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Capital Markets Day 2011 Boris Podolsky
Capital Markets Day 2011 Boris Podolsky
Capital Markets Day 2011 Boris Podolsky
Capital Markets Day 2011 Boris Podolsky
Capital Markets Day 2011 Boris Podolsky
Capital Markets Day 2011 Boris Podolsky
Capital Markets Day 2011 Boris Podolsky
Capital Markets Day 2011 Boris Podolsky
Capital Markets Day 2011 Boris Podolsky
Capital Markets Day 2011 Boris Podolsky
Capital Markets Day 2011 Boris Podolsky
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Capital Markets Day 2011 Boris Podolsky

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  • 1. 2011 Capital Markets DayDelivering Shareholder Value Boris Podolsky Chief Financial Officer
  • 2. Exceptional Profitability by Broadcast Industry Standards 700 46.9% 46.7% 50% 43.8% 41.7% 45% 600 640 36.7% 40% 500 35% 506 601 400 472 30% 25% US$ mln 300 371 280 220 211 221 20% 200 174 15% 10% 100 5% 0 0% 2006 2007 2008 2009 2010 Operating Revenues OIBDA (bef ore one-off items) OIBDA margin Sustainable OIBDA margins above 35% 1
  • 3. High Levels of Cash Conversion 200 84% 90% 180 72% 80% 67% 186 186 160 66% 63% 70% 140 158 60% 120 133 50% US$ mln 100 117 40% 80 60 30% 40 20% 20 10% 0 0% 2006 2007 2008 2009 2010 Operating Cash Flow % of OIBDA converted Over 70% of OIBDA is converted to cash flow 2
  • 4. Investing in Business Development and Returning Cash to Shareholders 450 419 400 350 $515 mln of net acquisitions 300 of businesses since 2006 250 186 186 200 CapEx of 2.5% of revenues US$ mln 158 133 150 117 134 on average annually 100 40 42 Dividends of $ mln in 2010 $80 50 26 0 2006 2007 2008 2009 2010 Dividends Acquisitions CapEx Operating Cash Flow Intention to pay $100 million in cash dividends in 2011 3
  • 5. Expanding Distribution Network to Drive Advertising Revenue Growth Net acquisitions of regional stations in Russia $97 million of net regional 40 35 35 stations acquisitions since 2006 q 30 25 22 27 stations acquired US$ mln 20 15 14 15 11 Added over 500 affiliates 10 5 0 4 0 3 5 3 0 2 5 2 5 3 2 0 1 1 5 1 1 0 5 0 0 6 2 0 0 2 8 0 2 0 0 2 9 1 0 2 c A is u q s n tio e fr o a n io g ta ls , s n io to e n s a fc q c a h r d ie u 2006 2007 2008 2009 2010 +0.8 pp +0.1 pp +3.2 pp +3.0 ppTechnical + $100 mln in $penetration +6.6 pp +6.2 pp +5.4 pp +5.2 pp advertisinggrowth, y-o-y* revenues +6.6 pp +7.4 pp +4.1 pp* 2007: CTC + Domashny 2008-2010: CTC + Domashny + DTV Technical penetration translates into additional revenue 4
  • 6. Stable Cost Structure… Costs as % of revenue* Costs as % of total operating expenses* OIBDA Margin* 46.9% 46.7% 43.8% 41.7% 36.7% 70% 66% 61% Other 20% 16% 18% 20% 58% 59% 58% 22% 60% 13% 11% 8% 6% 9% 8% 6% 12% 13% 3% 7% 5% 4% 4% 50% 2% 3% 4% Advertising and 6% 5% 3% 3% 4% 4% 13% 13% 11% 5% 4% 8% promotion 12% 11% 40% 7% 8% 7% 6% 30% General & administrative 20% 39% 55% 59% 58% 59% 34% 35% 55% 32% 33% Salaries and 10% benefits 0% Amortization of 2006 2007 2008 2009 2010 programming rights 2006 2007 2008 2009 2010 (*) Excluding non-recurring items …and up to 50% of variable costs 5
  • 7. Investing in Programming to Drive Long-Term Audience and Revenue Growth Long-Target aud. g Target aud. g share 12.9% 11.3% 11.8% 12.2% 11.9% 100 share 1.8% 2.2% 2.1% 100% 700 100% 600 80% 80 80% Ad revenue 500 493 60% 60 60% 400 425 49 Amortization of US$ mlnUS$ mln 399 369 progr. rights 300 327 40% 40 40% 41 44U 200 Amortization of 20% 20 20% progr. rights/Ad 100 173 172 28 revenue 125 139 99 16 14 0 0% 0 0% 2006 2007 2008 2009 2010 2008 2009 2010 Target aud. 120 1.3% 2.4% 2.8% 2.8% 3.1% 100% share 100 80% 80 78 76 60% US mln 60 59 S$ 54 40% 40 30 20% 20 32 33 23 25 16 0 0% 2006 2007 2008 2009 2010 6
  • 8. Rising Shareholder Returns 450% 400% +350% CTC Media 350% 300% 250% +213% RTS Index 200% 150% +70% Nasdaq 100% Composite p 50% +24% 0% MSCI Europe Media -50% CTC Media significantly outperforms country and industry indices 7
  • 9. Management Incentive Program Aligned with Shareholders’ Interests Short-Term Long-Term Cash Equity Incentives I ti Incentives I ti Corporate targets Performance-based P f b d 2010: options KPIs 2010: • OIBDA margin • Revenue growth above • Total revenues Russian TV ad market • Audience share growth th • MSCI European Media Index outperformance • ROCE Functional targets Time-based options: • 4 years Project targets • 25% vesting annually Long- Long-term equity incentives represent over 80% of the fair value of the top g y management annual compensation 8
  • 10. To Conclude… OIBDA margin exceptional by industry standards Strong cash generation and low CapEx requirements Investments in the development of th b i I t t i th d l t f the business remain th priority i the i it Intention to increase dividends in absolute terms annually in absence of large scale M&A High return on capital employed g p p y Strong balance sheet with no debt ($177 mln net cash position at December 31, 2010) Commitment to deliver superior shareholder returns 9
  • 11. Full-Full-Year 2011 Outlook Approximately 20% total operating revenues growth in ruble terms* OIBDA margin of 34%-36% Capital expenditures (excluding acquisitions) of $25 million * (when adjusting the 2010 revenues for the commission payable to Video International for direct sales of CTC Media’s advertising inventory in Russia) 10

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