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  • 1. Modern Times GroupMTGFourth Quarter & FY 2012Financial Results CHAPTER NAME 1
  • 2. Forward looking statementsForward-looking information and Safe Harbour Statement under the U.S. Private Securities LitigationReform Act of 1995This report contains forward-looking information based on the current expectation of MTG management.Although management deems that the expectations presented by such forward-looking information arereasonable, such forward-looking information is subject to risks and uncertainties and no guarantee can begiven that these expectations will prove correct. Accordingly, the actual future outcome could vary considerablywhen compared to what is stated in the forward-looking information, due to such factors as described above inthe Risks & Uncertainties section. 2
  • 3. 3
  • 4. Q4 2012 • Sales stable y-o-y at constant FX SEK mn • Sales up 4% y-o-y at constant FX when excluding 4,000 40% discontinued or sold operations 3,711 3,620 • OPEX up y-o-y at constant FX 3,500 35% • Following investments in the Nordic and Emerging 3,000 30% Markets pay-TV businesses, and up even more when excluding discontinued or sold operations 2,500 25% • EBIT before associated company income of SEK 514 (551) mn 2,000 20% • Total EBIT of SEK 476 (-2,515) mn including 1,500 15% SEK -38 (116) mn of associated company income & SEK -3,182 mn of non-recurring items in 2011 1,000 10% • PTP of SEK 467 (-2,519) mn 551 514 500 5% • Including SEK -7 (43) mn negative non-cash impact of change in value of option element of CDON 0 0% convertible bond Q4 2011 Q4 2012 • Net income of SEK 378 (-2,564) mn & basic EPS of SEK Revenue EBIT* EBIT margin 5.25 (-38.87) * EBIT excluding associated income • Key executive management changes to strengthen team • Cash flow from operations up 12% y-o-y to SEK 583 (519) mn4 • Net debt down to SEK 1 mn from SEK 634 mn in Q3
  • 5. FY 2012• Sales up 1% y-o-y at constant FX SEK mn • Up 3% y-o-y at constant FX when excluding 16,000 40% discontinued or sold operations• OPEX up y-o-y at constant FX 14,000 13,473 13,336 35% • Up even more when excluding discontinued or sold 12,000 30% operations during 2012• EBIT before associated company income of 10,000 25% SEK 1,695 (1,933) mn 8,000 20% • Total EBIT of SEK 2,124 (-615) mn, including SEK 429 (634) of associated company income & 6,000 15% non-recurring items of SEK -3,182 mn• PTP of SEK 2,034 (-727) mn 4,000 10% 1,933 1,695 • Including SEK -15 (14) negative non-cash impact of 2,000 5% change in value of option element of CDON convertible bond 0 0% FY 2011 FY 2012• Net income of SEK 1,594 (-1,289) mn & basic EPS of SEK 22.93 (-19.98) Revenue EBIT* EBIT margin• Received SEK 208 (319) mn of dividends from CTC Media * EBIT excluding associated income• Cash flow from operations of SEK 1,655 (1,853) mn• Board of Directors to propose 11% increase in annual ordinary dividend to SEK 10.00 (9.00) to AGM in May 2013 5
  • 6. Forward ExpectationsAs previously announced, the Group continues to expect its Nordic pay-TV business togrow its revenues at constant exchange rates in 2013, and to report an operating (EBIT)margin of approximately 10-12% for the full year 2013. The segment margin is expectedto increase in 2014.The Group also continues to expect the previously announced investments in itsEmerging Market pay-TV operations to result in lower profitability levels in 2013 andexpects rising profitability levels in 2014. However, when combining the Group’sdecision to reduce its investments in its Ukrainian pre-paid satellite service, as thepackage and pricing structures are reviewed in the context of a highly competitivemarket environment, with higher ingoing mini-pay subscription balances at thebeginning of the year, the segment is expected to achieve a breakeven EBIT result forthe full year 2013. This compares with the Group’s previous expectations for thesegment to report an operating (EBIT) loss of less than SEK 50 million for the full year2013.6
  • 7. 7
  • 8. Free-TV Scandinavia Financial Highlights SEK mn 1,400 50%• Sales down 6% y-o-y at constant FX in Q4 & down 1,240 1,147 45% 4% in 2012 1,200 40% • Decline in Danish TV advertising market 1,000 35% 800 30% • Lower audience shares and high sold out 25% ratios for the Group’s combined channels in 600 20% each country 400 282 15% • Norwegian & Swedish TV ad markets 250 10% expected to have grown in Q4 200 5% 0 0% Q4 2011 Q4 2012• OPEX down 6% y-o-y in Q4 & up 1% for FY SEK mn Revenue EBIT EBIT margin • OPEX was down slightly less y-o-y in the 5,000 50% quarter at constant FX, but up more y-o-y for 4,393 4,500 4,157 45% FY at constant FX 4,000 40% • The underlying y-o-y development in the 3,500 35% quarter followed the deferral of certain 3,000 30% programming investments into 2013 2,500 25% 2,000 20% 1,500 1,077 15%• EBIT margin of 21.8% (22.7%) in Q4 & 1,000 793 10% 19.1% (24.5%) for FY 500 5% 0 0% 8 FY 2011 FY 2012
  • 9. Free-TV Scandinavia Operating Highlights Sweden Commercial Audience Share (15-49) • Higher y-o-y ratings for the TV8 and TV10 channels but lower viewing shares for TV6 and for TV3 50% • TV3’s prime time target audience share was up y-o-y in 45% Q4 following scheduling improvements 40% 35% Denmark • Lower ratings for the TV3 and TV3+ channels, but 30% higher ratings for TV3 PULS • Both TV3+ and TV3 PULS reported higher y-o-y 25% prime time ratings in Q4 20% 15% Norway • Lower ratings for both TV3 and Viasat4 following 10% weaker than anticipated performance of a number of certain local productions • Combined CSOV up y-o-y in December & in prime-time Sweden Norway Denmark9
  • 10. Free-TV Scandinavia Operating highlights Sweden • Prime-time CSOV up y-o-y in Q4 as a result of strenghtened schedules • Spring schedules have been launched & feature both successful formats from 2012 and new acquired & locally produced content • Up-front negotiations on-going & gross rate card prices are up • New distribution agreements signed with Telenor for TV10 to be included in basic package in Bredbandsbolaget IPTV and Canal Digital Cable from mid-year 2013 – to drive channel penetration from approximately 73% in Q4 2012 to approximately 77% later in 2013 Denmark • TV 3 ratings up in key prime-time slots in Q4 • Recent channel distribution agreements with Boxer and Canal Digital Satellite to push penetration of TV3 to 79% in Feb and TV3 PULS to 57% in July, from 67% and 46% respectively today & to drive audience and market shares • TV3 available on Boxer DTT platform from January 2013 & TV3 PULS to be available from July • Sales cooperation to sell advertising airtime on Viacom’s MTV and VH1 channels as part of MTG media house Norway • Launch of TV3 HD & Viasat4 HD in Canal Digital’s cable TV offering • Signed agreement with Canal Digital to make a third, yet to be launched, free-TV channel available to Canal Digital’s large installed cable TV customer base later in the year – enables implementation of multi-channel media strategy in Norway10
  • 11. Pay-TV NordicFinancial Highlights SEK mn• Sales up 2% y-o-y in Q4 & up 4% for FY 1,400 50% 1,221 1,244 45% • Up 3% y-o-y at constant FX in Q4 & up 5% 1,200 for FY 40% 1,000 35% • Positive FX movements, higher HD and Viaplay subscriber intake & one-off pay-per- 800 30% view revenues from boxing title fight in 25% Denmark 600 20%• OPEX up 7% y-o-y for both periods 400 15% 246 198 10% • Up more at constant FX for both periods 200 5% • Investments in premium movie and sports 0 0% content and Viaplay platform, as well as Q4 2011 Q4 2012 SEK mn Viasat Film rebranding & launch of Revenue EBIT EBIT margin 6,000 50% additional HD and catch-up channels 4,925 45%• EBIT margin of 15.9% (20.1%) in Q4 & 16.9% 5,000 4,730 40% (19.5%) for FY 35% 4,000• As previously announced, the Group continues to 30% expect its Nordic pay-TV business to grow its 3,000 25% revenues at constant exchange rates in 2013, and 20% to report an operating (EBIT) margin of 2,000 15% approximately 10-12% for the full year 2013. The 923 834 10% segment margin is expected to increase in 2014 1,000 5%11 0 0% FY 2011 FY 2012
  • 12. Pay-TV Nordic Operating Highlights Premium subscribers 1,200 • Overall subscriber base up when including Viaplay 1,000 • New Viaplay apps launched on Apple iOS & 800 Thousands Android platforms, & Viaplay now available on 600 Microsoft Xbox 360 & Sony PlayStation3 400 • Overall premium subscriber base, when excluding the undisclosed and growing Viaplay 200 online subscriber base, was lower q-o-q 0 and y-o-y as anticipated • 3’rd party subscriber base up both q-o-q and y-o-y & added 7,000 net new Satellite subscribers 3rd party network subscribers subscribers in the quarter, but did not fully compensate for the decline in the satellite Value added services subscriber base 400 350 • Strengthened Danish offering by signing a 300 Thousands number of channel distribution agreements to 250 carry all free-TV channels on the Danish platform 200 & C More Entertainment channels 150 100 • Premium satellite ARPU up 4% y-o-y in Q4 and 50 up 1% q-o-q 0 • Positive y-o-y and q-o-q development due to price increases and ongoing HD12 subscriber intake ViasatPlus HDTV Multi-room
  • 13. Content Leadership TV & Movies…1’stPay International titles Local titles2’ndPay
  • 14. Content Leadership…And Premium Sports * ** * In Sweden & Denmark ** In Denmark & Norway
  • 15. Free-TV Emerging Markets Financial Highlights • Total sales up 8% y-o-y in Q4 & 3% for FY at constant SEK mn Free-TV Emerging Markets FX 2,500 • Continued sales growth and increased 2,073 2,035 advertising market shares in almost all operating 2,000 territories 1,500 • OPEX down y-o-y in Q4 but up at constant FX & down for FY at both reported & constant FX 1,000 675 655 • Improved operating profit y-o-y for both periods & substantially increased operating margins of 15.4% for 500 104 156 Q4 and 7.7% for FY 67 32 0 Q4 2011 Q4 2012 FY 2011 FY 2012 Revenue EBIT • Baltics, Czech & Bulgarian sales up 7% y-o-y in Q4 & up 2% for FY SEK mn Baltics, Czech Republic & Bulgaria 2,000 1,845 1,874 • Up 12% in Q4 & up 7% for FY at constant FX 1,800 • Combined OPEX up 2% y-o-y in Q4 & down 2% for FY 1,600 & up at constant FX 1,400 1,200 • Consolidation of the LNT operations and 1,000 investments in the Czech Republic 800 591 630 600 • EBIT up 35% y-o-y in Q4 & up 50% for FY, with 400 186 increased EBIT margins of 16.9% (13.4%) and 9.9% 200 79 106 124 (6,7%) for FY 0 Q4 2011 Q4 2012 FY 2011 FY 201215 Revenue EBIT
  • 16. Free-TV Emerging Markets Operating Highlights Baltics Commercial Audience Share 70% • Sales up 39% y-o-y in Q4 at constant FX and up 16% for the year 60% • Consolidation of LNT in Latvia & higher sales in Lithuania, with stable y-o-y sales 50% in Estonia 40% • Pan-Baltic commercial target audience share of 48.5% (42.6%) 30% Czech Republic 20% • Sales up 4% y-o-y in Q4 at constant FX and up 5% for the year 10% • CSOV up y-o-y following higher ratings for Prima Cool and Prima Love • Launch of Prima Zoom Estonia (15-49) Latvia (15-49)* • Launch of sales cooperation with Barrandov Lithuania (15-49) Czech Republic (15-54) Bulgaria Bulgaria (18-49) • Sales up 5% y-o-y in Q4 at constant FX and up 1% for FY • Combined CSOV up significantly both y-o-y & q-o-q * MTG has included the LNT channels in its reported combined CSOV in following increased investments in successful locally Latvia with effect from Q3 2012 produced programming • Launch of sales cooperation to sell TV ad air time on a16 number of channels
  • 17. Pay-TV Emerging Markets Financial Highlights • Sales up 14% y-o-y in Q4 & 15% for FY SEK mn • Up 19% y-o-y at constant FX both in the quarter & 300 50% 271 up15% for FY 45% OPEX up 15% y-o-y in Q4 & up 5% for FY 250 237 40% • Lower than anticipated y-o-y increase in segment 35% 200 OPEX in Q4 primarily reflected general & 30% administrative cost savings and renegotiation of content rights, which to some extent offset the 150 25% previously announced investments in Russian & 20% Ukrainian pay-TV content, HD channels & pre-paid 100 15% satellite service in Ukraine 10% • EBIT of SEK 5 (7) y-o-y in the quarter, and SEK 144 (49) for 50 5% FY & EBIT margin of 1.9% (2.8%) in Q4 & 13.6% (5.3%) for 7 5 FY 0 0% Q4 2011 Q4 2012 • The Group also continues to expect the previously SEK mn Revenue EBIT EBIT margin announced investments in its Emerging Market pay-TV 1,200 50% operations to result in lower profitability levels in 2013 and 1,062 45% expects rising profitability levels in 2014. However, when 1,000 922 40% combining the Group’s decision to reduce its investments in its Ukrainian pre-paid satellite service, as the package and 35% 800 pricing structures are reviewed in the context of a highly 30% competitive market environment, with higher ingoing mini- 600 25% pay subscription balances at the beginning of the year, the segment is expected to achieve a breakeven EBIT result for 20% 400 the full year 2013. This compares with the Group’s previous 15% expectations for the segment to report an operating (EBIT) 10% 200 144 loss of less than SEK 50 million for the full year 2013 5% 4917 0 0% FY 2011 FY 2012
  • 18. Pay-TV Emerging Markets Operating Highlights Satellite subscribers 600• 52,000 net new subscribers added y-o-y & 41,000 q-o-q, following seasonally high subscriber Thousands intake on the Russian and Ukrainian satellite platforms 500• Wholesale channel business added over 19 mn subscriptions y-o-y & over 8 million subscriptions q-o-q 400 • Particularly high growth in the Russian base• The Group has been selling a premium package of Satellite subscribers five HD channels (including its three newly launched HD movie channels) in Russia, Ukraine and the CIS Mini-pay TV subscriptions 90,000 since the beginning of December & 2 major Russian cable TV networks have already signed contracts to 80,000 Thousands distribute the new HD channel package 70,000 60,000 50,000 40,000 18 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012
  • 19. Russia & Ukraine Set for continued growth Russia – Pay-TV Satellite Ukraine – Pay-TV SatelliteMillions Thousands Households1 Households1 16 1,200 14 1,000 12 10 800 8 600 6 400 4 2 200 0 0 Russia - Cable & IPTV Households2 Ukraine - Cable & IPTV Households2Millions Thousands 30 5,000 25 4,000 20 3,000 15 10 2,000 5 1,000 0 019 Source: Screen Digest 2013 data; 1: Including low-ARPU satellite lik e Tricolor; in Russia 2: Including social cable
  • 20. Wholesale Channel Business Evolution with channel package • Channels available in Russia, Ukraine & CIS • Approximately 1.3 million potential HD enabled households potentially addressable • Rapid expansion of HD expected • Already signed deals with two major Russian networks Exclusive Premium Content from major Hollywood Studios20
  • 21. Other Businesses Highlights• Comprises MTG’s Radio operations in Norway & SEK mn Sweden and MTG Studios content production 500 businesses 450 450 400• Sales down 2% y-o-y in the quarter & up 1% for FY at 350 316 constant FX when excluding the contribution of the 300 Bet24 operations 250 200 150• The y-o-y development in the quarter reflected a 100 decline in Swedish radio advertising sales as the 32 Group’s operation of 20 NRJ licenses in Sweden 50 0 came to an end 0 Q4 2011 Q4 2012 SEK mn Revenue EBIT 1,800 1,674• Profits substantially down y-o-y in Q4 and for FY 1,600 1,418 • The y-o-y development in the quarter reflected 1,400 increased production costs for the MTG 1,200 Studios operations, which were offset to an 1,000 extent by the lower costs for the Radio 800 600• Paprika Latino consolidated from 17 September 2012 400 200 114 6 0 21 FY 2011 FY 2012
  • 22. 22
  • 23. Income Statement• Depreciation & amortisation charges of SEK 57 (38) mn in Q4 & 147 (183) for the Q4 Q4 FY FY (SEK mn) 2012 2011 2012 2011 year Net sales 3,620 3,711 13,336 13,473• Net interest charges down y-o-y to SEK 0 (-15) mn in Q4 & SEK -34 (-59) mn EBIT before associated for FY 514 551 1,695 1,933 company income• Y-o-y change in other financial items Associated company income -38 116 429 634 included SEK -7 (43) mn non-cash financial impact in Q4 & SEK -15 (14) mn for the year Non-recurring items - -3,182 - -3,182 from the change in value of the option element of the SEK 250 mn CDON Group EBIT 476 -2,515 2,124 -615 convertible bond between the balance sheet dates Net interest & other financial -8 -4 -90 -112 items• Effective tax rate of 19% in Q4 & 23% Income before tax 467 -2,519 2,034 -727 for the year Tax -89 -46 -440 -561 • Revaluation of deferred tax liabilities in Sweden due to change in Net income 378 -2,564 1,594 -1,289 corporate tax from 1 Jan 2013 Basic EPS 5.25 -38.87 22.93 -19.98 • Positive effects from prior years Diluted EPS 5.24 -38.88 22.87 -20.0123
  • 24. Cash Flow• Cash flow from operations included receipt of SEK included the receipt of SEK 51 (90) million and SEK 208 (319) million of dividend payments from Q4 Q4 FY FY CTC Media for the respective periods (SEK mn) 2012 2011 2012 2011 Cash flow from 583 519 1,655 1,853 operations• Investment in shares amounted to SEK 41 (-) in Q4 & SEK 315 (-) mn for the year & comprised the Changes in working acquisition of Paprika Latino content production 238 588 261 -56 capital business, the LNT free-TV business in Latvia & communications operator Zitius Net cash flow from 821 1,107 1,915 1,797 operations• CAPEX equivalent to 1% of Group net sales for Cash flow used in -115 -29 -351 -115 the FY investing activities Cash flow used in -411 -966 -1,274 -1,737 financing activities• Cash flow from investing activities of SEK -115 (-29) mn in Q4 & SEK -351 (-115) mn for the year Net change in cash & cash 294 112 291 -55 equivalents24
  • 25. Financial Position • Total borrowings of SEK 953 (1,566) mn as at 31 Dec 31 Dec 31 Dec 2012 & cash & cash equivalents of (SEK mn) 2012 2011 SEK 748 (470) mn Non-current assets 6,098 5,612 • Net debt of SEK 1 (797) mn as at 31 Dec 2012 Current assets 5,595 5,668 & available liquid funds of SEK 6,448 (5,528) mn 11,692 11,281 Total assets • SEK 1,903 (1,878) mn book value of 37.9% shareholding in CTC media & public equity Shareholders’ equity 5,134 4,350 market value of 3,035 mn as at the last business day of 2012 1,751 2,168 Long-term liabilities Current liabilities 4,808 4,763 Net debt / EBITDA ratio Total equity & liabilities 11,692 11,281 1.2 1.2 1.1 0.8 0.7 0.7 0.6 0.3 0.3 0.3 0.3 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q425 10 10 10 10 11 11 11 11 12 12 12 12
  • 26. 26CHAPTER NAME
  • 27. Summary• Emerging Markets operations on track & performing strongly with audience & market share gains• Positive revisions to forward expectations for Emerging Markets pay-TV business• Viaplay online pay-TV service continues to grow strongly• Focused on challenges in Scandinavian free-TV to re-take audience & market shares• Strengthened the executive management team• Continued strong cash generation enables strong financial position of almost zero net debt at year end• Proposing increased ordinary dividend of SEK 10.00 krona to AGM in May 2013• Reviewing both organic investment projects & acquisition opportunities in both existing & new markets27
  • 28. 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.se28