7. anders nilsson building the media house - for print

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7. anders nilsson building the media house - for print

  1. 1. AndersNilssonEVP of CentralEuropeanBroadcastingBorn 1967Joined MTG in 1992What I love: ChallengesWhat I hate: DisloyaltyFavourite quote: “Early to bed, early to rise,work like hell and advertise.”
  2. 2. Our story started long agoLaunch of Acquisition Acquisition Catch-Up AcquisitionBaltic of 50% of of 100% of services of 100% ofFree-TV Prima TV in Nova TV in launched LNT inoperations Czech Bulgaria across CEE Latvia Republic1997 2000 2001 2003 2005 2006 2007 2008 2009 2010 2011 2012 …21 channels in 6 Emerging Markets!Acquisition Acquisition Launch of Launch of Launch ofof 95% of of 50% of Prima Cool Prima LOVE Prima PlayHungarian BMGL in in Czech in Czech in Czechoperation Bulgaria Republic Republic Republic3
  3. 3. It is a great time to be in CEE with a contrarian strategy Invest precisely when others don’t/can’t Focus on long term value creation 2001 2002... 2005 2006 2007 2008 2009 2010 2011 DTV Initial investment of SEK 7 million Accumulated losses of SEK 302.5 million Sold for SEK 2,800 million in 2008 Return on investment of 804.68% CTC Media Investment in shares of SEK 672 million Accumulated dividends of SEK 586.9 million Current equity market value of SEK 4,618 million Return on investment of 674.54%4 Sources: MTG/Viasat statistics
  4. 4. With a fantastic long-term growth story GDP growth in MTG EM territories 200 180 160 140 Estonia 120 Latvia 100 Lithuania Bulgaria 80 Czech Hungary 60 40 20 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 20115 Sources: IMF, TNS/MTG estimates
  5. 5. With a fantastic long-term growth story Compared to Western Europe 200 180 160 140 Estonia 120 Latvia Lithuania 100 Bulgaria Czech 80 Hungary 60 Western Europe 40 20 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 20116 Sources: IMF, TNS/MTG estimates
  6. 6. With even better trends for the TV ad market TV ad market growth in MTG EM territories 500 450 400 350 Estonia 300 Latvia 250 Lithuania Bulgaria 200 Czech Republic Hungary 150 100 50 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 20117 Sources: Zenith Optimedia 2012
  7. 7. With even better trends for the TV ad market Compared to western Europe 500 450 400 350 Estonia 300 Latvia Lithuania 250 Bulgaria Czech Republic 200 Hungary Western Europe 150 100 50 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 20118 Sources: Zenith Optimedia 2012
  8. 8. And our sales growing faster than the market Growth in MTG EM territories 600 500 400 GDP 300 TV Ad Market MTG Sales 200 100 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 20119 Sources: Zenith Optimedia 2012
  9. 9. After all, TV is the reach media TV Share of AD Market (2011) TV Share of AD Market 70% 50% 45% 60% 40% 50% 35% 40% 30% 25% 30% 20% 20% 15% 10% 10% 5% 0% 0% CEE Western Europe10 Sources: Zenith Optimedia 2012
  10. 10. With people watching more TV Minutes per day (2011) Minutes per day 350 250 300 200 250 200 150 150 100 100 50 50 0 0 Western Europe MTG CEE11 Sources: Zenith Optimedia 2012
  11. 11. Supported by the fact that product pricing is equivalent 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 Percentage Vodka 8.91 Difference: Shower Gel 2.75 Shower Gel 1.39 Detergent 2.8 -6.4% Detergent 8.46 Powder 15.59 Powder 11.89 81.97 BGN = 41.9 EUR 44.6 EUR In Bulgaria In Germany12 Sources: METRO Cash&Carry monthly catalogues
  12. 12. But there is still a way to go TV Ad spend per capita (SEK’000, 2011) 2 1.8 1.6 1.4 1.2 1 0.8 0.6 0.4 0.2 013 Sources: IMF, Zenith Optimedia 2012
  13. 13. But there is still a way to go CPT dynamics (2011)14 Sources: MTG/Viasat statistics
  14. 14. With a consistent advertiser profile TOP 5 Advertising International / Agencies / direct (%) Annual / ad hoc (%) Segments domestic clients (%) Mobile operatorsScandinavia Retail Food 25/75 95/5 70/30 Beverages Pharmaceuticals Mobile operatorsBaltics Retail Food 70/30 90/10 75/25 Beverages Financial services Mobile operatorsBulgaria Retail Food 50/50 92/8 85/15 Beverages Pharmaceuticals Mobile operatorsCzech RetailRepublic FMCG 96/4 99/1 99/1 Consumer goods Financial services PharmaceuticalsHungary Food Cosmetics 90/10 98/2 92/8 Service Telecommunication15 Sources: MTG/Viasat statistics
  15. 15. And a new digital world full of opportunity Czech Hungary BulgariaEstonia Republic (Estimated) (Undecided) 2009 2010 2011 2012 2014 ? Latvia Lithuania Czech Republic Czech Republic (A15+, 2007) (A15+, 2012) 18% Prima 32% 26% Prima 41% Nova Nova CT 31% Others CT 15% 27% Others 10%16 Sources: MTG/Viasat statistics
  16. 16. And a growing mini-pay opportunity14 Number of channels Mini-Pay Revenues (2011)12 13% Lithuania10 Estonia Latvia 8 Hungary Bulgaria 6 4 87% 2 0 Mini-Pay Revenues Ad Revenues 2008 2009 2010 2011 Bulgaria 3 Bulgaria 3 Bulgaria 3 Bulgaria 3 Hungary 2 Hungary 2 Hungary 2 Hungary 2 Latvia 2 Latvia 2 Estonia 2 Estonia 2 Lithuania 3
  17. 17. With new incremental revenue streams Czech Republic Lithuania Hungary Bulgaria Latvia Estonia Video views 000 Ad impressions 00018 Sources:TNS/MTG estimates
  18. 18. All driven by strong local schedules Lithuania: Latvia: Estonia: Women lie better No Tabu Revenge office Bulgaria: Czech Republic: Hungary: X-Factor Les Yeux Sans Frontiers Paradise Hotel19
  19. 19. And the opportunity is clear GDP growth in MTG EM territories Forecast GDP growth in MTG CEE (indexed) territories600 5% 5%500 4% 4%400 3%300 3% 2%200 2% 1%100 1% 0 0% GDP TV Ad Market MTG Sales Estonia Latvia Lithuania Bulgaria Czech Hungary TV Ad market has outperformed Nominal GDP development by a factor of 1.28 20 Sources: IMF, TNS/MTG estimates
  20. 20. And we are well placed to benefit MTG Free-TV EM Sales Growth MTG Free-TV EM EBIT50% 400 35040% 300 25030% 200 15020% 100 5010% 0 0% -50 -100-10% -150 Sales Growth EBIT 21 Sources: MTG/Viasat statistics
  21. 21. Conclusion TV is the reach media Advertisers spend less per capita in Eastern Europe than Western Europe The FMCG product price & margin is almost the same between Western & Eastern Europe but the contact cost is not CEE will play catch up & TV will take a large share of the returning market22
  22. 22. Well-positioned in the Baltics Audience share development 50.0 Lithuania 45.0 40.0 35.0 30.0 25.0 20.0 15.0 MTG 10.0 Audience share: 44% LNK 5.0 Market share: 43.1% Power ratio: 98% 0.0 2003 2004 2005 2006 2007 2008 2009 2010 2011 50.0 45.0 45.0 Estonia 40.0 Latvia 40.0 35.0 35.0 30.0 30.0 25.0 25.0 20.0 20.0 MTG 15.0 15.0 Kanal 2 MTG 10.0 Audience share: 37.3% LNT 10.0 Audience share: 38.6% BMA 5.0 Market share: 39.7% 5.0 Market share: 38.4% BMA Power ratio: 102.8% Power ratio: 103.1% 0.0 0.0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2003 2004 2005 2006 2007 2008 2009 2010 201123 Sources: Zenith OptiMedia, ATO, MTG estimates
  23. 23. With a full media house offering Competitive landscape Audience profile Older&Male Older&Female Local owner BMA BMA LNK Publicly owned Younger&Male Younger&Female Key actions CSOV •Continue to invest in programming to build market positions Sales •Stimulate ever increasing demand & grow pan-Baltic sales Costs •Re-build operations with lower cost bases24
  24. 24. And clear channel strategies Programming Schedule: a mix of entertainment and infotainment plus locally produced shows and acquired TOP US and Russian movies Broad, mainstream family and series entertainment channel Schedule: based on US TV series mixed with Pure entertainment adult animation (e.g. The Simpsons, TopCore channel for young adult Gear), acquired realities (e.g. American Idol, audience with slight Wipeout), sports (e.g. UEFA, hockey, RedProfiles male bias Bull), movies & daily 10’ OwP – Hot Weather as LPT Movie Lead in. Broad, Russian focused family entertainment Schedule: based on best available Russian channel series including sitcoms, telenovelas, dramas and hit movies (both Hollywood and Russian) in later Prime Time. 25
  25. 25. And some potential game changers Future situation • MTG ad market share: 72% • MTG audience share: 63% • Significantly enhanced profitability following substantial cost synergiesPrevious situation• MTG ad market share: 38%• MTG audience share: 37%• MTG Operating at a loss26 Sources: MTG estimates
  26. 26. We are re-writing the Czech book Audience share development 80.0 70.0 60.0 50.0 40.0 30.0 20.0 10.0 0.0 2004 2005 2006 2007 2008 2009 2010 2011 MTG CME Barrandov Audience share: 34.7% Market share: 30.6% Power ratio: 88.2%27 Sources: Zenith OptiMedia, ATO, MTG estimates
  27. 27. By building the media house Competitive landscape Audience profile Older&Male Older&Female Younger&Male Younger&Female Key actions CSOV •Media house implementation boosting total CSOV Sales •Proactive approach, new channel launches, own production Costs •Swift cost reduction efforts to preserve healthy EBIT margins28 Sources: Zenith OptiMedia, ATO, MTG estimates
  28. 28. And clear channel strategies Programming Broadcasts a broad line-up of entertainment with a slight focus on female viewers. Own produced drama as well as other own One of four Czech produced programme genres create the „traditional“ channels backbone of Prima Family with more than 15 years history Focused on popular The programming schedule of the male- acquisition series, sitcoms, skewed channel includes blockbusterCore movies and entertainment movies, as well as a number of new showsProfiles highly approved by and hit series never broadcast in the Czech younger audience. Republic before Primarily for women but also men will certainly Attracts a 15-44 year old female audience find their favorite with a fun, informative and romantic formats, program. broadcasting international series, blockbuster romantic and comedy movies as well as infotainment shows. 29
  29. 29. And now for the same in Bulgaria Audience share development 60.0 50.0 40.0 30.0 20.0 10.0 0.0 2005 2006 2007 2008 2009 2010 2011 MTG CME Public Channels Audience share: 28.1% Market share: 31.5% Power ratio: 112%30 Sources: Zenith OptiMedia, ATO, MTG estimates
  30. 30. By building the media house Competitive landscape Audience profile Older&Male Older&Female Younger&Male Younger&Female Key actions CSOV •Programming investment to ensure long-term growth in CSOV and Mini-pay revenues Sales •Proactive and efficient inventory utilization to counter pricing pressure from CME Costs •Streamlined operations and efficiency increases to optimize the cost base31 Sources: Zenith OptiMedia, ATO, MTG estimates
  31. 31. And clear channel strategies Programming Urban-focused, young, predominantly female • Be alternative to bTV whenever audience profile. possible Broadcasts a broad mix of • Broadening and investing in prime local content and access successful international • Improve the flow from main TV formats newscast to prime timeCore • Create the best possible flow Focuses on a male targetProfiles group with a mix of • Create sustainable schedule which acquired programmes, own delivers strong results leading into prime access productions and sports • Focus on more non-standard, Core target group is creative and product placement young male viewers. solutions Content cornerstones are • Continuing and improving our comedies and movies agency and client relationships 32
  32. 32. And could do the same in HungaryAudience share development 50.0 45.0 40.0 35.0 30.0 25.0 20.0 15.0 10.0 5.0 0.0 MTG Public Channels RTL Klub MTM-SBS Audience share: 8% Market share: 6.5% Power ratio: 81%33 Sources: Zenith OptiMedia, ATO, MTG estimates
  33. 33. By establishing the media house Competitive landscape Audience profile Older&Male Older&Female TV2 Younger&Male Younger&Female34 Sources: Zenith OptiMedia, ATO, MTG estimates
  34. 34. So, in summary Strong operational momentum with long-term perspective Strong position on the Baltic countries Successful formula in Czech Republic Implementing the formula in Bulgaria Current position holds many opportunities if the right strategies are implemented Markets are to return to growth in near future35
  35. 35. Returning market opportunity CEE TV ad markets where MTG is present 10 9 SEK 8.6 billion 8 SEK 2.2 billion 7 SEK 6.4 billion 6 5 4 3 2 1 0 2008 201136 Sources: Zenith Optimedia 2012/MTG Estimates

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