaker: No Operating Case: 1Base
1Base
Stock & Option Information: 2ConservativeStock & Option Information: 2Conservative
3Optimistic
Common Shares Outstanding: 154790000
Current Share Price: € 77.00
Enterprise Value Calculation:
Equity Value: 11 918 830 000
Less: Cash & Cash-Equivalents: 574 000 000
Plus: Total Debt: 3 974 000 000
Diluted Shares: 154 790 000 Enterprise Value: € 15 318 830 000

Appendix II CAGR by divisions
2010-2009 2011-2010 2012-2011 2013-2012 CAGR
Mediengruppe RTL
Deutschland 108.67% 101.17% 103.15% 101.99% 2.10%
Groupe M6 105.02% 97.71% 98.30% 99.71% -2.33%
Fremantlemedia 107.54% 112.20% 119.37% 90.12% 3.75%
RTL Nederland 112.97% 117.46% 86.76% 106.81% 5.31%
RTL Belgium 103.47% 103.35% 97.22% 99.52% -0.76%
RTL Radio (France) 99.42% 106.98% 97.83% 97.22% 0.29%
RTL Hungary 126.51% 94.29% 102.02% 99.01% -1.61%RTL Hungary 126.51% 94.29% 102.02% 99.01% -1.61%
RTL Hrvatska 92.68% 97.37% 83.78% 106.45% -5.28%

Appendix III Revenue by divisions
Revenue
2013
Revenue
2015E
Revenue
2018E
Mediengruppe RTL Deutschland 33.98% 34.37% 34.78%
Groupe M6 23.48% 21.73% 19.25%
Fremantlemedia 26.03% 27.19% 28.87%
RTL Nederland 7.73% 8.31% 9.23%RTL Nederland 7.73% 8.31% 9.23%
RTL Belgium 3.55% 3.42% 3.25%
RTL Radio (France) 2.97% 2.90% 2.78%
RTL Hungary 1.70% 1.59% 1.44%
RTL Hrvatska 0.56% 0.49% 0.39%
Total 100.00% 100.00% 100.00%

Appendix IV
PROFITABILITY
2009 2010 2011 2012 2013 2014E 2015E 2016E 2017E 2018E
gross profit
margin
(revenue-
COGS)/revenue 17.6% 22.2% 21.3% 19.9% 21.4% 22.2% 22.9% 23.6% 24.2% 24.8%
net profit margin
profit after
tax/revenue 5.8% 13.2% 13.8% 11.5% 16.1% 13.0% 13.6% 14.1% 14.6% 14.9%
operating profit
margin
operating
profit/revenue 13.2% 19.4% 20.5% 17.2% 18.7% 19.2% 19.7% 20.2% 20.7% 21.0%
profit before
pre-tax margin
profit before
tax/revenue 14.2% 20.4% 20.7% 16.1% 21.3% 19.9% 20.4% 20.8% 21.1% 21.4%
return on assets
profit after
tax/average total
assets 3.6% 8.9% 9.6% 8.4% 11.5% 10.8% 11.6% 12.3% 12.9% 13.5%
return on total
capital
operating
profit/average total
liabilities and assets 8.3% 13.0% 14.4% 12.5% 13.4% 16.0% 16.8% 17.6% 18.3% 19.0%
return on equity
profit after
tax/average total
equity 6.0% 14.8% 16.1% 14.0% 19.2% 25.0% 26.7% 28.3% 29.8% 31.2%

Appendix V
LIQUIDITY
2009 2010 2011 2012 2013 2014E 2015E 2016E 2017E 2018E
current ratio
current
assets/current
liabilities 160% 164% 147% 149% 116% 110% 104% 98% 93% 88%current ratio liabilities 160% 164% 147% 149% 116% 110% 104% 98% 93% 88%
quick ratio
(current assets -
inventories)/current
liabilities 114% 128% 111% 111% 82% 76% 71% 67% 62% 58%
cash ratio
cash&cash
equivalents/current
liabilities 15% 32% 28% 26% 20% 18% 17% 16% 15% 13%

Appendix VI
SOLVENCY
2009 2010 2011 2012 2013 2014E 2015E 2016E 2017E 2018E
long-term debt-
to-equity
non-current
liabilities/total equity 11% 10% 10% 12% 30.28% 27.80% 27.80% 27.79% 27.77% 27.74%
debt-to-equity
ratio
total liabilities/total
equity 58% 58% 61% 63% 111% 114% 122% 131% 141% 152%
total debt ratio
assets 37% 37% 38% 38% 53% 53% 55% 57% 58% 60%
financial
leverage
total assets/total
equity 158% 158% 161% 163% 211% 214% 222% 231% 241% 252%
debt to capital
liabilities & assets 37% 37% 38% 38% 53% 53% 55% 57% 58% 60%
ACTIVITY
2009 2010 2011 2012 2013 2014E 2015E 2016E 2017E 2018E
receivables turnover
revenue/average
recevaibles 239% 256% 267% 278% 273% 322% 329% 336% 343% 350%
DSO
365/recevaibles
turnover 153 142 137 131 134 113 111 109 106 104
total asset
turnover
revenue/average
total assets 63% 67% 70% 73% 71% 83% 85% 87% 89% 90%
working capital turnover
revenue/average
working capital 419% 450% 469% 488% 479% 489% 499% 510% 520% 531%

Appendix VII
Extended DuPont analysis
2009 2010 2011 2012 2013 2014E 2015E 2016E 2017E 2018E
EBIT margin EBIT/revenue 13.70% 20.10% 21.20% 16.32% 20.48% 19.83% 20.37% 20.85% 21.26% 21.62%
asset turnover revenue/total assets 59% 63% 70% 76% 78% 81% 84% 87% 90% 93%
interest burden EBT/EBIT 101.44% 97.63% 98.88% 103.90% 100.41% 100.17% 99.84% 99.44% 98.95%
financial leverage total assets/total equity 158% 158% 161% 163% 211% 214% 222% 231% 241% 252%
tax burden
netincome/pretax
income 68% 77% 75% 71% 76% 74% 75% 76% 77% 78%tax burden income 68% 77% 75% 71% 76% 74% 75% 76% 77% 78%
ROE 0.00% 15.45% 17.49% 14.22% 26.38% 25.52% 28.54% 31.79% 35.29% 39.10%
2011 2012 2013 2014E 2015E 2016E 2017E 2018E
EBITDA margin 24.51% 19.61% 24.10% 23.60% 24.30% 24.95% 25.54% 26.09%
EBITA margin 19.67% 17.97% 19.56% 19.99% 20.53% 21.01% 21.42% 21.77%
Net margin 15.46% 11.52% 16.10% 14.81% 15.39% 15.88% 16.28% 16.61%

Appendix VIII
RTL Group - Unlevered Free Cash Flows Projection
Projected
2014 2015 2016 2017 2018
Revenu
e: 6 013 6 140 6 269 6 401 6 536
EBITDA
: 1 419 1 492 1 564 1 635 1 705
EBIT: 1 192 1 251 1 307 1 361 1 413
Less: Taxes 305 320 334 348 362
Plus:
Depreciation 217 232 247 264 282Depreciation 217 232 247 264 282
Plus:
Amortization 10 10 10 10 10
Less: Changes in NWC: 294 116 64 247 431
Less: CapEx: 302 308 315 322 328
Unlevered Free Cash
Flow: 517.8 747.6 850.7 718.2 584.0
PV of Free Cash Flow: 487.9 663.7 711.6 566.1 433.7
Projection Year: 0 1 2 3 4 5
Mid-Year Conversion Discount: 0.5 1.5 2.5 3.5 4.5
Free Cash Flow Growth
Rate: 44% 14% -16% -19%

Appendix IX
RTL Group - DCF Assumptions &
Output
Discount Rate: 6.13%
Terminal Growth Rate: 2%
PV of Terminal Value: 14 423
RTL Group - WACC Calculation
Risk-free rate 1.34%
Beta 0.83
Equity risk premium: 7.3%
Cost of equity 7.40%
PV of Terminal Value: 14 423
Sum of PV of Cash Flows: 2 863.0
Enterprise Value: 17 286
Net Debt: 3 400
Equity Value: 13 886
# of Shares Outstanding: 155
Implied Share Price 89.5
Current Share
Price: 77
Upside: 17%
Cost of debt 1.68%
Tax rate 26.00%
After-tax cost of debt 1.24%
Share of Equity: 78%
Share of Debt: 22%
WACC 6.13%

Appendix X

Appendix XI

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