UNTERFÖHRING (dpa-AFX) - The media group ProSiebenSat.1 will show fewer series and films from the USA and will instead focus on locally produced content. This will require investments in the millions, which will weigh on earnings in the coming year. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) in 2024 are expected to be around the previous year's level, the company announced on Tuesday evening in Unterfohring. ProSiebenSat.1's decision to reduce the share of licensed content from the USA will also lead to a write-down in the millions. On the stock market, the news was met with a slide in the share price.

The ProSiebenSat.1 share lost almost eight and a half percent to EUR 5.62 on Wednesday morning and was the biggest loser in the small-cap index SDax. So far this year, the share has lost almost a third of its value.

The Group's earnings forecast is lower than expected by the market, as analyst Lisa Yang from Goldman Sachs noted in an initial assessment. Industry experts had expected a return to growth after an anticipated decline in the current year. On average, they had expected an increase of eight percent. One stock trader also spoke in the morning of weak targets for 2024 compared to expectations.

ProSiebenSat.1 had announced the previous evening that it would increase its program investments by 80 percent to EUR 1.05 billion in the coming year. The company wants to expand local program content on the streaming platform Joyn and on its linear TV channels in order to increase market share there. The higher costs would have a negative impact on the results of the Entertainment division in 2024.

Savings from the ongoing efficiency program would have the opposite effect. The Management Board therefore expects a "stable development" in adjusted operating profit (EBITDA) for the Group. Sales are expected to increase, with management assuming a slight recovery in advertising sales.

The decision to focus less on licensed US content will result in an impairment of up to EUR 250 million on existing programming assets, ProSiebenSat.1 added. This is to be booked in the fourth quarter of this year. In addition, the company is making provisions for onerous contracts for the acquisition of future programming assets of up to a further EUR 90 million. This has no impact on the forecast for the year coming to an end, it said. There is also no change in net financial debt.

The future cash outflows for programs still to be delivered, resulting primarily from the encumbered contracts, are expected to total around EUR 50 million in the next two financial years 2024 and 2025, taking into account offsetting tax effects, as the Group further explained. However, according to the information provided, these will not have a negative impact on earnings.

The Group has therefore confirmed its forecast for the year and continues to expect an adjusted operating profit (EBITDA) at the lower end of the EUR 550 to 650 million range for 2023. In the previous year, earnings amounted to 678 million euros. At the same time, Group sales are expected to be slightly below the target range of 3.95 to 4.25 billion euros - after 4.16 billion euros in 2022. For the fourth quarter, the Executive Board expects slight growth in sales and adjusted operating profit. The Group plans to publish further details on March 7.

In recent decades, US content, including series and films, has often been a core component of private broadcasters' programming in Germany. The USA is still regarded as a place where program trends originate. In this country, it has recently been observed that public and private TV and streaming providers as well as global streaming providers are increasingly focusing on local content in the respective markets. ProSiebenSat.1 intends to continue buying US licensed content on a selective basis./nas/rin/stw/mis