UPDATE 1-French broadcasters suffer as economy hits ad spending

Tue Feb 19, 2013 12:56pm EST

* TF1 posts 26 pct drop in 2012 operating profit

* M6 posts 11 pct drop in 2012 EBITA

* TF1 sees sales down 3 pct in 2013

* TF1 proposes flat dividend on 2012 profits

PARIS, Feb 19 (Reuters) - France's top two private broadcasters, TF1 and M6, posted lower profits last year as major advertisers cut spending in a stagnant economy.

TF1 said on Tuesday it expected revenue to fall 3 percent this year in a "deeply troubled economic environment" and promised stricter controls on programming costs to cope. Sales remained flat last year.

The stagnating French economy has led major advertisers to scale back their marketing budgets, affecting ad agencies such as Publicis as well as broadcasters.

French ad group Havas said separately that sales in both France and Europe were close to flat last year, and added that 2013 risked being another challenging year.

The economy is expected to grow only around 0.2-0.3 percent this year, French Foreign Minister Laurent Fabius said on Tuesday, after contracting 0.3 percent in the last three months of 2012.

"Following growth in the first quarter, the contraction in the ad market accelerated from May onwards," M6 said of last year.

TF1 posted a 26 percent decline in 2012 operating profit to 210.4 million euros on sales of 2.62 billion ($3.5 billion).

Advertising revenue at TF1's main channels slipped 2.5 percent to 1.77 billion euros, with growth coming mainly from the group's newer digital channels and sports channel Eurosport.

M6 said its earnings before interest, tax and amortisation (EBITA) slid 11 percent to 218.5 million euros last year. Sales fell 2.4 percent to 1.39 billion.

The decline in operating profit resulted in part from spending on broadcasting rights for the Euro 2012 soccer tournament, M6 said.

The group added that it had nonetheless outperformed the TV ad market by limiting the decline in its advertising revenue to 3 percent.

TF1, which competes with public broadcaster France Televisions as well as M6, said it would propose a flat dividend of 0.55 euros per share on 2012 results.

Havas said it posted an 8 percent rise in revenue overall last year to 1.78 billion euros, driven by the Americas and the Asia-Pacific region.

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