Introduction & Strategy Objectives, Hans-Holger Albrecht, President & CEO

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Capital Markets Day 2010

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Introduction & Strategy Objectives, Hans-Holger Albrecht, President & CEO

  1. 1. Capital Markets Day Hans-Holger Albrecht, President & CEO Introduction & Strategic Objectives Modern Times Group MTG AB Nasdaq OMX Stockholm : MTGA, MTGB 1
  2. 2. Largest Broadcast Footprint in Europe • International entertainment broadcasting group • 60 Viasat channels are watched by 125 million people in 31 countries • Growth company with integrated Free-TV & Pay- TV operations & centralised play-out facility in London • Largest Free-TV & Pay-TV operator in Scandinavia & the Baltics • Second largest Free-TV operator in Czech Republic & Bulgaria with additional operations in Hungary, Slovenia & Ghana (W Africa) • Emerging Market satellite Pay-TV platforms in Russia & Ukraine + Pay-TV channels available 2009 in 25 countries incl. US Sales SEK 14,173 million • Largest Nordic Radio Operator & Online Retailer Operating Income SEK 1,654 million* No of employees 2,900 • 38.9% shareholder in Russia’s largest Listing Nasdaq OMX Nordic (Large Cap Mkt) independent television broadcaster - CTC Media Symbol MTGB (Nasdaq: ‘CTCM’) * When excluding SEK 270 million of associated company income *Excluding -3,352 million of non-recurring items and SEK associated company income & extraordinary items Modern Times Group MTG AB Nasdaq OMX Stockholm : MTGA, MTGB 2
  3. 3. A Modern Media Group for Modern Times Viasat Broadcasting Other Business Areas Free-TV Pay-TV Free-TV Emerging Pay-TV Emerging Radio Scandinavia Nordic Markets Markets • 10 Free-TV channels • Satellite platform • 22 Free-TV channels • Satellite platforms in the • Virtual IPTV Operator Baltics, Ukraine (85%) & Sweden Russia (50%) • 24 Pay-TV channels available on 3rd party • 11 Pay-TV channels platforms available on 3rd party Norway platforms in 25 countries Sweden Estonia Estonia & Latvia Estonia & Lithuania Norway Latvia 2 Finland 4 Denmark Lithuania Internet Retailing Bulgaria 1 Czech 2 Hungary Slovenia Ghana 1 95% ownership 2 50% ownership Modern Times Group MTG AB Russia 1 3 38.9% ownership of CTC Media, Inc. Nasdaq OMX Stockholm : MTGA, MTGB 3 4 21% ownership
  4. 4. Double Digit Growth & Margins...whatever the weather! (SEK million) 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 2002 2003 2004 2005 2006 2007 2008* 2009* Revenue EBIT * Excluding non-recurring items Modern Times Group MTG AB Nasdaq OMX Stockholm : MTGA, MTGB 4
  5. 5. 2009 was a fundamental stress test for the business Modern Times Group MTG AB Nasdaq OMX Stockholm : MTGA, MTGB 5
  6. 6. Sustained Market Outperformance Segmental revenue mix 100% • Balanced revenue mix of cyclical advertising sales & linear subscription sales 80% 60% • Unparalleled efficiency due to control of content, 40% packaging, pricing & distribution 20% • Integrated operating structure yields synergies & 0% competitive advantage 2005 2006 2007 2008 2009 Free-TV Scandinavia Pay-TV Nordic Emerging Markets • Increasing exposure to historically high growth emerging markets with high operating leverage 2009 revenue mix • Enabled proven resilience to economic downturn in 2009 – Group sales up 8% y/y 21% – 12% operating margin 37% Advertising – SEK 1,546 million of cash flow from operations Subscription – Net debt reduced by SEK 888 million y/y B2B / B2C – 10% y/y increase in cash dividend to SEK 5.50 42% Modern Times Group MTG AB Nasdaq OMX Stockholm : MTGA, MTGB 6
  7. 7. Market Dynamics TV Advertising Spend (USD million) Advertising Spend Per Capita (USD) 600 100 400 75 50 200 25 0 0 TV / Total Ad Market TV Viewing (minutes per day) 60% 250 Russia: 56% 45% 200 USA: 37% 150 30% 100 15% 50 0% 0 2009 data except * 2008 statistics; ** 2007 statistics Modern Times Group MTG AB Nasdaq OMX Stockholm : MTGA, MTGB 7
  8. 8. Positioned to take further Market Shares Free-TV Operator Sweden Denmark Norway Estonia Latvia Lithuania Czech Hungary Bulgaria Slovenia Russia Rep #2 #2 #2 #1 #1 #1 #2 #3 #2 #2 #4 DTH Pay-TV Platforms Ukraine Russia Raduga Modern Times Group MTG AB Nasdaq OMX Stockholm : MTGA, MTGB 8
  9. 9. Structural Tailwind • TV’s share of consumer time & advertising market low & growing • Digitalization leveling playing field by increasing penetration of Free-TV Scandinavia challenger channels • Incumbents losing viewing & market shares to scale challengers • Multi-channel Media House strategy enabling enhanced reach & pricing • Digitalization forces migration to multi-channel environment • Virtual Operator status in emerging distribution platforms Pay-TV Nordic • Premium Sports & Movies drive demand • Increasing demand for Value Added services (HDTV, PVR, VOD) • Consumption growing faster than in Western Europe over time • TV is primary or only national reach impact media Emerging Markets • Lower cost per contact & higher growth potential than mature markets • Incumbents losing viewing & market shares to scale challengers Modern Times Group MTG AB Nasdaq OMX Stockholm : MTGA, MTGB 9
  10. 10. Strategic Objectives Set in 2007 Performance • MTG to report Group Net Sales of SEK 20 • 15% organic sales growth in 2008 & 7% billion in 2011 (including selected organic sales growth in 2009 despite acquisitions) with >10% organic annual sales growth recession – 2011 net sales target of SEK 20 billion not relevant without scale • Current Viasat Broadcasting C&E Europe acquisitions operations to generate net sales of SEK 5 billion in 2011 • Target no longer relevant after sale of DTV in H1 2008 • >20% operating (EBIT) margin for Viasat Broadcasting (excl. CTC Media) by end of • 16% operating (EBIT) margin for Viasat 2011 Broadcasting (excl. CTC Media) in 2008 • Current Viasat Broadcasting C&E Europe & 17% in 2009 operations (incl. CTC Media) to generate higher operating profit (EBIT) than rest of • Target no longer relevant after sale of DTV Viasat Broadcasting by 2011 in H1 2008 • MTG to report 30% Return on Equity for • 23% ROE for 2007-2009 3 year period with 2007-2011 5 year period 17% ROE in 2009 due to recession Modern Times Group MTG AB Nasdaq OMX Stockholm : MTGA, MTGB 10
  11. 11. ...Philosophy of & Comittment to Growth & High Margins Clear Operational & Strategic Priorities – Annual Organic Sales Growth of more 150 than 10% 140 130 – Operating Profit Margin of more than 20% 120 for Viasat Broadcasting (even excluding 110 associated company income) 100 – Increasing proportion of Emerging Market 2009 2010 2011 2012 Sales & Operating Income – Generation of healthy ROE & ROCE – Generation of healthy Total Shareholder MTG 10% SALES CAGR SME Direkt Consensus Returns Modern Times Group MTG AB Nasdaq OMX Stockholm : MTGA, MTGB 11
  12. 12. The Lean & Mean Broadcasting Machine • Operationally geared growth company with balanced (advertising & subscription revenues) & diversified (geographically) revenue mix • Investing healthy cash flows from Nordic region into emerging markets • 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 that yields competitive advantage • Strict cost control, cash management & capital allocation • Strong & flexible financial position • Delivering enhanced shareholder returns Modern Times Group MTG AB Nasdaq OMX Stockholm : MTGA, MTGB 12
  13. 13. A Well Established & Experienced Management Team Mathias Anders Laurence Martin Manfred Aronsson Hermansson Nilsson Miall-d’Août Lewerth Head of MTG Chief Financial Chief Operating Chief of Staff Chief of Staff Sweden Officer Officer Free-TV Pay-TV Employed 1993- Employed 1999 Employed 1992 Employed 2002 Employed 2001 1995 & 2008 Hein Espen Jørgen Irina Ulrik Mikael Hattestad Madsen Gofman Bengtsson Olander CEO MTG Norway CEO MTG Denmark CEO MTG Russia & CIS CEO Pay-TV CEO Employed 2001 Employed 1994 Employed 2002-2004 & Emerging Markets CDON Group 2008 Employed 2004 Employed 2000 Modern Times Group MTG AB Nasdaq OMX Stockholm : MTGA, MTGB 13
  14. 14. Today’s Agenda The Benefits of having the Largest Broadcast Footprint in Europe Laurence Miall-d’Aout Chief of Staff Free-TV & being an Integrated Free and Pay-TV Operator Cash Management & Capital Allocation Mathias Hermansson Chief Financial Officer Refreshments Anders Nilsson Chief Operating Officer The Multi-channel Media House Model Hein Espen Hattestad CEO MTG Norway Jørgen Madsen CEO MTG Denmark The New Pay-TV Paradigm Martin Lewerth Chief of Staff Pay-TV The New Game in Town Manfred Aronsson Head of MTG Sweden Lunch CTC Media Anton Kudryashov Chief Executive Officer Irina Gofman CEO MTG Russia & CIS New Frontiers Ulrik Bengtsson CEO Pay-TV Emerging Markets Refreshments Internet Retailing Mikael Olander CEO CDON Group Capital Markets Day Summary & Wrap-up Hans-Holger Albrecht President & CEO Football Match / Alternative Entertainment Drinks & Dinner Modern Times Group MTG AB Nasdaq OMX Stockholm : MTGA, MTGB 14
  15. 15. Capital Markets Day Hans-Holger Albrecht, President & CEO Introduction & Strategic Objectives Modern Times Group MTG AB Nasdaq OMX Stockholm : MTGA, MTGB 15

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