Corporate presentation feb14

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Corporate presentation feb14

  1. 1. MODERN TIMES GROUP SHAPING THE FUTURE OF ENTERTAINMENT FEBRUARY 2014 1
  2. 2. THE STORY A SUCCESSFUL TRACK RECORD (10Y) A UNIQUE PLATFORM A BRIGHT FUTURE INTEGRATED & DIVERSIFIED RISING VIDEO CONSUMPTION 27% ROCE (AV) TV EVERYWHERE & FOR EVERYONE CONTENT RICH 17% TSR CAGR DECENTRALIZED 11% SALES CAGR 13% EBIT CAGR DIGITAL DELIVERY & ENGAGEMENT 2
  3. 3. LONG TERM VALUE CREATION BASED ON CLEAR GROWTH STRATEGY CONTENT DIGITAL GEO EXPANSION Multi-platform & country content acquisition & monetization strategy Leading content creator, producer & distributor First to market full service SVOD OTT operator & leading AVOD player + wide range of new products & services Focus on roll-out of new products to existing markets + expansion in CEE & Africa 3
  4. 4. CONTENT REMAINS KING WE ARE THE BIGGEST BUYER IN TOWN TOTAL NUMBER OF BROADCAST HOURS (2013) 1,000,000 900,000 879,470 800,000 700,000 600,000 481,800 500,000 394,200 400,000 297,840 300,000 236,520 210,240 CME Pro7 200,000 100,000 0 MTG RTL Bonnier Mediaset Source: MTG Research 4
  5. 5. LONG TERM PARTNERSHIPS WITH RELEVANT CONTENT PROVIDERS 5
  6. 6. OUR IN-HOUSE STUDIOS BUSINESS HAS QUADRUPLED IN SIZE TOP 5 TV PRODUCERS IN THE NORDICS (BY SALES 2012) TOP 10 CONTENT DISTRIBUTORS (RATED BY UK INDEPENDENT TV PRODUCERS) HIGHEST RATED 1 BBC WW 1 BBC WW 2 ITV Global 2 DRG 3 DRG 3 Zodiak Rights 3 Zodiak Rights 4 ITV Global 3 Shine 5 Fremantle Enterprises 6 Fremantle Enterprises 6 Endemol WW 6 Endemol WW 7 Electric Sky 6 DCD Media 8 Passion Distribution 6 + MOST USED All3Media 9 All3Media 10 Passion Distribution 9 Sky Vision Source: Televisual Distributor Poll, September 2013 #1 IN THE NORDICS WITH AN EXPANDING EMERGING MARKETS FOOTPRINT AND GLOBAL DISTRIBUTION CAPABILITY 6
  7. 7. OFFICIAL BROADCASTER OF THIS MONTH’S WINTER OLYMPICS 7
  8. 8. VIDEO CONSUMPTION IS GROWING VIDEO USAGE IN THE USA – AVERAGE MINUTES PER DAY PER USER (2+) ONLINE/MOBILE VIDEO ONLINE VIDEO MOBILE VIDEO 296 297 306 307 314 314 +17% CAGR ONLINE/MOBILE VIDEO 0.4% CAGR TRADITIONAL TRADITIONAL TV LIVE TV TIME SHIFTED TV Q3 ‘08 Q3 ‘09 Q3 ‘10 Q3 ‘11 Q3 ‘12 Q3 ‘13 SOURCE: Nielsen Cross Platform reports 8
  9. 9. VIAPLAY OPENS UP A NEW WORLD AS OTT ENABLES UNIVERSAL REACH 9
  10. 10. DEVELOPING FAST WITH A WIDE RANGE OF DIGITAL PRODUCTS ViaPlay Premium VOD TV, Movies and Sports Free VOD TV Channels Ad Financed Services Free VOD Sport Clips Ad Financed Service Free Music Streaming Ad Financed Service Mobile TV Companion 2nd Screen Application Download Games Store Transaction Service Klipster Coupon Service Online to Store App Vertical video content sites style, family, food, cool etc. 10
  11. 11. MTGX - THE GROUP PLATFORM TO ACCELERATE DIGITAL GROWTH xPLAY xVENTURES xCREATIONS xLABS Viaplay TV play Sports Music Games Like.TV Mobisodes Webisodes TV extensions Web / Apps Social Sign-on (World class VOD) (Build portfolio of services) (Digital first productions) (Digital development) 11
  12. 12. RUSSIA - HUGE POTENTIAL DIGITAL DECISION TIME FOR 150 MILLION RUSSIANS 38% OWNERSHIP IN CTCM EUROPE'S BIGGEST TV AD MARKET IN 2015 OWN 5 OUT OF TOP 20 PAY CHANNELS INCLUDING TOP 2 MORE THAN 60 MN SUBSCRIPTIONS HD PREMIUM PACKAGE ROLL-OUT 12
  13. 13. AFRICA - THE NEXT BIG THING SSA = 7/10 FASTEST GROWING ECONOMIES 2011-15 FREE-TV CHANNELS IN GHANA & TANZANIA PAY-TV CHANNELS NOW AVAILABLE IN 6 COUNTRIES ESTABLISHED CONTENT PRODUCTION PLAYER 13
  14. 14. SEGMENTAL HIGHLIGHTS AND Q4 PERFORMANCE 14
  15. 15. Q4 2013 – HIGHLIGHTS  Accelerated growth for 5th consecutive quarter - sales up 14% at constant FX & 6% on an organic basis  Free-TV Scandi – audience shares up in all 3 markets & 2nd consecutive quarter with sales growth  Free-TV Emerging Markets – continued strong growth in soft market conditions with further investments  Pay-TV Nordic – net subscriber growth, rising prices & operating margin within the range  Pay-TV Emerging Markets – volume growth & profitability above expectations  Studios – organic + M&A led growth with rising profitability levels  Proposed annual ordinary cash dividend of SEK 10.50 = record high pay-out ratio of 56% excl. non-recurring items 15
  16. 16. GROUP PERFORMANCE INVESTMENTS DRIVING GROWTH SALES GROWTH (Y-O-Y) 600 20 500 15 400 300 10 200 5 100 Q4 2013 Q3 2013 Q2 2013 Sales growth at constant fx Q1 2013 Q4 2012 Q3 2012 Q2 2012 Q1 2012 16% 14% 12% 10% 8% 6% 4% 2% 0% -2% EBIT (SEK MN) AND EBIT MARGIN (%) Organic sales growth 0 0 2012 2012 2012 2012 2013 2013 2013 2013 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 EBIT excl associated income & one-off items EBIT margin INVESTMENTS ARE HAVING THE DESIRED EFFECT - CUSTOMER OFFERINGS ARE STRONGER THAN EVER 16
  17. 17. FREE-TV SCANDINAVIA SECOND CONSECUTIVE QUARTER WITH SALES GROWTH SALES (Y-O-Y) AT CONSTANT FX EBIT (SEK MN) AND EBIT MARGIN (%) 12% 300 10% 250 8% 30.0% 250 21.8% 25.0% 214 18.6% 6% 200 4% 150 15.0% 100 10.0% 50 5.0% 2% -6% -8% Q4 2013 Q3 2013 Q2 2013 Q1 2013 Q4 2012 Q3 2012 Q2 2012 Q1 2012 -4% Q4 2011 -2% Q3 2011 0% 0 20.0% 0.0% Q4 2012 Q4 2013 EBIT EBIT margin -10% HEALTHY MARGIN WITH CONTINUED INVESTMENTS. WINTER OLYMPICS TO BOOST SALES & ADVERSELY IMPACT Q1 2014 EARNINGS 17
  18. 18. FREE-TV SCANDINAVIA AUDIENCE SHARE GAINS IN ALL THREE MARKETS CSOV (15-49) – Q4 2013 VS Q4 2012 35.0 CSOV (15-49) – 2006 TO 2013 40 31.5 31.8 30.0 25.2 25.0 20.6 20.0 16.7 16.9 35 30 25 15.0 20 10.0 15 5.0 10 0.0 Sweden Q4 2012 Norway Denmark Q4 2013 2006 2007 Sweden 2008 2009 2010 Denmark 2011 2012 Norway CONTINUED STRONG PERFORMANCE IN DENMARK - HIGHEST Q4 CSOV SINCE 2000 18 2013
  19. 19. FREE-TV EMERGING MARKETS CONTINUED STRONG GROWTH 18% SALES GROWTH (Y-O-Y) AT CONSTANT FX EBIT (SEK MN) AND EBIT MARGIN (%) 150 35% 20% 30% 15.4% 25% 15% 100 10.6% 20% 10% 15% 50 10% 5% 5% Q4 2013 Q3 2013 Q2 2013 Q1 2013 Q4 2012 Q3 2012 Q2 2012 Q1 2012 Q4 2011 -5% Q3 2011 0% 0 0% Q4 2012 Q4 2013 EBIT EBIT margin PROFITABILITY IMPACTED BY PROGRAMMING INVESTMENTS AND ENTRY INTO TANZANIA 19
  20. 20. FREE-TV EMERGING MARKETS AUDIENCE SHARE GAINS IN ALMOST ALL MARKETS CSOV (15-49) – (%) 60 50 48.5 TV AD MARKETS IN MTG TERRITORIES 51.8 40 34.1 36.9 39.1 34.1 30 20 10 0 Baltics Bulgaria Q4 2012 10 9 8 7 6 5 4 3 2 1 0 Czech Rep. SEK 8.6 bn 2008 SEK 5.3 bn 2013e Q4 2013 SEK 3.3 BN OR 60% GROWTH POTENTIAL IF WE SEE A FULL RECOVERY IN THE TV AD MARKET 20
  21. 21. PAY-TV NORDIC SUBSCRIBER GROWTH + RISING PRICES 7% SALES GROWTH (Y-O-Y) AT CONSTANT FX EBIT (SEK MN) AND EBIT MARGIN (%) 300 12% Q4 2013 0 Q3 2013 0% Q2 2013 50 Q1 2013 2% Q4 2012 100 Q3 2012 4% Q2 2012 6% 150 Q1 2012 8% 200 Q4 2011 250 Q3 2011 10% 20% 15.4% 15% 12.0% 10% 5% 0% Q4 2012 EBIT Q4 2013 EBIT margin CONTINUE TO EXPECT HIGHER MARGIN FOR FY14. OLYMPICS TO BOOST SALES & ADVERSELY IMPACT Q1 2014 EARNINGS 21
  22. 22. PAY-TV NORDIC SUBSCRIBER GROWTH + RISING PRICES PREMIUM SUBSCRIBER DEVELOPMENT (‘000) ARPU FOR PREMIUM DTH (SEK) - ANNUALIZED 1,200 5,200 1,000 5,000 800 4,800 600 4,600 400 Satellite subscribers 3'rd party network subscribers Q4 2013 Q3 2013 Q2 2013 4,200 Q1 2013 0 Q4 2012 4,400 Q3 2012 200 4,000 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2011 2011 2012 2012 2012 2012 2013 2013 2013 2013 GOOD SUBSCRIBER GROWTH FOR VIAPLAY AND 3RD PARTY. DTH DOWN AS ANTICIPATED. OVERALL BASE CONTINUES TO GROW 22
  23. 23. PAY-TV EMERGING MARKETS OUT-PERFORMING EXPECTATIONS 20% SALES GROWTH (Y-O-Y) AT CONSTANT FX EBIT (SEK MN) AND EBIT MARGIN (%) 25% 80 70 60 50 40 30 20 10 0 20% 15% 10% 5% Q4 2013 Q3 2013 Q2 2013 Q1 2013 Q4 2012 Q3 2012 Q2 2012 Q1 2012 Q4 2011 Q3 2011 0% 20% 15.9% 15% 10% 5% 1.9% 0% Q4 2012 Q4 2013 EBIT EBIT margin Q4 INCLUDED SOME POSITIVE ONE-OFFS. NO CHANGE TO THE EXPECTATION FOR RISING PROFITABILITY LEVELS IN 2014 23
  24. 24. PAY-TV EMERGING MARKETS CONTINUED STRONG SUBSCRIPTION GROWTH SUBSCRIBERS / SUBSCRIPTIONS (‘000) INVESTING INTO THE HD MARKET IN THE CIS 100 90 80 70 60 50 40 30 20 10 0 700 600 500 400 300 200 100 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Mini-Pay subscriptions (million) DTH ('000) 395 RUB ($13) = ADDED >8 MILLION MINI-PAY SUBSCRIPTIONS SINCE LAST YEAR TO A TOTAL OF 92 MILLION 24
  25. 25. MTG STUDIOS, MTGX, RADIO STUDIOS DRIVES GROWTH Organic + M&A led sales growth M&A growth from acquisition & consolidation Entertainment (Nov), DRG & Novemberfilm (Jun) Oct-Dec Oct-Dec Sales (SEKm) 593 316 89% -29% Growth (organic) 13% n/a 11 0 1.9% 0.0% Radio sales stable in Norway & down in Sweden  2012 13% organic sales growth driven by MTG Studios  2013 Growth (at constant FX)  of Nice OpEx up, Profits up  Healthy profitability in MTG Studios and Radio Norway  Reduced losses in Radio Sweden after cost savings  Ongoing investment by MTGx to accelerate digital development – Splay & Net Info are two examples of exciting new areas EBIT (SEKm) EBIT margin 25
  26. 26. STUDIOS NOW A SCALE PLAYER     PRODUCTION HOUSE Sweden Norway Denmark Holland           Hungary Bulgaria Slovenia Romania Serbia Czech Rep. Costa Rica Latvia Estonia Lithuania SALES OF SEK1.7BN (2012 PROFORMA), PRODUCING >3,500H OF CONTENT SOLD TO >80 COUNTRIES 26
  27. 27. Q4 2013 – SUMMARY STRONGER PRODUCTS. HIGHER GROWTH  PRODUCTS & CONSUMER OFFERINGS STRONGER, MORE RELEVANT & MORE AVAILABLE THAN EVER  AUDIENCE SHARE GAINS & SUBSCRIBER GROWTH IN ALMOST ALL MARKETS  CLEAR FOCUS ON STRATEGIC GROWTH DRIVERS – CONTENT, DIGITAL, GEOGRPHICAL EXPANSION  ACCELERATING ORGANIC GROWTH BOOSTED BY M&A  RECORD HIGH PAY-OUT RATIO & FINANCIAL FIREPOWER 27
  28. 28. MTG INVESTOR RELATIONS FOR FURTHER INFORMATION, PLEASE VISIT WWW.MTG.SE OR CONTACT: TEL: +46 (0) 73 699 2714 EMAIL: INVESTOR.RELATIONS@MTG.SE 28

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