Television Francaise 1 SA
PAR:TFI
If you don’t study any companies, you have the same success buying stocks as you do in a poker game if you bet without looking at your cards.
Utilize notes to systematically review your investment decisions. By reflecting on past outcomes, you can discern effective strategies and identify those that underperformed. This continuous feedback loop enables you to adapt and refine your approach, optimizing for future success.
Each note serves as a learning point, offering insights into your decision-making processes. Over time, you'll accumulate a personalized database of knowledge, enhancing your ability to make informed decisions quickly and effectively.
With a comprehensive record of your investment history at your fingertips, you can compare current opportunities against past experiences. This not only bolsters your confidence but also ensures that each decision is grounded in a well-documented rationale.
Do you really want to delete this note?
This action cannot be undone.
| 52 Week Range |
6.88
9.05
|
| Price Target |
|
We'll email you a reminder when the closing price reaches EUR.
Choose the stock you wish to monitor with a price alert.
This alert will be permanently deleted.
Television Francaise 1 SA
You don't have any saved screeners yet
Ladies and gentlemen, welcome to the TF1 web conference for the first quarter 2018 financial results. I would like now to hand over to Mr. Philippe Denery, CFO. Sir, please go ahead.
Well, thank you. Good evening, ladies and gentlemen. Thank you for joining us. A few slides have been published on our website, available as well on the webcast, with audiences and financial results, which hopefully will help you to follow my speech. As usual, I will start with the main key facts and the summary of our results for the first quarter '18. Then I will be happy to take questions. Let's begin with some key points summarizing our Q1 performance. First point, good ratings on commercial targets, with a group audience share at 32.2% on women below 50, in line with what we have delivered in average during fiscal year '17 in a tough context, negotiation with telecom and cable operators and strong competition with Winter Olympic Games broadcasted on France Télévisions. Second point, savings on the programming costs, thanks to the combination of the content acquisition strategy and the multichannel broadcasting approach. Third point, some nonrecurrent events during the quarter: very strong basis of [ cooperation ] for interactivity revenues with a strong lineup last year, game show The Wall in access time, Les 12 coups de Midi and the broadcasting of the handball World Cup; no theater movie released by TF1 Studio versus 2 movies last year; and early deliveries of French drama, which imply more depreciation on coproduction rights. Fourth point, increase in the current EBIT, plus 3.8% year-on-year during the quarter due to satisfactory cost control. Altogether, Q1 is in line with our plans and our guidance. Going now deeper into detailed analysis, let's consider audiences. The group audience share for the first quarter remained at a good level at 32.2% on the women aged below 50, in line with expectation and the multichannel strategy implemented. During the quarter, TF1 core channel has performed well, reaching an audience share on women below 50 at 22.1%, up 0.2 point year-on-year, increasing the gap with our main private competitor by 0.6. Key entertainment brands, The Voice, Koh-Lanta, Les Enfoirés; as well as new French drama, Les Bracelets rouges, Les Innocents, contributed together [ for the ] best TV ratings of the quarter. Moreover, our news programs remain leader, gathering an average of 6 million TV viewers this quarter for the evening news and 5.4 million for the daily news. Recently, from the 12th of March, TF1 channel has launched a 10-minute magazine, Le 20H Le Mag, in prime time in order to optimize the half-hour slot so critical for advertising. The first ratings are very promising, with an average of 5.1 million TV viewers and the highest score [ reaped ] on the 2nd of April at 5.9 million TV viewers. Our DTT channels offer TMC, TFX, TF1 Séries Films, LCI, remains leader at a high level, with more than 10% audience share on women below 50, stable versus what has been achieved last year. The rebranding of TFX and SérieClub -- Films are aimed to offer to the public as well as to advertisers a clear positioning and targeting. The rebranding has led to an increase on the ratings on their respective targets, TFX with a 4.9% audience share on younger viewers aged between 15 to 24 years old, up 0.2% year-on-year; and TF1 Séries Films with 2.5% on women below 50, adding 0.3 point year-on-year. On LCI, the weekly news magazine La Matinale achieved further growth and posted an all-time high, 2.1% audience share in March. Let's focus now on financial figures. For your information, IFRS 9 and 15 have been implemented since beginning of this year, with a minor impact on financial statements. Historical data are available in the management report. All the figures mentioned during the call refer to those new IFRS accounting standards. Let's focus on group revenues. Overall, group consolidated revenues for the first quarter '18 amounted to EUR 499 million, almost stable compared to last year. Advertising revenues for the group increased by 0.7%, up by EUR 2.7 million to EUR 369 million; in relation with advertising revenues for our 5 [ unencrypted ] channel, up by 0.3% year-on-year at EUR 350 million. As said before, the context of this quarter has been quite specific with one-offs. I'll remind you that one cable operator has cut the signal of TF1 channels during 1 week, with an impact on ratings and revenues. Revenues from other broadcasting activities amounted to EUR 53 million for the first quarter '18, down by EUR 3 million. The decrease this quarter in interactivity revenues due to a hard basis of [ comparison ] linked with specific programs broadcasted last year is partly offset by growth in digital and distribution revenues. Distribution agreements with Bouygues Telecom and Orange have been signed, respectively, in January and March, with an impact which would be more significant in Q2. The studios and entertainment segment revenues amounted to EUR 97 million. The good performance of Newen Studios combined with organic growth of the content -- [ or the concert ] La Seine Musicale and the development of the music production activity of Play Two offset the lack of movie theater release during the quarter year by TF1 studio. Now let's turn to the cost side. The programming costs for the group's 5 channels for the first quarter '18 have been contained to EUR 230 million compared to EUR 233.5 million for the first quarter '17, representing a saving of EUR 3.5 million. It takes into account the advertising market seasonality and the results of long-term actions such as optimized content acquisition or multichannel circulation of programs. It is fully in accordance with the programming strategy we have shared with you. News programming cost decreased by 8.6% at EUR 34.6 million, including the news channel LCI. Entertainment programming costs are stable. French dramas costs increased due to the broadcast of more drama as compared to last year and the daily drama Demain nous appartien in access prime time. Films costs are down by 17.5%. We have broadcasted more films as compared to last year but at a lower average price per film. The trend of our programming cost is fully in line with expectation and guidance. The other costs are stable, EUR 2 million savings year-on-year, which includes depreciation on coproduction rights on French drama that have not yet been broadcasted during the quarter. For your full understanding, compared to last year, with a higher number of French dramas integrated in our inventory to be broadcasted later during the year, corresponding coproduction rights have been depreciated in Q1. As a result, the current operating profit for the first quarter of '18 reached EUR 38.3 million, up by 3.8%, which leads to a current operating margin of 7.7%, up by 0.4% year-on-year. An amount of EUR 5.7 million was recognized in noncurrent operating expenses related to the amortization of our audiovisual rights remeasured in connection with the Newen Studios acquisition. Consequently, operating profit for the first quarter is EUR 32.6 million. Net profit attributable to the group is EUR 25 million for the first quarter, down by EUR 3 million. And I remind you, in Q1 '17, net profit was positively impacted by the sale of TF1's equity stake in Groupe AB. The net cash position stands at EUR 280 million compared to EUR 257 million at end of December, up by EUR 23 million and compared to EUR 215 million end of March '17. Beyond these financial figures, TF1 group has continued to transform its model to deliver more value. Two additional global distribution agreements were signed during the quarter with Bouygues Telecom and Orange, following one with Altice-SFR end of last year. These will generate additional revenues on a full year basis. We are happy to announce an agreement with Iliad-Free that has been signed today. Negotiations are still ongoing with CANAL+. The acquisition of the minority stake in Newen Studios, still subject to clearance from the French competition authority, will be an opportunity for the group to accelerate the development of the content business and to benefit from synergies within the group. In digital, the clearance of the competition authority on the 23rd of April will allow us to close the aufeminin deal before summer holidays. In addition, Q2 revenues will be positively impacted by the broadcast of the Football World Cup in Russia. The first feedback from commercialization of advertising slot -- spot of this event are very positive. Q1 '18 results allow us to maintain and change our midterm strategic outlook. Operational margin is improving at 7.7%, on track to the double-digit margin target in '09 (sic) [ '19 ]. Q1 '18 margin is higher than Q1 '17 and the highest Q1 for the last 6 years. With the acquisition of aufeminin, the part of non-advertising revenues in total revenue will grow in line with the guidance. And with the EUR 3.5 million savings we've made this quarter, we are well on track with the guidance on the cost of programs. We reiterate the guidance given at the beginning of this year: from '18, growth in current operating margin at group level, excluding major sports event; average annual cost of programs reduced to EUR 960 million, excluding major sports events for the 5 [ unencrypted ] channels for the period '18-'20, thanks to optimization of content acquisition and keeping our ambition in terms of ratings; growth in revenue from activities other than advertising on the 5 [ unencrypted ] channels, with those other activities expected to account for at least 1/3 of consolidated revenue in '19; double-digit current operating margin in '19. Well, that concludes my review of TF1 results for the first quarter '18. Please note that our half year financial results presentation will take place on the 25th of July '18. Thank you again for having joined us tonight. Should you have any question, please do not hesitate to ask. Finally, I would remind you that a recording of this conference call will be available, and you will find the connection details on our website, group-TF1.com.
[Operator Instructions] We have the first question from Chris Johnen, HSBC.
First, could you specify the contribution from Belgium to advertising in the first quarter? And then second, thinking about the major sports events in the coming 4 years. I mean, you've acquired quite a few sports rights. How should we think about the costs associated with that in the coming, say, 4 years? Is it reasonable to assume that they won't fall below EUR 65 million a year on average?
Well, on your first question, Belgium, we don't speak now. Belgium [ as compared ] to the remaining part of global revenues -- advertising revenues. What we can say is that the first quarter is in line with expectation. [indiscernible] not very significant. Of course, as we have already said, they are not -- they were not waiting for us. So of course, the competition is very tough with the traditional and historical actors on the advertising market in Belgium. Nevertheless, we are progressing step by step. As we have said, the significant amount, it will take a couple of years in order to achieve the target we have and we have given you, which are double-digit target. But we are progressing, and it's quite encouraging even if -- and we were fully aware of that. The market is quite tough and the competition is very hard, but that's part of the game. Not very significant on Q1, of course, but in line with what we have as a first step in Q4. Now concerning the next 4 years, how could you think about the sports events and the cost of sports events, I just would say that, that should be significantly lower than the World Cup -- Football World Cup. If you include -- in the 4 years, if you exclude the next World Cup, if I may say, well, yes, significantly less. If as an average, of course, there is always 2 -- or '22, the next World Cup. But in any case, your figure seems to be rather high as an average for the next 4 years. And as you know, there is one of those 4 years without any sports events normally. That it's cyclical. So I would say that you probably are a bit high as compared to what could be spent on average sports events for TF1 group.
Which year would that be, a follow-up? Because in '19, you have the Rugby World Cup plus FIFA Women's World Cup, right?
Yes. We have next year the rugby and the football female World Cup. But again, that's what we -- the cost for us and number of match we broadcast. We have not all the rights. Or when we have rights, we're in position to sell some of them. So at the end, you should keep in mind some -- more in line with what has been done in the past. I remind you that in '14, we had EUR 73.7 million as cost for the Football World Cup. We had for the rugby in '15 around EUR 27 million. And for the Euro, we had EUR 46 million, which basically make an average for the full year '14, '17 lower than the figures you mentioned.
All right. No, that's -- on the rugby that you plan to resell, it's good to know. And maybe a final question, if I may. How are you, in general, thinking about the sports investments that you're doing? Because there's quite a bit of criticism, and I include myself here, and people questioning whether or not some of those decisions are rational when it comes to profitability. So be -- I'll be curious to hear how you assess those investments that you've made.
Well, in a context where sports rights are increasing, we have achieved at least a stabilization or even a small decrease in sports rights. We have a strategy which is now moving to very specific sports rights, like we've done with handball or we've made with the World Cup -- females' World Cup, which are at a price which are not the same magnitude of the breakeven World Cup and as well as Rugby World Cup or Football World Cup. So our strategy is, first, if you take what has been achieved during the last few years, we used to buy all rights and resell some of them. We now buy some rights and the one we need to broadcast. And apart from that, we are working in order to optimize rights -- sports rights and to resell some of them. So that's -- in order to achieve a kind of balance or -- which means that we are not making no more losses on sports rights. That's the target. That's what we normally should achieve. And we have to take into account 2 things in this strategy. First of all, the direct margin on each game doesn't make so much sense because it creates more and more additional revenues, whether through interactivity or, of course, through digital, and that is also part of the business and revenues we have to take into account and more and more -- and more than in the past. Now the second point is sports rights are very important for us, and especially events like World Cup, just because it's a part of the differentiation with some of our competitors, and especially some of the guests and actors, where we have to be more specific and to offer a different program -- different nature of program, as we've said, mainly live and local. And that is a combination of what we can offer. In addition to that, I would just remind you that when you're in position to offer the World Cup through -- and when you want operators to contribute to your investments in content, it's part of a deal. So you should look at this strategy as a whole and look at revenues no more, like a few years ago, what is margin on each game. But to look at it as like a global view of the nature of the direct and indirect revenues and benefit we can get from them. But as a whole, we also have to achieve, and that has been partly done, a decreasing global amount of those sports events and the consequence on the P&L, and that has been achieved. I remind you that in the past, for the World Cup, there were some losses linked with the reselling of some rights. We were -- we have resold with some losses, which is no more the case.
Our next question is from Annick Maas, Liberum.
My first question is on the advertising -- TV advertising market in France in Q2 on a like-for-like basis. So if you exclude the World Cup impact, what do you see for the market? The second one is on the distribution agreement. So are they really contributing from the day on you signed them? Or is there a gap in between the signature and actually their contribution, just to see what it's contributing in Q1, Q2, respectively? And then the last one is on the reform of the public audiovisual sector. Are we having any news on that one?
Yes. Thank you. Well, on the first question, for Q2, no clear visibility. May is a bit specific. I would say that we are confident, but with -- if you exclude the World Cup, of course, which was your question, limited visibility and no negative sign, but no significant change in the trend we had in -- during the last 2 quarters. So that's for Q2. But we will benefit from the World Cup, and that should generate some specific revenues for the World Cup. Concerning distribution agreements, they are globally the same kind -- the framework is the same, but of course each is a bit different. It doesn't generate the day after a direct contribution, but that is, of course, quite quickly after signing. So I would say that for the second half -- the second part of the year, that will contribute normally and at a level which is in line with what we've signed, depending on the services, depending on what we offer in the contract. That doesn't contribute immediately, but not very long after signing. Now your third question was the audiovisual law and the change in the regulation. We are in -- well, we are discussing with the authority. And from what we understand, we should have some law which could be passed end of this year. There are different topics which are in process to be discussed and reviewed. So probably, in terms of planning, it could take place end of this year.
We have Sophie Julienne from Bank of America.
Three questions for me. First of all, your free platforms' profit benefited from lower programming costs. However, I can see that other operating costs actually increased by EUR 7 million. What is the reason for this? And how should we think about the rest of the year? Studio had a very weak release schedule in Q1. How is the rest of the year? And finally, Netflix has made it clear it was willing to invest more heavily in French content. Have you seen at Newen increasing orders from Netflix? And do you expect it to benefit from Netflix strategy going forward?
Well, on studio, second question -- start with your second question. On studio, I would say that the release should be in line with what we had last year. So the start of the year is low, I would say, because we have not released any movie. But that should come and should come in the same kind of lineups as last year. So that's just delays. So that's the way you should think about it. Concerning Netflix, they have said that they will invest. We have signed a contract with them -- Newen had signed a contract with them for series. And for the moment, there is -- from my understanding and from what I know, there is no more specific series which are under consideration or in advanced -- very advanced on the French market today. But of course, we expect, through our production business, to be part of the competition and to benefit from some order in the next few months and years. Newen is well positioned on -- with Netflix. They have already been in a deal with them. So yes, it's part of the strategy, and we'll be very pleased to work -- Newen will be very pleased to work with them. There are opportunities, so they will compete. Now concerning your first question, I'm not sure I have understood exactly your question. Could you repeat it?
Yes. So if I look at free platforms or unencrypted platforms, I can see that, obviously, there was an improvement in programming costs. But if I try and calculate the overall cost, I can see that other costs actually increased. And I was wondering whether it was a one-off and it was going to reverse on a full year basis.
Well, yes, probably, you are right, but you take into account probably depreciation and amortization in the other costs. And if it's the case, yes, it's probably due to some high level of amortization and depreciation linked with the French drama we order, we include in our inventory. But under the rules we have implemented now for the last 2 years, as you know, we have a depreciation of the coproduction rights on French drama when we include them in our inventory, not waiting for their broadcasting. And as a consequence, we immediately depreciate those programs on which we have 50% coproduction rights. So yes, that is due to the fact that, as compared to last year and for a one-off situation, we have more coproduction right depreciation during this Q1 [ than ] we normally have, and that will be balanced during the following quarter.
We will now have Laurie Davison from Deutsche Bank.
It's Laurie here from Deutsche. Can we just run through the one-offs, please? The impacts of the negotiation that you mentioned with the platform operator in the quarter? I'm guessing this is Orange. So is this now fully resumed, if it is Orange? Or has this operator now returned to what you would regard as normal spending? Second quarter (sic) [ question ], was this impact more or less than the impact of Belgium? I realize you don't quantify Belgium, but was that carriage negotiation impact larger than the Belgium positive? And then you said -- the third question, you said that May was specific. Can you just describe or explain exactly what you mean there?
Well, just to explain May -- yes, sorry. Just to explain May, in France, we have a month where we have a lot of bank holidays, probably 4 or 5, which doesn't help any business, including our business, but that's normal. But that's just in terms of basis of [ comparison ]. We have, in May, 0 bank holidays. It doesn't explain anything. I just want to mention it because that doesn't help in terms of visibility and probably, except for tourism, it doesn't help in terms of daily business. Now -- but that's not a topic as such. Now concerning the impact of the negotiation of telecom, we have reached an agreement with all the 4 telecom operators. We agreed that -- well, of course, now we are starting on a new basis. It has some impact because if you look at what has been the telecom sector revenues during the first quarter, there is a drop in growth revenues for this sector of 22.6% drop for the telecom sector. That's gross revenues. Nevertheless, even if it's different from math as you know, but that is not the trend of the market, of the sector. So I'm just saying that, yes, it has some consequence. It's -- in our accounting document, you will find the figures -- you will find the figure. And yes -- but that should not impact anymore Q2. We have agreed with them, and we are now on a new basis of business with them. Now we -- when we talk about Belgium, we said that we don't give the amounts directly with Belgium. I'm just saying that it has some impact. I mean, we have some revenues coming from the Belgium.But again, like you -- as you know, Q1 is not the -- on the advertising market, even in Belgium, is not very important. The demand is not as strong as in other quarter. The competition is tough just because of course the historical actors are trying to keep their clients. Of course, so we are competing, we are progressing. In line with what we can expect for Q1 the first year, there is no basis of [ comparison ], so saying we grow, of course we grow. But that's the reason why we won't -- don't -- will not disclose, at least quarter-to-quarter this year, what is the impact of Belgium. And again, no [ significant in terms of revenues ] for the moment. But growing step-by-step. And the Belgian market has not been so good during, from what we understand, for the Q1. But that's a normal seasonality effect on the market.
Okay. Can I just follow up on -- so I'm just trying to get to -- was the net impact in your first quarter revenues from the positive in Belgium and the negative from the cable -- or sorry, from the platform negotiation, a net positive or a net negative. If I do the math roughly on the telco sector, the drop of 23%. If we'd say that telcos would have otherwise been flat, that would have been about EUR 10 million negative. Belgium, you're saying, is going to get towards double-digit. So that sounds as though it's a net negative in the quarter. Would that be a fair interpretation of those one-offs?
Not really fair. No, not really. Just because first of all, I'm talking about growth rates -- gross revenues. I'm not talking about net revenues, and there is a difference, first of all. So be careful on this difference, but that could be quite significant, nevertheless. I would say that the second point is to say, we -- you can't evaluate that on Q1, but what I'm just saying is that in Q2, this one-off in Q1, and that will not impact normally Q2. There is no reason for having Q2 impacted by this. So we will come back with a normal business with all the telecom operators. And the first revenues coming from the -- and there is no direct link between the advertising and the first revenues we can get from the distribution agreement with the 3 others during the first quarter. Just because, again, we started in January -- end of January with [ Bouygues Telecom ] and Orange in March. So there are, of course, we have still Altice-SFR, but that's not -- for the moment, not significant. [ The impacts ] will start more significant in Q2 and second half of the year.
And our next question is from Conor O'Shea from Kepler Cheuvreux.
Just 3 questions as well. First question, just a follow-up from the previous question from Laurie on the telco spend. Is it fair to say that, on average, in a normal conditions, telco sector would represent high single-digit percentage of your net advertising revenues? Is that around the right level under normal conditions? Then second question, on the carriage deals. Obviously, one still -- the distribution deal is one still outstanding with CanalSat. But you must be in a fair position at this stage to assess the likely benefit. I think in the past, you've talked about a double-digit million revenue impact on a full year basis, which is obviously a wide range, but maybe suggesting it might come in, in the middle of that range. Is that -- is around EUR 50 million on a full year basis, is that still how you feel on track for that after most of your deals have been signed? And specifically, with the other broadcasting revenue line, which was down in Q1 because of lower interactivity, if the distribution revenues are coming through that line starting really in Q2, do you think that, that revenue line could stabilize or grow in the second quarter? And then just a very final question on aufeminin consolidation in the second half of the year. Is there anything we should sort of have in mind in terms of the potential contribution to group profitability and revenues in the line of integration costs, or that might limit the contribution of that acquisition for this year?
Yes. On your first question, the average spend for telecom sector in this global net revenue is not high single digit in terms of percentage. But it's -- sorry, not a high single digit, but a bit lower. And I would say that it's around 5% to 6% [ in the ] normal. I would just confirm the figure. Second question was -- we -- about the fees or the amount we have received from the distribution and -- operators, cable and telecom operators. We have not given any figures. I know that there are plenty of figures through the different scenario and assumption taken. It's difficult to give any figures, again, because we have not finalized with Canal. Second point is to say you have to take into account revenues net from transport costs. And in addition to that, you have to take into account whether you take revenues from the operators is global revenues or whether you take into account the previous revenue we had from MYTF1, which are globalized now with TF1 Premium. So we will come back on this with a lot of details as soon we've signed with Canal, and hopefully before summer, to give you more feedback. As Gilles Pélisson has said in the past, yes, we confirmed an impact of double-digit and multi-double-digit. That's make it between EUR 10 million and EUR 90 million, as we said, and probably clearly not close to EUR 90 million. But in same time, [ we have not negotiating during month together a few millions or lower digits ]. That's what I can confirm, and I'm sorry I can't at this stage give you a more precise figure. But again, step-by-step, we are progressing. And we are confident that we will come back to you as soon as possible with clear figures and this -- a different breakdown of the component of the agreement between what will be underlying. What you mentioned basically in this line, we have to break down what comes from revenues coming for the content and what is part of the services we offer them. So that is also something which will be taken into account in our reporting. Now yes, of course, in Q2, we expect this line to increase due to the fact that we've signed an agreement. And this line should increase as compared to Q1. Concerning aufeminin, as you probably know, we have not been in a position until last Monday to discuss or to have a lot of information as long as were under the Competition Commission review. Now we are just starting. And yes, aufeminin should contribute to our EBIT this year in a range, which difficult to give a lot of details. But you have their results last year, and that's a good basis to take as an assumption for the moment. I confirm -- I just confirm you that we're talking about 5% -- around 5% for the telecom sector as part of our revenues, percentage of our revenues.
Our next question is from Charles Bedouelle, Exane BNP Paribas.
Well, I actually have some questions on the retransmission fees, but I don't feel like I'm going to be very successful. I guess my only question at this stage, given you still have probably signed 80% of your contract or something like that, can you at least, whatever the accounting is, give us an idea of what it means in terms of proportion maybe of your operating profits? Are we talking 1%? 5%, 10%, 20%, 30%? Even a range would be useful. Because at some point, we'll have it, so why not give it to us when you have already a good view? That's my first question. And the second question is, I was trying to come back again on the question about Q1. What do you think, roughly, is the total impact of both the consolidation of [ signal swap ] a few days? And the drop in telcos on your trends, is that meaningful? Is it more than 1%? Just for us to get a view of it, that would be quite helpful. And I guess my last question is, how do you feel about the current advertisers' sentiment in France? We've seen a number of markets where the advertising trends are, I will call it pedestrian. And if you look at the macro indicators, they're actually quite high, almost as high as it gets in France and in many European markets. So do you think the advertisers are late in spending versus their optimism? Or do you think they will not spend despite being optimists? And curious to see your view here.
Well, very different question. With transmission fees, you should -- you try other way. But difficult to give more information, again, as part of the business, and especially with Canal. There are a lot of figures. And I would say simply that, again, double-digit impact on our EBIT, and again, not -- I mean, not more than what I have already said. And full impact next year because, of course, this year, it will be a half year impact for the 4, and starting with some of them beginning of this year, but step-by-step. Now when we're talking about total impact on the advertising revenues through the telecom sector and so on. And the fact that, of course, we had this [ tentative signal ] by Canal, which has some impact on the audience, and as a consequence, some slight impact on revenues. We are talking about a few millions. But of course, if you look at what is the growth or not the growth for a quarter like Q1, a few millions make the difference in terms of rates, and especially when you apply the rates to a large basis as compared to a smaller one, as usual. So I'm just saying that it had an impact, a few millions. We're not talking of double-digit amount. We are talking about single digit, and we're talking about a few million. But of course, that makes the difference in terms of trend, and that will be a one-off for Q1. Now concerning the advertisers and the current mood or the current way we look at it, I would say that in the French market, our feeling is that we're talking -- or to take a word in terms of late advertising, meaning that they have -- some of them have a bit postpone or delay some of their investment, especially some of them waiting for the World Cup. And that is probably part of the kind of year we have, as you know. So more -- if I would just summarize, more in terms of there are, for the moment at this stage, a bit delaying some of their investment. And hopefully, that is -- will be converted. When you delay something, you are never 100% sure that will -- you will do it. But in your mind, you will do it. So just as a summarize, yes, more a delay process, if I may say, as compared to other trend we had in the past, that less investment or a decision to cut their budget or to spend less than expected.
Just a very quick follow up on that. And I understand it's philosophical, I won't take too much time. But when you do your calculation about the value of the rights, did you take into account the fact that you may have delays, which in fact, you see what you gain for the rights. But do you take into account the fact that maybe you get less spending before and after? That's my first question. And the second question, I suppose, yes, there is the World Cup, but we've seen in many markets, where you don't have really World Cup [ or up ] in Italy or Spain where, actually, the advertising growth is just not very good. So I was just wondering if you think it's just linked specifically for TF1 to the World Cup. Or do you think there is something else going on?
Now of course, we are taking and we are looking at different scenario, whether they will spend before and after, what is the consequence of World Cup, and of course, based on historical data, as we can try to [ module-ize ] and so on. But in the same time, there are plenty of other parameters which are coming into this scenario for them. And including macro and what is before, what is after and so on. So you can imagine all this. And of course, we are working on this and trying to find the best scenario, the best assumptions we can take in order to look at what is the profit or what is the rationale behind those rights. We are, of course, doing a follow up on this. And we are taking, based on the experience, looking at what has happened during the last World Cup, during the different other events. All of this is of course part of the work we do -- we are doing. Now on the -- but it remains quite important. And of course, we are -- and it's clear for you, we are in a competitive environment. So we have to compete [ with other ] on the market. And that is something, which -- of course, is something which helps in the competitive environment. Concerning your other question, which was do you -- do we think that, that's specific to TF1 or to the market? We are cautious because of the visibility, but there is no negative sign on the market -- on the French market today. It's tough, strong competition. The question is, more for us, how -- the volume of advertising. And as you've probably -- you've seen that in Q1, there has been, from our competitor, a significant increase in volume, number of minutes which should be -- of advertising which has been broadcasted. And of course, the question on this market is partly the value we can get now from a trend where we have reached a number -- or a volume of advertising, based on the existing regulation, which is quite high for all of the different actors. So that's where we stand, end of Q1.
Our next question is from Julien Roch from Barclays.
Four questions, I'll ask them in order. When you answered about Q2 trends, you said that there was no change in trends versus the last 2 quarters. But Q1 was up 0.3% and Q4 was up 2.6%. So that's quite different trends. So is it closer to 0.3%? Is it closer to 2.6%? Or should I take the average?
Well, for this first question, I was talking about the market, not specifically to Q2 to TF1. But I was just saying that the trend in the market is in line with what we had, even if you can say that the trend is not exactly the same in Q4 for our business and in the Q1. Now having said that doesn't help too much. So what I can say -- [ just to say ] that we have not any negative sign on the markets and that the question of Q2 and the following quarter will be more of a question of value than a question of demand and the capacity to improve the value of the market. So that's what I can say in terms of trend. The demand remain at a level which is satisfactory, everything being the same again and not January and February, but as compare January to February last year, there is no sign of -- no negative sign.
Okay, my second question is on aufeminin. They reported their revenue -- or their results for Q1 already. Organic was quite poor at minus 2%, especially when you compare with 12% on average in the last 5 years. What happened? And do you think it's the organic will stay negative for the whole of 2018?
Well, we've not -- for the moment, we have not been in a position to go down in aufeminin. We've not made the closing of the deal. We are just in between the Competition Commission clearance and the closing. Nevertheless, what we can say at this stage is, from what I've understood and from what we know, that we are in a business where there has been, during last year and probably the trend remain partly due to the transformation, linked with some costs of the transformation of some of their business. And of course, they have to make a few investment. In some investment, they want to develop the business. As an example, they have been -- they have invested last year to be more present or present in country like Japan. They have made some investment in the United States for their platform, in Livingly. And so we can just interpret or we can take the assumption that in Q1, as a long tail from last year, they had to go further in terms of investing in some of their business, which explain the Q1. That is our interpretation. I can't say much more about it because of this situation, but we will, of course, give you more details and explanation as soon as we'll be in the position to close the deal and to look at the different assumption or reason. So it's just kind of a -- just a view from TF1. But again, I'll just remind you that there are regulation. We have not closed. We don't -- we had no opportunity to do anything in terms of clear and detailed on the information. We have not much more information than what you have as long as there is no closing and as long as this company is a listed company.
Okay. My third question is Stéphane Richard, in an interview in Le Parisien the 18th of April, said that they were paying you EUR 5 million before and now they've slightly doubled the amount of money they were paying you. So he actually gave the exact number. Do you agree or disagree with those numbers?
Well, I'm not in a position to agree or disagree with Stéphane Richard. The only thing we can say is I know what we've signed. Second point is to say that we can't understand exactly what we're talking about. I'm just saying, again, that figures has some sense. And if those figures, any figure has some sense, we have to look at what is taken into account in what correspond to. We are talking about the services we will provide to operators. We are talking about remuneration of our content. And that part of -- that the contribution, that's what we expect from all operators. And I will not quote any figures coming from Charles Bedouelle or Stéphane Richard or any person today.
Okay. So no numbers, fine. But will it be more logical to consider that the numbers given by Stéphane Richard are gross or net? i.e., do they -- would it be logical to think they include how much you'll have to pay them for transport or not?
Well, you should ask Stéphane Richard if he is talking about net and gross. I can't -- I don't understand exactly where those figures are coming from. And you can't ask me to explain what are the figures and what kind of figures as given somebody else. I can't comment on what Stéphane Richard is giving in his figures. And that's a good reason for me for not giving any figures today and not to make things more complicated than what journalist or analyst could take into account. So at least we are just saying wait a bit and we'll give you clear figures. I'm not giving to anybody, press or analyst, figures which are not corresponding to a clear point of the business. And again, there are confidentiality agreement, so I have to respect the confidentiality we have signed.
Our next question is from Thomas Coudry from Bryan Garnier.
I have 2 questions, please. First one, just a quick follow up again on this -- on the cost for those distribution rights with the telcos. Regardless of the number exactly, can you please just confirm that the actually -- the amount that you will get from these distribution agreements will go straight to the EBIT and will not be used partially to finance other additional costs in the company? That was my first question. And then the second question is I would like to hear you, an update on the French Hulu discussions that we are hearing a lot today, the SVOD project as France Télévisions seems to be paused, why there are there discussions between you, M6 and France Télévision to create a global SVOD service? So can you please update us on these discussions and what the point of the TF1 group is?
Well, thank you for your question. On the first point, what I can say is that, first, those agreement, as Gilles Pélisson has said, should have a double-digit impact, double-digit in terms of revenues as well as double-digit impact altogether on the EBIT. Now depending on what you take into account, depending of IFRS standards. Because figures and accounting correspond to some rules. So we would apply the IFRS standards in order to take into account those revenues. And there are gross and net, as Gilles Pélisson has already explained, figures because of what are the terms and conditions; what are the discounts; what is, at the end, the sum of cost taken according to the standard. So basically, no, I can't confirm you that whatever figures you get, you will get figures directly go to the EBIT. What I can say that is -- agreement has contribution, a double-digit contribution to the EBIT. And that is a double-digit as well on revenues. But there are some, depending on what you're applying in terms of standards and the application of the standards, you have a difference between revenues and EBIT. Now the other thing I can say is -- on this is that, for the moment, again, there are 2 component in this. Services, and services may have some costs when we provide additional services. And there are the contribution and there's a portion which correspond to the content. And of course, it's a bit different in terms of the way you can review the contribution to the EBIT, of course. So -- but those revenues have no reason to contribute to other business. That should contribute to the improvement of the global profitability of the group. If that is at the end of your question sign, are you going -- to invest in other kind of other business or linked with this? But the answer is no. That is a contribution to finance the existing. And what we invest, as Gilles Pélisson said, what we invest in content, we invest nearly EUR 1 billion per year. We think that it makes sense to have some contribution, some remuneration of those content by the operators, and directly, subscribers, and the services we provide. And for the services, as you know, there could be some costs, existing or additional minimum cost. Now concerning the French Hulu discussions, as you said. You can't -- hopefully, you can't prevent all the different actors to discuss about what could be done. And of course, that has been the case in the past. That's not the first whatever rumor or whatever. Yes, all actors are thinking about and discussing on a regular basis because of course, we have to face new competition. We have to face Netflix strategy. So could be some discussion, but that's the only thing we can say. Now I'm not confirming at all whatever rumors on the France Télévisions, SVOD, M6 and TF1, whatever. I'm just saying that it makes sense for all actors to think about this Netflix strategy and how, on their own or in a different way, answer this situation.Is there any more questions?
Thank you. We have -- we currently have no other questions. Thank you.
Okay. If there is no more question, then thank you for attending this conference call. Have a good evening, and we will meet in July for the Q2. Thank you.
Thank you. Ladies and gentlemen, this concludes today's web conference. Thank you all for your participation. You may now disconnect.