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    111125 mtg corporate presentation   final 111125 mtg corporate presentation final Presentation Transcript

    • Modern Times Group MTG AB“A Modern Media Groupfor Modern Times”November 2011 1
    • MTG = Made To Grow + Operationally Geared Revenues (SEK million)* EBIT (SEK million)*14,000 2,50012,000 2,00010,000 1,500 8,000 6,000 1,000 4,000 500 2,000 0 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2002 2003 2004 2005 2006 2007 2008 2009 2010 Introduction 2 *Continuing operations excluding associated company income & non-recurring items
    • Unrivalled Broadcast FootprintSpanning 4 continents Operating 29 free-TV channels in 11 countries & Introduction3 38 pay-TV channels in 34 countries
    • Four Broadcasting Segments Free-TV Pay-TV Free-TV Pay-TV Scandinavia Nordic Emerging Markets Emerging Markets• 9 channels • 4 satellite platforms • 19 channels • 5 satellite platforms – • Virtual operator in 3rd Baltics, Ukraine & Russia party networks • 19 channels on 3rd party Sweden Estonia networks Norway Latvia Lithuania Denmark Bulgaria¹ Czech² Hungary Slovenia Introduction Ghana 4
    • Balanced Revenue MixIntegrated Operator Benefits Segmental revenue mix 2010 revenue mix 100% 90% 80% 70% 11% 60% 50% 43% 40% 30% 46% 20% 10% 0% 2006 2007 2008 2009 2010 Free-TV Scandinavia Pay-TV Nordic Emerging Markets Advertising Subscription B2B / B2C • Balanced revenue mix of cyclical advertising sales & linear subscription sales • Unparalleled efficiency due to control of content, packaging, pricing & distribution Introduction5
    • 6Free-TV Scandinavia
    • Market Position Macro Profile GDP growth TV Ad spend per capita (USD)15% 20010% 150 100 5% 50 0% 0-5% Sweden Norway Denmark UK US-10% Sweden Norway Denmark UK US 2008 2009 2010 2008 2009 2010 TV as % of total Ad market TV viewing minutes per day (3+)50% 36040% 310 26030% 21020% Free-TV Scandinavia 16010% Denmark Sweden Norway UK US 110 Sweden Norway Denmark UK US 7 2008 2009 2010 2008 2009 2010
    • Market Position Digitalisation Complete Scandinavian TV landscape (2010) IPTV, 9% DTT, 19% Scandinavian TV landscape (2005) Norway – 1 Dec 2009 Denmark – Cable, 1 Nov 2009 Satellite, 52%Cable, 55% Sweden – 1 Feb 2008 19% Satellite, 19% DTT, 7% Free-TV Scandinavia Analogue Terrestrial, 20% 8
    • Market PositionPrimary Challenger Sweden Norway Denmark Position #2 #3 #2 National penetration    Combined commercial 38.4 22.0 23.1 audience share (15-49) Free-TV Scandinavia Catch-up services Yes Yes Yes Sold on ’bundled’ basis Yes Yes Yes9
    • The OpportunityBreaking the Monopoly Free-TV Scandinavia10
    • Seizing the Opportunity The “Media House” Model (Sweden) Complementary channel profiles Average weekly reach (15-49) 100% Old & Male Old & Female 90% +0% 80% +24% 70% +10% 60% 50% 40% 30% 20% 10% 0%Young & Male Young & Female Bonnier MTG ProSiebenSat.1 Free-TV Scandinavia Source: MMS 2003 2010 11
    • The Next PhaseUntapped Potential Regional share of total advertising Total regional advertising (NOK / DKK / SEK billion) 15 Print, 63% Direct advertising, 14% 10 SEK 14 bn 5 Internet, 14% 0 Radio, 4% TV, 5% 40% 60% 50% Regional TV advertising • Expansion of number of regional broadcast zones from 6 to 19 in Q1 2012 MTG, 7% • Bundled TV, Radio & Internet Ad sales package with TV4, 87% dedicated sales force of 120 people SEK 700 mn Free-TV Scandinavia • Local Ad prices as much as 2x national prices Other, 6%12 Source: IRM Media, Regional market report, April 2011
    • Free-TV ScandinaviaOperating Results (SEK million)• Ongoing TV ad market shares gains due to: 4,500 50% - rising penetration levels - rising audience share following new channel 45% 4,000 launches - reducing national CPT discount to incumbent 40% 3,500 35%• …plus focus on growing share of local ad sales 3,000 30% 2,500• Overall shortage of inventory supply driving up 25% annual contract & spot prices 2,000 20%• Sales only down 1% at constant exchange rates in 1,500 2009 recession & up 16% again in 2010 recovery 15% 1,000 10%• Sales up 8% at constant exchange rates for first 9 months of 2011with increased EBIT margin of 500 5% 25.2% 0 0% Free-TV Scandinavia 2006 2007 2008 2009 2010• Anticipated FY 2011 OPEX increase of <10% at Revenue EBIT EBIT margin constant exchange rates13
    • 14Free-TV Emerging Markets
    • Market Position Macro Profile 20% GDP growth 400 TV ad spend development 15% 350 10% 300 5% 250 0% 200 CAGR 0.7% -5% 150-10% 100-15% 50-20% Index, CEE markets 2008 2009 2010 Index, Western Europé TV ad spend per capita (USD) TV viewing (minutes per day) 60 50 300 40 30 200 Free-TV Emerging Markets 20 100 10 0 0 2008 2009 2010 Minutes per day 2010
    • Market Position Primary Challenger Czech Estonia Latvia Lithuania Bulgaria Hungary Slovenia Ghana Russia RepublicPosition #1 #1 #1 #2 #2 #3 #2 - #4Combinedcommercial 42.2% 34.4% 45.7% 28.5% 28.0% 8.2% 11.0% 9.9%audience share (15-49) (15-49) (15-49) (15-54) (18-49) (18-49) (18-49) (14-49)(targetdemographic)Catch-up services Yes Yes Yes No Yes No No No Yes Free-TV Emerging MarketsSold on ’bundled’ Yes Yes Yes Yes Yes Yes N/A N/A N/Abasis 16
    • Scale Operations in Key MarketsBaltics, Czech Republic, Bulgaria Commercial Audience Share Financial performance (SEK million)45% 2,000 60%40% 50%35% 1,50030% 40%25% 1,000 30%20% 20% 50015% 10%10% 0 0% Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 2007 2008 2009 2010 Czech Republic (15-54) Bulgaria (18-49) Revenue EBIT EBIT margin Pan-Baltic (15-49) • Clear market leadership in Baltics with >40% pan-Baltic target group share of viewing as advertising Free-TV Emerging Markets spending returns to growth in 2011 • Investments in schedule & new Prima Love channel boost target audience share in Czech Republic & enable advertising market share gains in low growth environment in 2011 • Stable combined audience share in Bulgaria but no recovery in advertising spending in 2011 17
    • Free-TV Emerging MarketsOperating Results (SEK million) 2,500• Sales up 8% at constant exchange rates for first 9 months of 2011with substantially reduced 2,000 operating loss• Ongoing investments in Hungary, Slovenia & 1,500 Ghana off-set profits in Baltics, Czech Republic & Bulgaria 1,000• Anticipated return to high growth & high margins but recovery currently lagging W Europe 500• Well-positioned overall in often duopolistic markets 0 2006 2007 2008 2009 2010 Free-TV Emerging Markets -500 Revenue EBIT18
    • Participating in Russian GrowthCTC Media• 38.1% shareholding in Russia’s leading 25% Audience share (4+) independent TV broadcaster 20%• Equity stake acquired for USD 83 million - 15% equity market value of ~USD 2.2 billion 10%• Co-Chairmanship & total of 4 Board seats 5%• 3 national Russian TV networks & 1.5x combined 0% power ratio = ~19% TV advertising market share• Sales up 15% y/y in ruble terms to USD 601 million in 2010 with OIBDA margin of 34%• Cash dividend payments of USD 80 million in 2010 and USD 130 million in 2011 CTC Media Russian Ad sales growth 700 000 Operating results (USD millions) 48% (RUB) 600 000 500 000 32% 400 000 Free-TV Emerging Markets 300 000 19% 200 000 13% 100 000 -3% 0 2005 2006 2007 2008 2009 201019 2006 2007 2008 2009 2010 Sales EBIT
    • 20Pay-TV Nordic
    • Market PositionPremium Content Provider ofChoice• MTG & 3rd party Free-TV channels• MTG thematic sports channels – Viasat Football, Viasat Hockey, Viasat Motor, Viast Golf, Viasat Sport HD• MTG thematic movie channels – TV1000 Nordic, TV1000 Action, TV1000 Family, TV1000 Classic, TV1000 Drama• MTG thematic documentary channels – Viasat History, Viasat Nature, Viasat Explorer, Viasat Crime• Leading 3rd party premium channels – music, news, documentaries, kids, nature etc• MTG & 3rd party HD channels Pay-TV Nordic21
    • The Evolving Opportunity Technology Changes Consumer Behaviour Gatekeeper Virtual OperatorOwned & Operated Viasat Channels in Independent in 3rd Party Satellite Platform 3rd Party Networks Internet B’band Networks Environment Pay-TV Nordic 22
    • Seizing the OpportunityGrowing Viasat...ellite Satellite Premium subscribers (000’s) Premium satellite ARPU (SEK) 750 5,000 700 4,000 650 3,000 600 2,000 550 1,000 500 0 2006 2007 2008 2009 2010 2006 2007 2008 2009 2010 Value-added services (000’s) • Operating in Europe’s most competitive & 250 digitalised pay-TV market 200 • Satellite gradually losing share to other distribution forms BUT Viasat gaining market 150 share in the satellite environment 100 • Clear premium pay-TV market leader 50 • Low churn levels following acquisition of key Pay-TV Nordic sports rights + new channel launches 0 2006 2007 2008 2009 2010 • Steadily rising premium satellite ARPU due to price rises & increasing penetration of VAS23 HDTV PVR Multi-room
    • Seizing the OpportunityThe “Platform Agnostic” Approach Premium subscriber development (000’s) 1 200 1 000 800 600 400 200 0 2006 2007 2008 2009 2010 DTH satellite 3rd party networks 1991 Jun 2008 Oct 2009 Mar 2010 Jun 2010 Pay-TV Nordic24 *IPTV subscribers only for 2006-2008; total 3’rd party network subscribers for 2009 and 2010
    • Seizing the OpportunityEntertainment “at your Command”First to Market with Full Service‘Over-The-Top’ Solution Mobile Set -Top Box• Anytime Access all services ‘on demand’• Anywhere Access subscription online Tablet Media Players• Any Device Enjoy subscription on multiple PC/Mac devices in and out of home Game consoles Embedded TV Set Applications OTT Set-Top box Pay-TV Nordic25
    • Pay-TV NordicOperating Results (SEK million)• Top line growth driven by 3rd party subscriber 5,000 50% acquisition & rising satellite premium ARPU 4,500 45%• Margins stable due to combination of underlying 4,000 40% improvement with investments in sports rights, 3,500 35% new technologies & additional channels 3,000 30%• Highly cash generative & proven resilience to 2,500 25% economic cycle 2,000 20%• Revenues up 8% at constant exchange rates for 1,500 15% first 9 months of 2011with increased operating margin of 19.3% 1,000 10% 500 5% 0 0% 2006 2007 2008 2009 2010 Revenue EBIT EBIT margin Pay-TV Nordic26
    • 27Pay-TV Emerging Markets
    • Market Position Pioneering New Frontiers 2003 2004 2005 2006 2007 2008 2009 2010 2011Countries 7 11 15 22 23 24 25 25 28Channels 2 3 5 6 7 8 10 15 19Satellite 28 Baltics Ukraine Russiaplatforms
    • Seizing the Opportunity Growing the Subscriber Base500 Satellite subscribers (000’s) Mini-pay subscriptions (millions) 60,000400 50,000300 40,000200 30,000100 20,000 0 10,000 2006 2007 2008 2009 2010 2006 2007 2008 2009 2010 • Viasat is the only satellite Pay-TV operator in the • Business launched in 2003 with sale of Viasat Baltics – premium offering with stable subscriber movie & documentary channels to base & ARPU 3rd party networks in C&E Europe • Includes Ukrainian platform since Q1 2008 & • Now more than 60 million subscriptions to Russian platform since Q1 2010 19 Viasat movie, documentary and sports Pay-TV Emerging Markets channels to ~2,500 3rd party networks in 28 countries including US • Launch of 4 pay-TV channels in Africa & 2 HD channels in CEE, Russia & CIS 29
    • UkraineEurope’s 2nd Largest Territory TV distribution market share Total satellite market share 1% 100% 2% 0% 0% 80% 60% 40% 20% 0% 97% Free satellite TV Viasat NTV+ Cable (tot.) Pay DTH Free DTH Poverkhnost Other DTT (tot.) IPTV (tot.) Terr. Analogue Satellite pay-TV market share• Substantial market opportunity – Europe’s second largest country by land mass 2% 2% 5%• 50% of ViaStrong satellite platform acquired in Q2 2008 & further 35% acquired in Q2 2010 29% Pay-TV Emerging Markets• Selling premium packages of Viasat & 3rd party channels 63%• Already larger than NTV+ with unprompted brand awareness levels of over 60%• 5 year breakeven horizon from launch in 2007 Viasat NTV + Tricolor Viva Poverhnost TV30 Sources: Screen Digest, GFK and internal analysis
    • RussiaEurope’s Largest Territory TV distribution market share Total satellite market share 100% Orion- Raduga TV, Express, 2% 80% Platform NTV+, 10% 4% 60% HD, 1% 40% 20% 0% Tricolor, 83% Cable (tot.) Pay DTH Free DTH DTT (tot.) IPTV (tot.) Terr. Analogue Indexed subscriber growth (2010)• Even more substantial market opportunity – Europe’s largest country by population 250• Low levels of satellite penetration• 50% of Raduga DTH satellite platform acquired in 200 Pay-TV Emerging Markets Q1 2010 150• Mid-tier mass market offering with competitive offering of 80 MTG & 3rd party channels at 100 attractive price• 5 year breakeven horizon from launch in 2009 5031 0 Sources: Screen Digest and internal analysis Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
    • Pay-TV Emerging MarketsOperating Results (SEK million)• Top line growth currently driven by volume 1,000 50% (addition of satellite subscribers & mini-pay subscriptions) rather than value (low prevailing 900 45% ARPU levels) 800 40%• Profitability of mini-pay channels business 700 35% supports ongoing investments in Ukrainian & 600 30% Russian satellite platforms 500 25%• 2010 profitability impacted by full consolidation of Ukrainian platform from July & inclusion of Russian 400 20% platform from February 300 15%• Business highly geared to subscriber growth & 200 10% ARPU increases 100 5%• Revenues up 15% at constant exchange rates for 0 0% first 9 months of 2011with operating margin of 2006 2007 2008 2009 2010 Pay-TV Emerging Markets 6.2% Revenue EBIT EBIT margin32
    • 33
    • Financial Performance Flexible Position Income Cash flow Financial positionSEK millions FY 2010 SEK millions FY 2010 SEK millions FY 2010Sales 13,101 Net cash flow from Total debt 2,526 1,533 operationsEBIT (incl. Associates) 2,355 Cash & equivalents 500 -300Pre-tax profit Cash flow to investing 2,321 Net debt 2,026Net income from Cash flow to financing -707 1,750 Net debt / LTMcontinuing operations 0.7x underlying EBITDATotal net incl Net change in cash & 3,541 -135discontinued ops cash equivalents Available liquid funds 4,400• Significant impact on reported results • Cash flow from operations up 48% & • New unsecured SEK 6.5 billion 5 year of y/y strengthening of SEK reporting equivalent to 70% of Group EBITDA revolving multi-currency credit facility currency vs. operating currencies arranged in October 2010 • Receipt of USD 31 mn (SEK 216 mn)• Annual tax rate of 25-30% of dividends from CTC Media in 2010 • CAPEX running at <1% of sales & intention to pay USD 130 mn in 2011 34
    • Capital AllocationReinvesting in GrowthCash flows from Scandinavia invested intoEmerging Markets• 1997: Launch of Baltic Free-TV operations• 2000: Acquisition of 95% of Hungarian operation• 2001: Acquisition of 75% of DTV in Russia• 2002: Acquisition of 36% of CTC Media in Russia• 2003: Launch of Mini-Pay business• 2004: Launch of Baltic Pay-TV platform• 2005: Acquisition of 50% of Prima TV in Czech Republic• 2006: Acquisition of 100% of Slovenian operation• 2007: Acquisition of 50% of Diema channels in Bulgaria• 2008: Acquisition of 50% of pay-TV platform in Ukraine• 2008: Acquisition of 100% of Nova TV in Bulgaria• 2008: Launch of channel in Ghana (W Africa)• 2010: Acquisition of 50% of pay-TV platform in Russia• 2010: Acquisition of additional 35% of Viasat Ukraine Financial Resources- Combined with ongoing launch of Free-TV & Pay-TV channels every year35
    • Capital AllocationShareholder Returns• 25% Return On Capital Employed for 2010 Annual Cash dividends (SEK) 16• 30% Return On Equity for 2010 14 12• CDON Group (MTG’s internet retailing 10 operations) distributed to shareholders in 8 December 2010 with market value of 6 >SEK 2 billion 4• Increased cash dividend of SEK 7.50 per 2 share approved by AGM in May 2011 & 0 distributed in Q2 2011 2007 2008 2009 2010 Ordinary Extraordinary Financial Resources36
    • 37
    • The Lean & MeanBroadcasting Machine• Operationally geared growth company with balanced & diversified revenue mix• Driving growth primarily through organic expansion & start-ups• Challenger to incumbents in structurally evolving markets• Successful multi-channel, multi-platform, multi-territory media house model• Efficient integrated operating structure yields competitive advantage & synergies• Investing healthy cash flows from Nordic region into emerging markets• Strict cost control, cash management & capital allocation• Strong & flexible financial position• Delivering enhanced shareholder returns Summary38
    • For Further Information, please visit www.mtg.se or contact: MTG Investor Relations Tel: +44 7768 440 414 / +44 759 009 8188 Email: investor.relations@mtg.se Nasdaq OMX: ‘MTGA’, ‘MTGB’ Contact information39