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120327 modern times group corporate presentation
 

120327 modern times group corporate presentation

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    120327 modern times group corporate presentation 120327 modern times group corporate presentation Presentation Transcript

    • Modern Times Group MTG AB“A Modern Media Groupfor Modern Times”March 2012 1
    • MTG = Made To Grow + Operationally Geared Revenues (SEK million)* EBIT (SEK million)*16,000 3,00014,000 2,50012,000 2,00010,000 8,000 1,500 6,000 1,000 4,000 500 2,000 0 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Introduction 2 *Continuing operations excluding associated company income & non-recurring items
    • Unrivalled Broadcast FootprintSpanning 4 continents Operating 28 free-TV channels in 10 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 • 18 channels • 5 satellite platforms – • Virtual operator in 3rd Baltics, Ukraine & Russia party networks • 20 channels on 3rd party Sweden Estonia networks Norway Latvia Lithuania Denmark Bulgaria Czech Hungary Ghana Introduction 4
    • Balanced Revenue MixIntegrated Operator Benefits Segmental revenue mix 2011 revenue mix 100% 9% 80% 44% 60% 47% 40% 20% 0% 2006 2007 2008 2009 2010 2011 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) 20010.00% 5.00% 150 0.00% 100 -5.00%-10.00% 50 0 Sweden Norway Denmark UK US 2009 2010 2011 2009 2010 2011 TV as % of total Ad market TV viewing minutes per day (3+)50.0% 310.040.0% 260.030.0% 210.0 Free-TV Scandinavia20.0% 160.010.0% 110.0 Denmark Sweden Norway UK US Sweden Norway Denmark UK US 7 2009 2010 2011 2009 2010 2011
    • 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 35.8 22.4 24.1 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) Old & Male Old & Female 100% 90% 80% -1% +22% 70% 60% +8% 50% 40% 30% 20% 10%Young & Male Young & Female 0% 2003 2011 Free-TV Scandinavia Source: MMS 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)• Overall shortage of inventory supply driving up annual contract & spot prices 5,000 50% 4,500 45%• Sales only down 1% at constant exchange rates in 2009 recession & up 16% again in 2010 recovery 4,000 40% 3,500 35%• Sales up 6% at constant exchange rates in 2011, with EBIT margin of 25% 3,000 30% 2,500 25% 2,000 20% 1,500 15% 1,000 10% 500 5% 0 0% 2006 2007 2008 2009 2010 2011 Free-TV Scandinavia Revenue EBIT EBIT margin13
    • 14Free-TV Emerging Markets
    • Market Position Macro Profile15% GDP growth 20% TV ad spend development10% 10% 5% 0% 0% -10% Estonia Lithuania Latvia Czech Republic Hungary Bulgaria-5% -20% Hungary Estonia Lithuania Latvia Bulgaria Czech Republic-10% -30%-15% -40%-20% -50% 2009 2010 2011 2009 2010 2011 50 TV ad spend per capita (USD) TV viewing (minutes per day) 45 350 40 300 35 30 250 25 200 Free-TV Emerging Markets 20 150 15 100 10 5 50 0 0 Czech Hungary Estonia Lithuania Latvia Bulgaria Czech Hungary Estonia Lithuania Latvia Bulgaria Republic Republic 2009 2010 2011 2009 2010 2011
    • Market PositionIncumbent or Primary Challenger Czech Estonia Latvia Lithuania Bulgaria Hungary Ghana Russia Republic Position #1 #1 #1 #2 #2 #3 - #4 Combined commercial 42.0% 37.2 44.0% 27.7% 28.1% 8.1% 18.8% 16.1% audience share (15-49) (15-49) (15-49) (15-54) (18-49) (18-49) (15-49) (6-54) (target demographic) Catch-up services Yes Yes Yes No Yes No No Yes Free-TV Emerging Markets Sold on ’bundled’ Yes Yes Yes Yes Yes Yes N/A N/A basis16
    • Scale Operations in Key Markets Baltics, Czech Republic, Bulgaria Commercial Audience Share Financial performance (SEK million)50% 2,000 30%40% 25% 1,60030% 20% 1,200 15%20% 800 10%10% 5% 4000% 0% 2006 2007 2008 2009 2010 2011 0 -5% 2008 2009 2010 2011 Czech Republic (15-54) Bulgaria (18-49) Hungary (18-49) Pan-Baltic (15-49) Revenue EBIT EBIT margin • Clear market leadership in Baltics with >43% pan-Baltic target group share of viewing as advertising Free-TV Emerging Markets spending returned to growth in 2011 • Investments in schedule & new Prima Love channel boosted target audience share in Czech Republic & enabled 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 in 2011 & profits for the full year 2,000• Ongoing investments in Hungary, Ghana & Slovenia off-set profits in Baltics, Czech Republic & Bulgaria 1,500• Anticipated return to high growth & high margins but recovery currently lagging W Europe 1,000• Well-positioned overall in often duopolistic markets 500 0 2006 2007 2008 2009 2010 2011 -500 Free-TV Emerging Markets 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 0.7 billion 10%• Co-Chairmanship & total of 4 Board seats• 3 national Russian TV networks & 1.5x combined 5% power ratio = ~19% TV advertising market share 0%• Sales up 9% y/y in ruble terms to USD 766 million in 2011 with OIBDA margin of 32.5%• Cash dividend payments of USD 130 million in 2011 & USD 80 million in 2012 CTC Media Russian Ad sales growth Operating results (USD millions) (RUB) 800,000 48% 700,000 600,000 Free-TV Emerging Markets 32% 33% 500,000 400,000 19% 300,000 16% 200,000 100,000 -3% 0 2007 2008 2009 2010 201119 2006 2007 2008 2009 2010 2011 Ad 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 – Viasat Film, Viasat Film Action, Viasat Film Nordic, Viasat Film Family, Viasat Film Drama & Viasat Film Classic• 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 OpportunityThe “Platform Agnostic” Approach Premium subscriber development (000’s) 1,200 1,000 800 600 400 200 0 2006 2007 2008 2009 2010 2011 DTH Satellite 3rd party network 1991 Jun 2008 Oct 2009 Mar 2010 Jun 2010 Pay-TV Nordic23 *IPTV subscribers only for 2006-2008; total 3’rd party network subscribers for 2009 and 2010
    • Seizing the Opportunity Growing Viasat...ellite1,000 Premium satellite subscribers (000’s) 6,000 Premium satellite ARPU (SEK) 5,000 800 4,000 600 3,000 400 2,000 200 1,000 0 0 2006 2007 2008 2009 2010 2011 2006 2007 2008 2009 2010 2011 350 Value-added services (000’s) • Operating in Europe’s most competitive & 300 digitalised pay-TV market 250 • Satellite gradually losing share to other 200 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 dec-07 dec-08 dec-09 dec-10 dec-11 • Steadily rising premium satellite ARPU due to price rises & increasing penetration of VAS Multi-room PVR HD 24
    • 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 in 1,500 15% 2011 with increased operating margin of 20% 1,000 10% 500 5% 0 0% 2006 2007 2008 2009 2010 2011 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 OpportunityGrowing the Subscriber Base Satellite subscribers (000’s) Mini-pay subscriptions (millions)600 70,000500 60,000400 50,000300 40,000200 30,000100 20,000 0 10,000 2006 2007 2008 2009 2010 2011 2006 2007 2008 2009 2010 2011 • 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 & • Nearly 65 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 & CIS29
    • 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%• Profitability impacted by full consolidation & ongoing investments in Ukrainian platform from 400 20% July & inclusion of Russian platform from February 300 15%• Business highly geared to subscriber growth & 200 10% ARPU increases 100 5%• Revenues up 13% at constant exchange rates in 0 0% 2011, with operating margin of 5% 2006 2007 2008 2009 2010 2011 Pay-TV Emerging Markets Revenue EBIT EBIT margin30
    • 31
    • Financial Performance Flexible Position Income Cash flow Financial positionSEK millions FY 2010 SEK millions FY 2011 SEK millions FY 2011Sales 13,473 Net cash flow from Total debt 1,592 1,797 operationsEBIT (incl. Associates) 2,544 Cash & equivalents 795 -115Pre-tax profit Cash flow to investing -727 Net debt 797Net income from Cash flow to financing -1,737 -1,289 Net debt / LTMcontinuing operations 0.3x underlying EBITDATotal net incl Net change in cash & -1,289 -55discontinued ops cash equivalents Available liquid funds 5,528• FY2011 results impacted by SEK - • Cash flow from operations stable y/y in • SEK 1.5 billion of SEK 6.5 billion 3,182 million of non-recurring items 2011 unsecured 5 year revolving multi- currency credit facility drawn as at• Annual tax rate of 25-30% • Receipt of USD 49 mn (SEK 319 mn) 31 December 2011 of dividends from CTC Media in 2011 & intention to pay USD 80 mn in 2012 • CAPEX running at <1% of sales 32
    • 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 year33
    • Capital AllocationShareholder Returns• 29% Return On Capital Employed for 2011 Annual Cash dividends (SEK) 16 14• 30% Return On Equity for 2011 12 10• Increased cash dividend of SEK 9.00 per share proposed to AGM in May 2012 8 6• Board of Directors has adopted dividend 4 policy to distribute at least 30% of recurring 2 net profit to shareholders as annual 0 ordinary dividend 2007 2008 2009 2010 2011 Ordinary Extraordinary Proposed Financial Resources34
    • 35
    • 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 Summary36
    • 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 information37