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Q2 2013 presentation
 

Q2 2013 presentation

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    Q2 2013 presentation Q2 2013 presentation Presentation Transcript

    • 11 MODERN TIMES GROUP Q2 2013 FINANCIAL RESULTS INVESTMENTS ON TRACK & ACCELERATED GROWTH
    • 2 FORWARD LOOKING STATEMENTS Forward-looking information and Safe Harbour Statement under the U.S. Private Securities Litigation Reform Act of 1995 This report contains forward-looking information based on the current expectations of MTG management. Although management deems that the expectations presented by such forward-looking information are reasonable, such forward-looking information is subject to risks and uncertainties and no guarantee can be given that these expectations will prove correct. Accordingly, the actual future outcome could vary considerably when compared to what is stated in the forward-looking information, due to such factors as described above in the Risks & Uncertainties section.
    •  Accelerated sales growth – up 6% (y-o-y) at constant exchange rates  Investments on track – our portfolio of content offerings for consumers is stronger than ever  Important strategic partnerships signed with leading third party distributors  Free-TV Emerging Markets delivered a quarter of exceptional growth  Free-TV Scandinavia - audience share gains in all 3 markets - we will continue to invest into this momentum  Pay-TV Nordic operators – accelerated sales growth and profitability in line with expectations  Pay-TV Emerging Markets delivered healthy sales growth and outperform profitability expectations  Studios M&A deals + launch of MTGx to accelerate pace of digital innovation and expansion Q2 2013 – HIGHLIGHTS POSITIVE MOMENTUM 3
    • 4 FREE-TV SCANDINAVIA AUDIENCE SHARE GAINS IN ALL 3 MARKETS Stable sales y-o-y at constant FX  Best y-o-y sales development since Q4 2011  Expected decline in the Danish TV ad market while Norway is expected to have grown. The Swedish TV ad market is estimated to have been at around the same level as in Q2 2012  Expect to gradually regain advertising market shares but there is a lag between rating and ad shares CSOV – significant gains in all thee markets  Danish media house achieved its highest CSOV level since Q2 2001  3rd channel to be launched in Norway in H2 EBIT margin of 19.3%  OPEX up 4% y-o-y at constant FX  FY OPEX growth expected to be at the higher end of the mid-single digit percentage point range 29% of Group sales 2012 2013 Apr-Jun Apr-Jun Sales (SEKm) 1,110 1,080 Growth (constant currency) -3% 0% EBIT (SEKm) 251 209 EBIT margin 22.6% 19.3% CSOV (15-49) Sweden 31.3% 32.7% Denmark 23.9% 26.2% Norway 18.1% 19.5%
    • 5 PAY-TV NORDIC ACCELERATED GROWTH Sales up 7% y-o-y at constant FX  Driven by contribution from TV3 Sport channels, Viaplay (volume + price increases) and rise in satellite premium ARPU Overall subscriber base (incl. Viaplay) up but premium satellite subscribers down as anticipated  3rd party network subscribers still expected to increase on FY basis EBIT margin of 11.3%  In line with expectations & ongoing investments in premium movie, sports content and Viaplay Retain previous guidance  Revenue growth at constant exchange rates & operating (EBIT) margin of 10-12% for FY13, with a higher margin in 2014 36% of Group sales 2012 2013 Apr-Jun Apr-Jun Sales (SEKm) 1,292 1,349 Growth (constant currency) 5% 7% EBIT (SEKm) 228 152 EBIT margin 17.7% 11.3% Premium subs ('000) 1,031 989 o/w satellite ('000) 612 569 o/w third party ('000) 419 421 Satellite ARPU (SEK) 4,926 4,978
    • Sales up 31% y-o-y at constant FX  Driven by high underlying growth & sales cooperations  Exceptional growth in the Czech Republic (47% at constant FX) - the largest media house by ad market share for the 2nd quarter in a row  Ghana reported its first quarterly profit ahead of launch in Tanzania Significantly higher CSOV in Baltic & Bulgarian markets  TV3 Estonia was the most watched channel in its target group for the first time since Q2 2008  Positive momentum in Bulgaria and new formats to be launched in Czech Republic EBIT margin of 20.2%  Improved profitability y-o-y for the 7th consecutive quarter  OPEX up significantly and expect similar level of opex growth in H2 6 FREE-TV EMERGING MARKETS EXCEPTIONAL PERFORMANCE 19% of Group sales 2012 2013 Apr-Jun Apr-Jun Sales (SEKm) 560 692 Growth (constant currency) -3% 31% EBIT (SEKm) 91 140 EBIT margin 16.3% 20.2% CSOV Pan-Baltic (15-49) 40.5% 47.9% Czech Republic (15-54) 39.1% 35.9% Bulgaria (18-49) 25.7% 32.5%
    • Sales up 9% y-o-y at constant FX Continued mini-pay subscription growth  Added over 17m mini-pay subscriptions (y-o-y)  Added 28k satellite subscribers (y-o-y) EBIT of SEK 52 (58) mn  Significant improvement compared to Q1 & expectations  Approximately half of the Q2 EBIT due to the positive one-off, timing and currency related items EBIT exceeds previous expectations  FY13 EBIT to exceed previous expectation for breakeven result. Continuing to invest as previously indicated & no change to expectation for rising profitability levels in 2014 7 PAY-TV EMERGING MARKETS CONTINUED GROWTH AND INVESTMENTS 8% of Group sales 2012 2013 Apr-Jun Apr-Jun Sales (SEKm) 273 283 Growth (constant currency) 12% 9% EBIT (SEKm) 58 52 EBIT margin 21.1% 18.3% Subscribers / subscriptions ('000) Satellite 534 562 Mini-pay wholesale 72,816 89,915
    • Sales down 15% y-o-y at constant FX  BUT up 9% y-o-y when excluding Bet24 but including Paprika Latino, DRG and Novemberfilm  Higher MTG Studios & Norwegian radio sales more than offset substantial decline in Swedish radio sales EBIT of SEK 3 (5) mn Two acquisitions made in Q2 + launch of MTGx  DRG - leading UK-based content distribution company  Novemberfilm – Norwegian production company  MTGx - digital innovation and acceleration platform  MTGx expected to add up to SEK 50 mn of operating costs in H2 8 OTHER BUSINESSES ADDING NEW DIMENSIONS 9% of Group sales 2012 2013 Apr-Jun Apr-Jun Sales (SEKm) 397 336 Growth (constant currency) -13% -15% Growth exc. Bet24 (constant currency) -6% 9% EBIT (SEKm) 5 3 EBIT margin (excl. associates) 1.2% 0.4%
    • 9 INCOME STATEMENT HEALTHY GROWTH & ONGOING INVESTMENTS Sales up 6% y-o-y at constant exchange rates and 7% on an organic basis  Negative FX impact of ~ 3 percentage points  Divestments impacting sales by ~ 3 percentage points  Acquisitions adding ~ 2 percentage points EBIT margin (excl. associates) of 12.8%  OpEx up 9% at constant FX  Significant investments in Nordic & Emerging Markets pay-TV businesses to drive future growth Effective tax rate of 29%  Continue to expect FY13 rate to be in 25-30% range Q2 in brief 2012 2013 Apr-Jun Apr-Jun Sales (SEKm) 3,517 3,619 Organic growth (constant currency) 1% 7% EBIT excl. associates 552 464 EBIT margin excl. associates 15.7% 12.8% Total EBIT 684 578 Total EBIT margin 19.5% 16.0%
    • 10 CASH FLOW 80% CASH CONVERSION Asset light model – high cash conversion  80% cash conversion (pre changes in WC) for wholly owned operations Dividend stream from CTC Media  SEK 64 (55) mn in Q2 & SEK 123 (107) mn in H1 Acquisition of DRG and Novemberfilm  Investments of SEK 155 (100) mn in Q2  Capex of SEK 72 (20) mn in Q2 = <2% of sales Working capital under strict control but will increase (SEK mn) 2012 2013 Apr-Jun Apr-Jun Cash flow from operations 501 471 Changes in working capital 227 208 Net cash flow from operations 728 678 Cash flow used in investing activities -58 -227 Cash flow used in financing activities -582 -358 Net change in cash & cash equivalents 88 93
    • FINANCIAL POSITION FIREPOWER & FLEXIBILITY Net debt of SEK 206 mn  Paid out SEK 666 mn in May - highest ever annual cash dividend  Available liquid funds of SEK 6 bn SEK 2.1 bn book value of 37.9% CTC Media stake  Public equity market value of SEK 4.5 bn Continuing to balance investment in future growth & shareholder returns 11 1,2 1,2 1,1 0,8 0,7 0,6 0,7 0,3 0,3 0,3 0,3 0,0 0,0 0,1 Q110 Q210 Q310 Q410 Q111 Q211 Q311 Q411 Q112 Q212 Q312 Q412 Q113 Q213 Net debt / Trailing 12 month EBITDA
    • Q2 2013 SUMMARY POSITIVE MOMENTUM  Accelerated sales growth – up 6% (y-o-y) at constant exchange rates  Investments on track – our portfolio of content offerings for consumers is stronger than ever  Important strategic partnerships signed with leading third party distributors  Free-TV Emerging Markets delivered a quarter of exceptional growth  Free-TV Scandinavia - audience share gains in all 3 markets - we will continue to invest into this momentum  Pay-TV Nordic operators – accelerated sales growth and profitability in line with expectations  Pay-TV Emerging Markets delivered healthy sales growth and outperform profitability expectations  Studios M&A deals + launch of MTGx to accelerate pace of digital innovation and expansion 12
    • 1313 MTG INVESTOR RELATIONS FOR FURTHER INFORMATION, PLEASE VISIT WWW.MTG.SE OR CONTACT: TEL: +46 (0) 73 699 2714 EMAIL: INVESTOR.RELATIONS@MTG.SE