121030 mtg corporate presentation final

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121030 mtg corporate presentation final

  1. 1. 1
  2. 2. 5 business segments Free-TV Pay-TV Free-TV Pay-TV Other Scandinavia Nordic Emerging Markets Emerging Markets Businesses• 9 Free-TV channels • 4 satellite platforms • 19 channels • 5 satellite platforms – • Radio • Virtual operator in 3rd Baltics, Ukraine & Russia • Content production party networks • 19 channels on 3rd party Sweden Estonia networksNorway Latvia LithuaniaDenmark Bulgaria¹ Czech Hungary Ghana
  3. 3. Spanning 4 continents 31 free-TV channels in 10 countries Satellite pay-TV platforms in 9 countries3 Over 75 million mini-pay subscriptions in 31 countries
  4. 4. A track record of profitable growth Revenues & EBIT Return on capital employedSEK million16,000 30%14,000 27% 34% 24% 31%12,000 29% 29% 21%10,000 25% 18% 21% 21% 8,000 15% 12% 15% 15% 6,000 9% 4,000 6% 6% 2,000 3% 0 0% Revenues EBIT* Margin 4 Total EBIT excluding discontinued DTV and CDON Group operations and one-offs; ROIC excluding non-recurring items.
  5. 5. With a balanced revenue mix Segmental revenue mix 2011 revenue mix100%80% 9%60% 44% 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 & distribution5
  6. 6. Content remains King MTG TV channels broadcast 472,372 hours of entertainment in 2011 = 20,000 days of programming!Hours broadcast 500,000 450,000 400,000 350,000 300,000 250,000 200,000 150,000 100,000 50,000 0 MTG RTL SBS Bonnier CME Mediaset 6
  7. 7. With multiple windows Channel Pay-TV Free-TV On Demand Distribution *7
  8. 8. 8
  9. 9. Digitalisation has changed the landscape forever Scandinavian TV landscape (2011) IPTV 9% DTT 19% Scandinavian TV Norway – landscape (2005) 1 Dec 2009 Denmark – Cable 1 Nov 2009 Satellite Sweden – 52%Cable 55% 19% 1 Feb 2008 Satellite 19% DTT 7% Analogue Terrestrial 20% 9
  10. 10. And fragmented the universe From one channel in 1987 to over 50 in 2012 SWEDEN DENMARK NORWAY Competing for 162 Competing for 198 Competing for 16610 viewing minutes per day viewing minutes per day viewing minutes per day
  11. 11. BUT increased TV viewing Average TV Viewing per day With potential to grow (minutes) +50 min200 300 280190 260180 240170 +21 min 220 +5 min 200160 180150 160 140140 120130 100 2007 2011 Digitalization has increased viewing during last 71% higher viewing in US & 29% higher 4 years viewing in UK when compared to average • Sweden: +3% (first to enact analogue shutdown) viewing of 175 minutes in Scandinavia 2011 • Denmark: +34% • Norway: +14% 11
  12. 12. And driven TV ad market growth25%20%15%10% 5% 0%-5%-10%-15%-20% 2005 2006 2007 2008 2009 2010 2011 2012E Sweden Denmark Norway USA UK Europe incl. Russia12
  13. 13. As a % of the total Ad Market TV Share of Ad Market With potential to grow25% 50% +2.1% +1.4%20% +2% 40%15% 30%10% 20%5% 10%0% 0% 2008 2011 TV Share in Scandinavia was growing from 94% higher TV share in US Market 2008 to 2011 45% higher TV share in UK Market • 2.1% in Sweden compared to average TV share of 21% • 2% in Denmark in Scandinavia 2011 • 1.4% in Norway 13
  14. 14. With rising demand & prices Market Sold Out Ratios in prime time Market cost per thousand (indexed)100% 120 11095% 10090% 9085% 8080% 7075% 60 2008 2009 2010 2011 2012 ytd 2008 2009 2010 2011 2012E 14 Source: MTG research
  15. 15. The MTG Media House Complementary Channel Profiles Average Weekly Reach (15-49) 80% -2% +19% +8% Old & Male Old & Female 70% 60% 50% 40% 30% 20% 10% Young & Male Young & Female 0% Bonnier MTG SBSSource: MMS 2003 2011 15 Source: MMS
  16. 16. Commercial audience shares 15-49 target group% Sweden % Denmark50 7045 604035 5030 402520 3015 2010 5 10 0 0 MTG TV4 Group SBS MTG TV2 Group SBS% Norway Media house CSOV60 40 (Q4 to date)50 33.9 34.7 3540 3030 25 23.5 23.8 20.420 20 17.310 15 0 10 5 0 16 Sweden Denmark Norway MTG TV2 Group SBS 2011 2012
  17. 17. And viewing is moving online &capturing a new audience Viewing platform Viewing by Device Age 15-74 7% 1% 50% +16% 45% 40% 35% 92% 30% 25% Age 15-24 +77% 1% 20% 16% 15% +54% 10% +278% 5% 83% 0% Computer Mobile Phone TV-screen Tablet Screen Traditional TV Web-TV Mobile-TV Q1 2011 Q1 201217
  18. 18. Creating new revenue streams Web TV advertising market 350 300 250 MSEK 200 150 100 50 0 2009 2010 2011 2012e 2013e Where revenue per viewer and per hour are higher than in traditional linear TV Price = 2.8x higher online & even higher on mobile Number of streams on MTG TV Play services 70,000,000 60,000,000 50,000,000 40,000,000 30,000,000 20,000,000 10,000,000 -18 2010 2011 2012 2013
  19. 19. Online viewing shares 1,400,000 1,200,000 1,000,000 Consumed AVOD hours 800,000 600,000 400,000 200,000 0 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 SVT SBS MTG TV4 2012, Weeks MTG has outperformed other commercial media houses and achieved as high as a 51% commercial share of online viewing19
  20. 20. With higher online share thanlinearWeeks 1-40, 2012 Online share of Linear CSOV commercial viewing (15-49) 45% 43% 38% 35% 17% 21% TV4 numbers include TV4 premium viewing & clip sites + peak effect of Big Brother during Spring20 Source: MMS
  21. 21. And the regional opportunity Regional share of total advertising Total regional advertising (SEK 15 bn) (NOK / DKK / SEK billion) 15 Print, 63% Direct advertising, 14% 10 5 Internet, 14% 0 Radio, 4% TV, 5% 40% 60% 50% Regional TV advertising (SEK 860 mn) • Number of regional TV3 Sweden broadcast zones increased from 6 to 19 on February 27th 2012 MTG, • Combined TV, Radio & Internet Ad sales packages 9% • Local Ad prices as much as 2.13x national prices TV4, 84% Other, • Local TV ad market up 22% y/y in 2011, compared to 7% 2.5% y/y growth for total local ad market21 Source: IRM Media, Regional market report,2012 & MTG estimates
  22. 22. Where TV is again takingad market share Swedish regional advertising development 80% +77.5% +68.6% 60% 40% 20% +6.8% -12.4% -13.3% 0% -20% Print Television Radio Internet Direct advertising22 Source: IRM Media, Regional market report, April 2011
  23. 23. Lower growthBut healthy marginsSEK thousands5,000 50%4,500 45%4,000 40%3,500 35%3,000 30%2,500 25%2,000 20%1,500 15%1,000 10% 500 5% 0 0% 2008 2009 2010 2011 2011 9M 2012 9M Revenue EBIT EBIT margin 23
  24. 24. 24
  25. 25. A well-positioned portfolio Czech Estonia Latvia** Lithuania Bulgaria Hungary Ghana Russia Republic Position #1 #1 #1 #2 #2 #3 - #4 Combined commercial 40.7% 60.6% 40.2% 40.4% 28.4% 8.2% 18.8% 8.7%*** 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 Yes Yes No No Yes Sold on ’bundled’ Yes Yes Yes Yes Yes Yes N/A N/A basis * As at Q3 201225 * * Including LNT channels from Q3 2012 * * CTC Media channel only
  26. 26. With scale operations in key markets70% Commercial Audience Share Financial performance (SEK million) (Baltics, Czech Republic & Bulgaria) 2,000 30%60% 1,800 25%50% 1,600 1,400 20%40% 1,200 15%30% 1,000 800 10%20% 600 5% 40010% 0% 2000% 0 -5% 2006 2007 2008 2009 2010 2011 2012 Q3 2008 2009 2010 2011 2011 9M 2012 9M Estonia (15-49) Latvia (15-49)* Lithuania (15-49) Czech Republic (15-54) Revenue EBIT EBIT margin Bulgaria (18-49) • Clear market leadership in Baltics with 47% pan-Baltic target group share of viewing • Completed acquisition of LNT free-TV group in Latvia in June 2012 • Investments in schedule & new Prima Love channel boosted target audience share in Czech Republic & enabled advertising market share gains26 • Higher target audience share in Bulgaria enables market share gains • Ad markets have stabilised but not returned to sustained growth yet * Includes the consolidated LNT operations from Q3 2012
  27. 27. And equivalent consumer pricing Shopping list Shopping list BGN EUR Salami 4.79 Salami 3.48 Frozen fish 10.43 Frozen fish 8.55 Coffee 11.82 Coffee 5.34 Chocolate 4.14 Chocolate 2.24 Vodka 23.99 Difference: Vodka 8.91 Shower Gel 2.75 -6.4% Shower Gel 1.39 Detergent 8.46 Detergent 2.8 Powder 15.59 Powder 11.89 81.97 BGN = 41.9 EUR 44.6 EUR Bulgaria Germany27 Source: METRO Cash & Carry monthly catalogues
  28. 28. But low contact cost / ad spend CPT dynamics (2011)2.0 TV Ad spend per capita (SEK’000, 2011)1.51.00.50.028 Source: MTG research
  29. 29. So the opportunity is clear GDP growth in MTG EM territories Forecast GDP growth in MTG CEE (indexed) territories 400 5.0% 350 4.0% 300 250 3.0% 200 150 2.0% 100 1.0% 50 0 0.0% Estonia Latvia Lithuania GDP TV Ad Market Bulgaria Czech Hungary TV Ad market has outperformed Nominal GDP development by a factor of 1.2820 Source: IMF, TNS/MTG estimates
  30. 30. Returning market opportunity CEE TV ad markets where MTG is present109 SEK 8.6 billion8 SEK 2.2 billion7 SEK 6.4 billion6543210 2008 201130 Sources: Zenith Optimedia 2012/MTG Estimates
  31. 31. The African opportunityFree-TVChannelsProductionHouse Pay-TV Channels31
  32. 32. Well positionedFor market recovery2,5002,0001,5001,000 500 0 2006 2007 2008 2009 2010 2011 2011 9M 2012 9M -500 Revenue EBIT32
  33. 33. 33
  34. 34. Technology changes consumer behaviour Gatekeeper Virtual OperatorOwned & Operated Viasat Channels in Independent in 3rd Party Satellite Platform 3rd Party Networks Internet Networks Environment 34
  35. 35. Via…sat…ellite Premium satellite subscribers (000’s) Premium satellite ARPU (SEK) 800 6,000 700 5,000 600 4,000 500 400 3,000 300 2,000 200 1,000 100 0 0 2006 2007 2008 2009 2010 2011 2012 2006 2007 2008 2009 2010 2011 2012 Q3 Q3 Value-added services (000’s) • Premium satellite ARPU growth reflects price400 increases & penetration of VAS350300 • Increased competition in Denmark & change250 in subscriber mix in Norway negatively200 affecting premium satellite subscriber base150 • Continued focus on offering – launch of new100 50 HD & catch-up channels / rebranding of Viasat 0 Film – to moderate satellite subscriber dec-07 dec-08 dec-09 dec-10 dec-11 9M 2012 decline & drive ARPU growth 35 Multi-room PVR HD
  36. 36. Content leadershipHD channels • 11 new HD channels & 4 catch-up channels to be launched in Q4, following launch of 4 HD channels & 5 catch-up channels in Q1 & rebranding to Viasat Film36
  37. 37. A platform agnostic approach Viasat premium subscribers (Nordic) 1,400 1,200 1,000 800 600 400 ~1.6m ~4.2m households 200 households 0 Scandinavian Scandinavian 2006 2007 2008 2009 2010 2011 2012 satellite satellite & Virtual Q3 universe Operator agreements Premium satellite 3rd party network (IPTV, cable) 1991 2008 2009 2010 2010 201237 Sources: Viasat Broadcasting research
  38. 38. Entertainment at your commandFirst to Market with Full Service‘Over-The-Top’ Solution Mobile Set -Top Box• Anytime Access all services ‘on demand’• Anywhere Tablet Media Players Access subscription online PC/Mac• Any Device Enjoy subscription on multiple devices in and out of home Game consoles Embedded TV Set Applications OTT Set-Top box38
  39. 39. Taking further stepsLaunch of Viaplay Box • Viaplay streaming box • Viaplay to your TV • 25 linear channels • DTT connection • Full-blown media center* * * * *39 39 * Available via terrestrial signal
  40. 40. Opens up a whole new universe Satellite Virtual Operator OTT ~1.6 million ~4.2 million ~9.0 million 90% of Swedish households have over 2 MB/s broadband connection speeds40
  41. 41. Content Leadership TV & Movies1’stPay International titles Local titles2’ndPay
  42. 42. Content LeadershipPremium Sports Content * ** * In Sweden & Denmark ** In Denmark & Norway
  43. 43. Future sales growth to be driven by current investments (SEK million) 5,000 50% 4,500 45% 4,000 40% 3,500 35% 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 2011 9M 2012 9M Revenue EBIT EBIT margin • Increasing investments in Nordic pay-TV content, premium channels and Viaplay online pay-TV service currently expected to result in Nordic pay-TV EBIT margin of approximately 15% in Q4 2012 and 10-12% for full year 2013. The total Nordic premium pay-TV subscriber base (excluding Viaplay) is currently expected to continue to decline in Q4 2012 and for the full year 2013 due to the ongoing decline in the DTH subscriber base and lower than anticipated growth in the third party network subscriber base, and result in stable quarter on quarter total Nordic pay-TV sales in Q4 2012 and stable year on year sales for the full year 2013. The fast growing Viaplay online pay- TV service is expected to continue to grow its subscribers and revenues throughout this period43
  44. 44. 44
  45. 45. Expanding horizons 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012Countries 7 11 15 22 23 24 25 25 28 31Channels 2 3 5 6 7 8 10 15 19 23Satellite platforms 45 Baltics Ukraine Russia
  46. 46. Multi-dimensional opportunities Satellite pay-TV households in Cable & IPTV households, Eastern Europe (million) Eastern Europe (2011, million)40 6035 5030 402520 3015 2010 1050 0 Source: Screen Digest 201246
  47. 47. Eastern Europe Growth drivers Pay-TV penetration Relative TV market size Eastern Europe (%) (USD million) 80% 60% Russia 40% 1,211 20% 0% 4,458 Cable DTH (pay) IPTV TV advertising market Pay TV market Eastern Europe Western Europe Share of total pay-TV revenues40% 29% 29%30% 21%20% 7,296 9,414 31,36110% 5% 3% 5% 5% 38,838 1% 0% 2% 0% Russia Ukraine Poland Sweden Western Europe TV advertising market Pay TV market47 On-demand revenue Premium pay revenue Source: Screen Digest 2012
  48. 48. Seizing the Opportunity Viasat satellite subscribers Mini-pay subscriptions (millions) Baltics, Ukraine, Russia (000’s)600 80,000500 70,000 60,000400 50,000300 40,000200 30,000100 20,000 0 10,000 2006 2007 2008 2009 2010 2011 2012 2006 2007 2008 2009 2010 2011 2012 Q3 Q348
  49. 49. Establishing leading positions Share of viewing – Free TV and Viasat Top 10 pay-TV channels in Russia channels (Russia, 25-44*) (monthly reach, million people) 16 13.1 TV 1000 Russian Kino 21.2 11.3 10.7 10.6 12 TV 1000 20.6 9.5 Discovery Channel 19.4 8 Animal Planet 17.9 5.5 Moya Planeta 15.5 3.8 2.8 2.7 4 2.4 Eurosport 2.0 14.1 1.9 1.9 1.9 1.3 National Geographic 13.2 0 Viasat History 12.2 Sony Entertainment TV 11.9 Dom Kino 11.0 0 10 20 3049 * Russia 100,000+, 1/1/2012-30/4/2012, 05:00:00 - 29:00:00 Source: TNS Russia 2012, Screen Digest 2012
  50. 50. New HD Channels LaunchedRussia, Ukraine, the CIS & Baltics • All 3 channels available in Russia, Ukraine & CIS • TV1000 Premium HD – Premium tier movie channel with focus on first run premieres of award winning films from Hollywood studios and independent local distributors • TV1000 Megahit HD – Premium movie channel featuring first run premieres of the latest blockbuster titles from Hollywood and Russia • TV1000 Comedy HD – dedicated to US comedy moviesContent from major Hollywood studios50
  51. 51. Launch of UA.TV Utilizing growth opportunities Pay-TV market penetration TV market structure (%) (2011)35%30%25% Cable20% 39% DTH (pay)15%10% 58% IPTV5% DTH (freeview)0% 1% 2% Cable DTH IPTV • Substantial market opportunity – Europe’s 6th largest country by population • Pay-TV penetration in 2011 is still low, at close to 19.5% of TV HHs • Addressable market for DTH – 15.4 million non-cable HHs 51
  52. 52. Investing in growth Revenue split Total segment revenue & EBIT 2011 1,000 (SEK million) 50% 900 45% 800 40% 700 35% 600 30% 44% 500 25% 400 20% 56% 300 15% 200 10% 100 5% 0 0% 2006 2007 2008 2009 2010 2011 2011 2012 9M 9M Satellite Channels Revenue EBIT • Increasing investments in Russian and Ukrainian pay-TV content, HD channels and pre-paid satellite service in Ukraine currently expected to boost Emerging Markets pay-TV revenue growth levels and result in segment operating losses of less than SEK 20 million in Q4 2012 and less than SEK 50 million for full year 201352
  53. 53. 53
  54. 54. Cash is king Net operating cash flow Dividends received from CTC Media (SEKm) (SEKm) 1402,500 100% 1202,000 80% 1001,500 60% 80 601,000 40% 40 500 20% 20 0 0% 0 Q1 Q3 Q1 Q3 Q1 Q3 2010 2010 2011 2011 2012 2012 Net operating cash flow % of EBITDA converted54
  55. 55. Enables deleveraging Net Debt Available Liquid Funds(SEKm) (SEKm)4,500 7,0004,000 6,0003,500 5,0003,0002,500 4,0002,000 3,0001,500 2,0001,000 500 1,000 0 0 55
  56. 56. With complementary M&A Transactions to date 2000: Acquisition of 95% of Hungarian operation 2001: Acquisition of 75% of DTV in Russia 2002: Acquisition of 36% of CTC Media in Russia 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: Divestment of 100% of DTV to CTC in Russia 2008: Acquisition of 50% of satellite pay-TV platform in Ukraine 2008: Acquisition of 100% of Nova TV in Bulgaria 2010: Acquisition of 50% of satellite pay-TV platform in Russia 2010: Acquisition of additional 35% of Viasat Ukraine 2011: Distribution of 100% of CDON Group to MTG shareholders 2012: Divestment of 100% of Bet24.com 2012: Acquisition of 100% of LNT in Latvia 2012: Acquisition of 53% of Paprika Latino in CEE 2012: Acquisition of 80% of Zitius in Sweden 2012: Announced acquisition of 50% of TV 2 Sport in Denmark (closing subject to regulatory approval)56
  57. 57. And shareholder returns • Primary focus is on growth and reinvesting cash flow into operations + M&A • Balanced with TSR commitment – reflected in newly adopted policy to distribute at least 30% of recurring net profit as annual ordinary dividend Cash distribution (SEK) 40.00 Buybacks (value per share) 35.00 CDON spin-off 30.00 Extraordinary dividend per 25.00 share 20.00 Ordinary dividend per share 15.00 Net cash flow per share 10.00 EPS adj (excluding one-offs) 5.00 30% of EPS adj (excluding one- 0.00 offs) 2006 2007 2008 2009 2010 201157
  58. 58. For Further Information, please visit www.mtg.se or contact: MTG Investor Relations Email: investor.relations@mtg.se Nasdaq OMX: ‘MTGA’, ‘MTGB’58
  59. 59. 59
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