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MTG Q1 2012 Presentation

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  • 1. Modern Times Group MTG First Quarter 2012 Financial Results1
  • 2. 2Q1 2012 FINANCIAL RESULTS
  • 3. First Quarter 2012Record Q1 sales in an Investment Quarter• Sales up 4% y/y at constant & reported FX to SEK mn SEK 3,259 (3,125) mn 3,500 40% 3,259 3,125• OPEX up 8% y/y at constant & reported FX to 35% 3,000 SEK 2,919 (2,693) mn 30% 2,500• EBIT before associated company income of 25% SEK 341 (432) mn 2,000 • Total EBIT of SEK 542 (686) mn, including 20% SEK 201 (254) mn of associated company 1,500 income 15% 1,000 10%• PTP of SEK 591 (671) mn 432 500 341 5%• Net income of SEK 454 (490) mn 0 0% Q1 2011 Q1 2012• Basic EPS of SEK 6.68 (7.35) Revenue EBIT* EBIT margin Q1 2012 RESULTS * EBIT excluding associated income• Receipt of SEK 52 (61) mn of dividends from CTC Media3
  • 4. Operating review
  • 5. Free-TV ScandinaviaFinancial Highlights SEK mn• Sales of SEK 1,024 (1,023) mn 1,200 50% • Down 1% y/y in Q1 at constant FX 1,023 1,024 45% 1,000• OPEX up 14% y/y to SEK 866 (763) mn in Q1 40% • Up slightly less at constant FX 35% 800 • Focused programming investments in each 30% Scandinavian country & low OPEX growth in Q1 600 25% 20%• EBIT down to SEK 158 (260) mn in Q1 400 15% 260 • EBIT margin of 15%(25%) 10% 200 158 5% 0 0% Q1 2011 Q1 2012 Revenue EBIT EBIT margin Operating review5
  • 6. Free-TV ScandinaviaOperating Highlights Commercial Audience Share (15-49)Sweden 50%• Target audience share of 34.9% (33.8%) in Q1 45% • TV3 grew target CSOV both y/y and q/q • TV8 & TV10 up both y/y and q/q 40% • Ongong overall work to enhance 35% programming schedules 30% • TV3 launched in 19 regions on 27 February 25%Norway• Target audience share of 18.6% (22.0%) 20% • CSOV affected by increased competition & 15% performance of own productions 10% • Focus on improving both TV3 & Viasat4 & changes in key personnel 5%Denmark 0%• Target audience share of 24.9% (25.4%) • Q/Q development reflected improved ratings for local productions & sports events Sweden Norway Denmark in Spring schedules Operating review • TV3 CSOV up y/y and q/q & TV3+ and TV3 PULS CSOV up q/q6
  • 7. Pay-TV NordicFinancial Highlights SEK mn• Sales of SEK 1,249 (1,139) mn in Q1 1,400 1,249 50% 1,139 • Up 9% y/y at constant FX 45% 1,200• OPEX of SEK 1,031 (924) mn in Q1 40% • Up slightly less at constant FX 1,000 35% • Ongoing investments in Viaplay; higher y/y 30% sports content costs & rebranding of Nordic 800 movie channel portfolio 25% 600 20%• EBIT up 1% y/y to SEK 217 (215) mn in Q1 15% 400 • Operating margin of 17% (19%) 215 217 10% 200 5% 0 0% Q1 2011 Q1 2012 Revenue EBIT EBIT margin Operating review7
  • 8. Pay-TV NordicOperating Highlights Premium subscribers• Premium subscriber base down by 19,000 subscribers net q/q in Q1 1,200 1,000 • Decline in virtual operator subscriber base 800 Thousands due to ending of contract with Norwegian 600 IPTV operator in January & restatement of 400 subscriber base of another Norwegian 200 operator 0 • Underlying third party subscriber base grew in Q1 in line with expectations Satellite subscribers 3rd party network subscribers• Premium ARPU up 9% y/y in Q1 to SEK 4,866 (4,445) & from SEK 4,791 in Q4 11 Value added services • Continued growth in penetration of value 350 added services 300 Thousands • Continued y/y growth in third party network 250 subscriber base 200 150 100 Operating review 508 ViasatPlus HDTV Multi-room
  • 9. Free-TV Emerging MarketsFinancial Highlights SEK mn Free-TV Emerging Markets• Total sales os SEK 432 (420) mn in Q1 550 432 • Up 5% y/y at constant FX 450 420• OPEX down 6% y/Y in Q1 350 • Down less y/y at constant FX 250• Total EBIT up 39 mn y/y to SEK 8 (-31) mn 150 • Q1 EBIT margin of 2% 8 50 -31 -50 Q1 2011 Q1 2012• Baltic, Czech & Bulgarian sales of SEK 393 (371) mn in Q1 Revenue EBIT • Up 8% y/y at constant exchange rates Baltics, Czech Republic & Bulgaria SEK mn• Combined OPEX down 2% y/y in Q1 475 425 393 • Stable y/y at constant FX 371 375 325• EBIT margin of 7% in Q1 275 225 175 125 75 27 25 -3 -25 Q1 2011 Q1 20129 Revenue EBIT
  • 10. Free-TV Emerging MarketsOperating HighlightsBaltics Commercial Audience Share• Sales up 2% y/y in Q1 at constant FX 50%• Increased pan-Baltic commercial target audience 45% share of 40.5% (39.9%) 40%• Increased combined TV ad market shares in each of the Baltic countries in Q1 35%Czech Republic 30%• Sales up 16% y/y in Q1 at constant FX 25%• Continued significant y/y audience & advertising 20% market shares following continued investments in 15% programming schedulesBulgaria 10%• Sales down 5% y/y at constant exchange rates in Q1 • Decline continued to reflect overall Estonia (15-49) Latvia (15-49) weakness in the TV ad market & lower y/y Lithuania (15-49) Czech Republic (15-54) pricing levels Bulgaria (18-49)• Combined CSOV up both y/y and q/q Operating review10
  • 11. Pay-TV Emerging MarketsFinancial Highlights SEK mn• Sales of SEK 251 (215) mn in Q1 300 50% • Up 14% y/y at constant FX • Continued y/y subscriber intake in Ukraine, 45% Russia & Baltics 251 250 40% • Continued strong mini-pay growth 215 35% 200• OPEX up 5% y/y to SEK 217 (207) mn in Q1 30% • Up less at constant FX 150 25% • Ongoing investments in the satellite platforms 20% 100 15%• EBIT more than tripled to SEK 34 (7) mn in Q1 • Increased EBIT margin of 14% (3%) 50 10% 34 5% 7 0 0% Q1 2011 Q1 2012 Revenue EBIT EBIT margin Operating review11
  • 12. Pay-TV Emerging MarketsOperating Highlights Satellite subscribers 600• 91,000 net new subscribers added y/y • Subscriber base down net q/q due to 500 seasonal impact of high growth in Q1& Thousands 400 lower gross additions and increased 300 churn in Q1 200• Wholesale mini-pay business subscriptions up 100 13% y/y to 66,012 million & up 3% q/q 0 80,000 Mini-pay TV subscriptions 70,000 Thousands 60,000 50,000 Operating review 40,000 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 201212 Mini-pay TV subscriptions
  • 13. Other BusinessesHighlights SEK mn• Comprises MTG’s Radio, Bet24 and Modern Studios operations 450 400 407• Sales of SEK 407 (400) mn in Q1 400 • Up 1% y/y at constant FX 350 • Sales growth for Modern Studios 300 • Lower y/y sales for Radio operations & Bet24 250• Combined OPEX up 11% y/y to SEK 421 (380) 200 mn in Q1 • Investments in Modern Studios & 150 Norwegian radio operations 100• Combined EBIT losses of SEK -14 (20) mn in Q1 50• Agreement signed with Unibet to sell Bet24 20 -14 operations 0 • Total cash consideration of approximately -50 Q1 2011 Q1 2012 EUR 13.5 mn Revenue EBIT • Subject to regulatory approval & expected Operating review completion before end of Q2 201213
  • 14. 14Financial Review
  • 15. Income Statement• Depreciation & amortisation charges Q1 Q1 of SEK 28 (49) in Q1 (SEK mn) 2012 2011 Net sales 3,259 3,125• Net interest charges up y/y to EBIT before associated company 341 432 SEK -16 (-14) mn in Q1 income Associated company income 201 254• Y/Y change in other financial items EBIT 542 686 in included Net interest & other financial items 49 -15 • SEK 81 (4) mn of non-cash financial gain from the change Income before tax 591 671 in value of the option element of the SEK 250 mn CDON Net income 454 490 Group convertible bond Basic EPS from continuing operations 6.68 7.35 Total basic EPS 6.66 7.29 Financial Review15
  • 16. Cash Flow• Cash flow from operations included Q1 Q1 (SEK mn) 2012 2011 receipt of SEK 52 (61) mn of dividend payments from CTC Media in Q1 Cash flow from operations 334 462• Sale of MTG’s remaining shares in Metro Changes in working capital -269 -339 International S.A. to Investment AB Kinnevik in Q1 for SEK 24 mn in cash Net cash flow from operations 65 123• CAPEX of SEK 23 (32) mn in Q1 Cash flow used in investing = less than 1% of Group net sales 1 -32 activities Cash flow used in financing 54 -189 activities Net change in cash & cash 120 -98 equivalents Financial Review16
  • 17. Financial Position • Group total borrowing of SEK 1,603 (2,446) mn 31 Mar 31 Mar as at 31 Mar 2012, compared to SEK 1,566 mn (SEK mn) 2012 2011 as at 31 Dec 11 Non-current assets 5,683 8,566 • Net debt of SEK 733 (1,863) mn as at 31 Mar Current assets 5,785 5,339 12, compared to SEK 797 mn as at 31 Dec 11 Total assets 11,468 13,905 • SEK 1,869 (1,766) mn book value of 38.1% shareholding in CTC Media had public equity value of SEK 4,619 mn as at 31 Mar 12 Shareholders’ equity 4,744 6,538 Long-term liabilities 2,220 3,054 Net debt / EBITDA1.2 1.2 1.1 Current liabilities 4,504 4,313 0.8 0.7 0.7 0.6 0.3 0.3 Total equity & liabilities 11,468 13,905 Financial Review 17
  • 18. Summary• Record sales for a first quarter but lower profits due to peak cost increases in an investment quarter for the Nordic operations• Earlier and higher investments in Scandinavian free-TV Schedules & investments in pay-TV content offering & new technologies• Audience share gains in all but one Emerging free-TV territory & continued subscriber intake for Emerging Markets pay-TV businesses• Sales growth & improved profitability for both Free-TV and Pay-TV Emerging Markets• Focus on growth & sustainable long term value creation• Strong balance sheet with increased dividend proposed to AGM & newly adopted dividend policy Summary18
  • 19. For further information, please visit www.mtg.se or contact: MTG Investor Relations Tel: +44 7768 440 414 / +44 7590 098 188 Email: investor.relations@mtg.se Contact information19