Report on quarter 2/99 - More.de AG

Brothers Flub 

<strong>Report</strong> on quarter 2/99 

Inspector Mouse 

Six of a kind 

Molly O! 

Philipp 

Urmel

2nd quarter 1999 highlights 

RTV looks back on a highly successful second quarter. The dynamic 

revenue and profit growth posted in the 1st quarter of the 

year was improved on in several areas. Foreign revenues rose by 

some 180% compared to the previous year’s figure. At DM 6.3 

million (Euro 32 million), the result from ordinary activities was 

90% up on the previous year’s DM 3.3 million (Euro 1.7 million). 

The improved standing among customers and partners as well as 

the IPO proceeds helped RTV close several strategic cooperations 

and push ahead international expansion. 

Successful IPO 

RTV shares have been traded on Frankfurt’s New Market since 

June 8, 1999 when Deutsche Bank listed the company and placed 

2,875,000 shares. All the new shares were created by way of a 

capital increase. The IPO generated proceeds of DM 46.7 million 

for RTV. 

The shares were issued at Euro 8.3 and rose to Euro 24,9 on the 

first day of trading. Within a few days from the initial listing the 

greenshoe option for another 375,000 shares was fully exercised 

to satisfy the strong domestic and international demand. Investors 

who bought the share at the issue price were able to more than 

quintuple their initial investment by June 30, 1999. 

International partnerships strengthen position 

in the USA and Canada 

RTV was a sought-after partner at MIP TV in Cannes in April 1999 

and was therefore able to expand its international network of production 

partners and customers. The company signed a large 

number of promising cooperation agreements with international 

partners at Europe’s biggest film and TV trade fair. Highlights on 

this list include: "Molly O!", a coproduction with Sunbow/Sony 

Wonder, USA, (production start in summer 1999, completion in 

2000); "Rotten Ralph", a turbulent cartoon series coproduced with 

the BBC and Italtoons, USA; "The Nits" with Energee, Australia; as 

well as "Urban Squirrel", a cartoon series coproduced with JP Kids 

and Disney Channel, USA. To strengthen its international sales 

presence particularly in South-eastern Europe, RTV signed a cooperation 

deal with SPI, USA. 

"Philipp" goes America 

RTV signed a 5-year agreement with Itsy bitsy Entertainment 

Company, USA with respect to "Philipp", a show developed 

and produced by RTV. Starting September 1999, more than 75 

million households in the USA, Canada and Latin America will 

be able to enjoy "Philipp" on the 90-minute "It's itsy bitsy 

Time!" magazine on Fox Family Channel. 

Important licensing agreement 

"Fix & Foxi" will soon take centre-stage on the shelves at cooperating 

Vedes toy and leisure shops. Vedes, Europe’s largest 

distribution and retail group for toys and leisure products, has 

acquired licensing rights to "Fix & Foxi" for a large part of its 

own indoor and outdoor toy ranges. From spring 2000, the 

licensed merchandise will be available at virtually all specialist 

toy shops in Germany. "Fix & Foxi" licenses have also been 

acquired by Ravensburger Buch- und Spieleverlag, 

Ravensburger Interactive Media and Ravensburger Spieleland. 

Together with the upcoming publication of new "Fix & Foxi"- 

cartoon books, RTV’s cooperation with these partners provides 

an excellent basis for a sustained and successful presence 

in the market. 

"Fix & Foxi" sold to 25 countries 

"Fix & Foxi" will soon enjoy a worldwide exposure on TV. The 

first series of cartoon episodes has already been sold to 25 

countries even though production will not be completed 

before autumn 1999. Apart from German-speaking TV channels, 

buyers include broadcasters in Britain, Canada and 

Spain as well as in important new markets in Japan, China 

and Korea. 

Selling of the year’s second major project, "Brothers Flub", is 

proceeding just as smoothly. The cartoon show featuring two 

intergalactic postmen has meanwhile been sold to 

Nickelodeon, USA, as well as to Australia, France and Britain. 

The company 

RTV develops and produces films and TV programmes for 

kids and families, concentrating on high-quality cartoon 

shows which are suitable for international marketing. RTV is a 

fully integrated operator, handling everything from rights 

creation to merchandising and relying on a comprehensive 

network of coproducers and broadcasters. As such, RTV is a 

leading supplier of kids’ and family entertainment in 

Germany. 

TV business (production, commissioned productions, distribution) 

The positive development in productions and commissioned 

productions continued in the second quarter of 1999. This 

year’s major projects have been marketed successfully on an 

international scale, agreements for follow-up productions 

have been concluded, and first-class rights have been acquired. 

All these measures represent solid stepping stones 

towards the future. Generating revenues of DM 14.9 million 

(Euro 7.6 million) - up 12% on the previous year’s value - the 

TV business contributed 83% of RTV’s total revenues. 

New production activity in the first-half of 1999 has centred 

on "Fix & Foxi I", "Brothers Flub", "Inspector Mouse" and 

"Patrol 03", all of which have already been sold to the key 

markets. The purchase of the "Bussi Bear" rights from Rolf 

Kauka as well as the acquisition of the "Amon und Skarabä" 

property have materially enhanced the value of RTV’s programme 

stock. 

In addition to these new productions, the company decided 

to continue several successful programmes. Preparations for 

the production of another 26 "Fix & Foxi" episodes are already 

under way. RTV’s pipeline currently includes new episodes 

of the top-selling "Countrymouse/ Citymouse" and 

"Babaloos" shows. "Philipp’s Animal Hour", a commissioned 

production launched several years ago, will be continued in 

1999 as well.

Merchandising business 

The merchandising activities were clearly expanded in the 

second quarter of 1999. Apart from a more intensive exploitation 

of existing rights, RTV secured numerous attractive 

new licenses. Generating revenues of DM 3.1 million (Euro 

1.6 million), the merchandising business contributed 17% of 

RTV's total revenues. Compared to the previous year’s figure 

of DM 2.0 million (Euro 1 million), revenues were up by 

55%. 

The successful marketing of the "Fix & Foxi" rights provided 

the highlight in the second quarter of 1999 when RTV was 

able to sign a comprehensive agreement with Vedes regarding 

the marketing of the two inseparable little foxes. The 

two classic characters, "Captain Bluebear" and "Philipp", once 

again proved their potential. New additions to the portfolio 

included licenses for "Verstehen Sie Spaß?", "Michael 

Schanze", "Die Knickerbocker-Bande" and the character 

"Penny" created by children’s book author Thomas Brezina. 

Sales and profits 

The second quarter of 1999 saw RTV continue the first quarters 

strong growth across all fields of business and markets. 

In the first six months of the current financial year RTV recorded 

sales of DM 18.0 million (Euro 9.2 million). This represents 

an 18% increase on the previous year’s DM 15.3 million 

(Euro 7.7 million). This outcome was supported, in particular, 

by the exceedingly positive development of foreign sales 

which came in at DM 5.4 million (Euro 2.8 million). This 

means that RTV generated 80% of the previous year’s fullyear 

sales already in the first half of 1999. The merchandising 

business improved clearly on the previous year’s figures as 

well. 

Profits showed a highly gratifying development. The result 

from ordinary activities amounted to DM 6.3 million (Euro 

3.2 million) in the reporting period. This represents a 90% 

increase over the previous year’s period (DM 3.3 million, 

Euro 1.7 million). This means that RTV has posted more than 

80% of the forecast 1999 profit already in the first six months 

of 1999. 

Apart from a newly adopted depreciation policy and clearly 

lower costs of materials, the impressive profit growth reflects 

strong license sales, incoming cash flow from productions 

such as "Philipp", "Fix & Foxi" and "Brothers Flub" as well as 

excellent merchandising results. 

in Mio DM 

Sales 

TV-Programms 

13,3 

Jan. 1 to 

June 30, 

1998 

14,9 

Jan. 1 to 

June 30, 


Sales 

Licensing 

2,0 

Jan. 1 to 

June 30, 


3,1 

Jan. 1 to 

June 30, 


Result from ordinary 

activities 

in Mio DM 

6,3 

in Mio DM 

3,3 

Jan. 1 to 

June 30, 


Jan. 1 to 

June 30, 


Cash-flow 

The DVFA/SG result for the first six months of 1999 amounted 

to DM 2.8 million (Euro 1.4 million), compared to DM 1.3 

million (Euro 0.677 million) in the previous year. This result 

does not recognize the extraordinary IPO expenses. The 

DVFA/SG cash flow amounted to DM 5.0 million (Euro 2.6 

million) in the first half of 1999, compared to DM 1.4 million 

(Euro 0.730 million) in the same period of the previous year. 

Employees 

RTV employed a total of 23 people as at June 30, 1999, including 

15 in Ravensburg and eight at the Mainz branch office. 

Outlook 

The next quarter will see continued marketing efforts for 

"Fix & Foxi". Working in close cooperation with the main 

licensees, Vedes and Ravensburger AG, RTV will ensure comprehensive 

marketing of the two popular characters and their 

friends. Additional licensing deals which are still at the negotiating 

stage will ensure additional exposure in the Germanspeaking 

markets. 

Opportunities for intensive merchandising at home and abroad 

will also be created by the license sales for other cult and 

trend programmes such as "Brothers Flub" and "Philipp". 

RTV expects favourable stimulation for the international marketing 

of its own characters and productions as well as new 

coproductions and partnerships from MIPCOM, the international 

television fair taking place in Cannes in October. 

Effective September 1, 1999, the RTV board will be expanded 

in order to have the management resources required to meet 

the growth targets. Dr. Arno Haselhorst will be in charge of 

finances, investor relations and merchandising. 

As regards the full year 1999, RTV expects to post positive 

revenue and profit growth. The company has invested DM 5.9 

million (Euro 3.0 million) in programme activities - documentaries, 

commissioned productions, films and cartoons - already 

during the current financial year. Building on its strategic 

partnerships, RTV is now looking forward to dynamic growth 

far beyond the next two quarters. 

1,4 

Jan. 1 to 

June 30, 


5,0 

Jan. 1 to 

June 30, 

1999

Profit and Loss Statement 

for the period from January 1, 1999 to June 30, 1999 

compared with first-half 1998 figures - unaudited HGB statement 

in DM ‘000s 

January 1 to 

June 30, 1999 

Sales 18.018 

Cost of materials 

Gross profit 

Personnel expenses 

Other operating result 

EBDIT 

Depreciation 

EBIT 

Financial result 

Result from ordinary activities 

Tax on profit on ordinary activities 

3.492 

1.986 

DVFA/SG result 2.800 1.324 

extraordinary expenses (net) 

2.192 

- 

Other Taxes 2 - 

Net profit for the first six months 

606 

1.324 

DVFA/SG result per share 

0,27 “(1) 

0,18 “(2) 

“(1) based on 10,375,000 shares 

“(2) based on 7,500,000 shares 

Dates 1999 

October 4 - 8, 1999 MIPCOM, Cannes 

November 12, 1999 Quartalsbericht 3/99 

November 29 - December 7, 1999 IPOC / German Midcap Conference 

RTV Family Entertainment AG • Robert-Bosch-Str. 1 • D-88214 Ravensburg 

Tel. +49 (0) 7 51 - 86 10 67 • Fax +49 (0) 7 51 - 86 11 75 • http://www.rtv-ag.de • e-mail: info@rtv-ag.de 

737 

17. 281 

1.373 

6.423 

9.485 

2.975 

6.510 

218 

6.292 

January 1 to 

June 30, 1998 

15.265 

7. 324 

7. 941 

1. 282 

3.085 

3.574 

74 

3.500 

190 

3.310 

Translation to IAS standards 

The translation of the half-year statement to IAS standards merely required an adjustment 

of the pension provisions resulting in a DM 10,000 profit decrease.

Report on quarter 2/99 - More.de AG

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