Mtg q2 presentation final

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Mtg q2 presentation final

  1. 1. Modern Times GroupMTGSecond Quarter 2012Financial Results CHAPTER NAME 1
  2. 2. Forward looking statementsForward-looking information and Safe Harbour Statement under the U.S. Private Securities Litigation ReformAct of 1995This 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 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 the prevailingeconomic and business environments in certain markets and the impact of the Eurozone crisis in particular;commercial risks related to expansion into new territories; political and legislative risks related to changes inrules and regulations in the various territories in which the Group operates; exposure to foreign exchange ratemovements and the US dollar and Euro currencies in particular; and the emergence of new technologies andcompetitors. These risks and uncertainties are described in more detail in the 2011 Annual Report, which isavailable from the Group’s website at www.mtg.se and in the Group’s registration statement on Form 20-F,which is available from the website of the U.S. Securities and Exchange Commission. 2
  3. 3. 3Q2 2012 RESULTS
  4. 4. Second quarter 2012Stable sales & increased cash flow• Stable sales y-o-y at constant and reported FX SEK mn• OPEX up 1% y-o-y at constant and reported FX 4,000 40%• EBIT before associated company income of 3,531 3,517 SEK 552 (593) mn 3,500 35% • Total EBIT of SEK 684 (688) mn, including 3,000 30% SEK 133 (95) mn of associated company income 2,500 25%• PTP of SEK 587 (681) mn including SEK -88 (30) mn non-cash impact of change in value of option 2,000 20% element of CDON convertible bond 1,500 15%• Net income of SEK 454 (479) mn and Basic EPS of SEK 6.35 (6.84) 1,000 10%• Receipt of SEK 55 (84) mn of dividends from 593 552 CTC Media 500 5%• Net cash flow from operations of SEK 728 (705) 0 0% mn Q2 2011 Q2 2012 Revenue EBIT* EBIT margin * EBIT excluding associated income Q2 2012 RESULTS4
  5. 5. First half year 2012A period of investments• Sales up 2% y-o-y at constant and reported FX SEK mn• OPEX up 4% y-o-y at constant and reported FX 8,000 40%• EBIT before associated company income of SEK 892 (1,025) mn 7,000 6,656 6,776 35% • Total EBIT of SEK 1,226 (1,374) mn, 6,000 30% including SEK 334 (349) mn of associated company income 5,000 25%• PTP of SEK 1,178 (1,352) mn including SEK -6 (34) mn non-cash impact of change in value of 4,000 20% option element of CDON convertible bond 3,000 15%• Net income of SEK 908 (969) mn and Basic EPS of SEK 13.04 (14.19) 2,000 10%• Receipt of SEK 107 (145) mn of dividends from 1,025 892 CTC Media 1,000 5%• Net cash flow from operations of SEK 793 (828) 0 0% mn H1 2011 H1 2012 Revenue EBIT* EBIT margin * EBIT excluding associated income Hq 2012 RESULTS5
  6. 6. 6
  7. 7. Free-TV ScandinaviaFinancial Highlights SEK mn• Sales down 3% y-o-y in Q2 and 2% y-o-y for H1 at constant FX 2,500 50% • Negative effect on ratings of World Ice 2,169 2,134 45% Hockey Championship and Euro 2012 2,000 40% football Championship• OPEX up 4% y-o-y in Q2 and 9% y-o-y for H1 35% • Programming investments in Norway 1,500 30% • Substantially lower y-o-y growth than in Q1 1,146 1,110 25%• EBIT margin of 22.6% (27.8%) and 19.1% 1,000 20% (26.7%) for the respective periods amongst 15% highest in Europe 580 500 408 10% • Sweden and Denmark profits up y-o-y 319 251 5% 0 0% Q2 2011 Q2 2012 H1 2011 H1 2012 Revenue EBIT EBIT margin Operating review7
  8. 8. Free-TV ScandinaviaOperating Highlights Commercial Audience Share (15-49)Sweden 45%• World Cup Ice Hockey Championship and Euro 37.6% 38.4% 2012 Football on competing channels impacted 40% 34.0% 34.9% TV3 and TV6 33.4% 35%• TV8 & TV10 slightly up y-o-y and slightly down q- o-q 30% 25.7% 24.9% 25.0%• TV3 benefits from a higher Swedish regional TV 25% 23.1% 22.2% advertising sales 20% 23.7%Norway 20.7% 19.2% 19.5% 15% 18.6%• Norwegian media house improved its planning and execution and fall schedule now announced 10%• Work ongoing to enhance the TV3 brand 5%Denmark 0%• TV3 CSOV up y-o-y, but TV3+ negatively impacted by Euro 2012 Football on competing channels. TV3 PULS CSOV up q-o-q Sweden Norway Denmark Operating review8
  9. 9. Pay-TV NordicFinancial Highlights SEK mn• Sales up 5% y-o-y in Q2 and 7% y-o-y for H1 at constant FX 3,000 50%• OPEX up 7% y-o-y in Q2 and 9% y-o-y for H1 45% 2,499 • Ongoing investments in Viaplay, higher y-o- 2,500 2,325 40% y content costs and marketing for the newly rebranded Viasat film channels and 4 new 35% 2,000 HD movie channels 30%• EBIT margin of 17.9% (19.2%) and 17.6% (19%) 1,500 1,250 25% for H1 1,186 20% 1,000 15% 443 441 10% 500 228 223 5% 0 0% Q2 2011 Q2 2012 H1 2011 H2 2012 Revenue EBIT EBIT margin Operating review9
  10. 10. Pay-TV NordicOperating Highlights Premium subscribers• Premium subscriber base down q-o-q 1,200 • Decline in satellite premium subscriber 1,000 base offset to an extent by growing third 800 Thousands party network subscriber base 600• Premium satellite ARPU up 7% y-o-y in Q2 to SEK 400 4,926 (4,594) 200 • Continued growth in penetration of value 0 added services • Impact of previously introduced price increases Satellite subscribers 3rd party network subscribers• Continued development of Viaplay • Strengthened content offering Value added services 350 • Launch of first of its kind hybrid internet- 300 enabled and DTT set-top box in Sweden in 250 Thousands June 200 150 100 50 0 Operating review ViasatPlus HDTV Multi-room10
  11. 11. Free-TV Emerging MarketsFinancial Highlights SEK mn Free-TV Emerging Markets• Total sales down 3% y-o-y in Q2 and stable y-o-y for H1 at constant FX 1,200 50% 1,018 992 • Excluding Slovenia, sales down 1% y-o-y in 1,000 40% Q2 and up 2% y-o-y for H1 at constant FX 800 598 30%• OPEX down 11% y-o-y in Q2 and 9% y-o-y for H1 560 600 • Closing down of Slovenian broadcasting 20% 400 and ending of amortisation of Bulgarian and Czech licenses 200 10% 73 91 100 41• EBIT margin of 16.3% (12.1%) in Q2 and 10% 0 0% (4.1%) for H1 Q2 2011 Q2 2012 H1 2011 H2 2012• Baltic, Czech & Bulgarian sales stable y-o-y in Revenue EBIT EBIT margin Q2 at constant FX SEK mn Baltics, Czech Republic & Bulgaria 1,000 901 909 50%• Combined OPEX down 5% y-o-y in Q2 and 4% for H1 800 40% 531 516• EBIT margin of 20% (18%) in Q2 and 14.3% 600 30% (10.3%) for H1 400 20% 200 96 103 93 130 10% 0 0% Q2 2011 Q2 2012 H1 2011 H2 2012 Revenue EBIT EBIT margin11
  12. 12. Free-TV Emerging MarketsOperating HighlightsBaltics Commercial Audience Share• Sales up 5% y-o-y in Q2 and 4% y-o-y for H1 at 50% constant FX• Stable pan-Baltic commercial target audience share of 40.5% (40.4%) 40%• TV ad market shares up in Estonia and Latvia, and stable in Lithuania 30%Czech Republic• Sales down 2% y-o-y in Q2 but up 5% y-o-y for H1 20% at constant FX• Further market share gains following continued significant audience share gains 10%Bulgaria• Sales stable in Q2 y-o-y and down 3% y-o-y for H1 at constant FX Estonia (15-49) Latvia (15-49)*• Lower market shares in Q2 following lower ratings Lithuania (15-49) Czech Republic (15-54) due to the airing of Euro 2012 on competing Bulgaria (18-49) channels Operating review * MTG will include the LNT channels in its reported combined CSOV in Latvia with effect from Q3 201212
  13. 13. Pay-TV Emerging MarketsFinancial Highlights SEK mn• Sales up 12% y-o-y in Q2 and 13% y-o-y for H1 at constant FX 600 50% • Growth driven by mini-pay in Russia and 524 45% Baltic, Ukrainian and Russian satellite 500 platforms 445 40%• OPEX up 3% y-o-y in Q2 and 4% y-o-y for H1 35% 400 • Ongoing investments in the satellite platforms to drive subscriber intake 30% • Lower costs for the wholesale mini-pay 300 25% 273 channel business 230 20%• EBIT more than doubled y-o-y in Q2 and more than tripled for H1 200 15% • EBIT margin of 21.1% (9.3%) in Q2 and 17.5% (6.5%) for H1 10% 100 91 • Positive FX effects in the quarter 58 5% 22 29 0 0% Q2 2011 Q2 2012 H1 2011 H2 2012 Revenue EBIT EBIT margin Operating review13
  14. 14. Pay-TV Emerging MarketsOperating Highlights Satellite subscribers• 96,000 net new subscribers added y-o-y 600 30% • Same seasonal pattern as in 2011 500 25% • Addition of sports content and launch of Thousands 400 20% two new Viasat Sports premium pay-TV 300 15% channels in the Baltics 200 10% • Successful launch of HD offering in 100 5% Ukraine 0 0%• Wholesale mini-pay business added nearly 12 mn subscriptions y-o-y and nearly 7 mn q-o-q • Continued growth in the Russian market Satellite subscribers Subscriber growth y-o-y in particular Mini-pay TV subscriptions 80,000 Thousands 70,000 60,000 50,000 Operating review 40,000 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 201214
  15. 15. Other BusinessesHighlights SEK mn• Comprised MTG’s Radio, Bet24 and MTG Studios operations 900 852 804• Sales of SEK 397 (452) mn in Q2 and SEK 804 800 (852) mn for H1 700 • Down 13% y-o-y in Q1 and 6% for H1 at constant FX 600 • Reflects discontinuation of Bet24 from 3 500 May 452 397 • Lower y-o-y sales for the Swedish radio 400 business and MTG studios to some extent 300 offset by growth for the Norwegian radio business 200• Combined OPEX down 4% y-o-y in Q2 and up 3% 100 64 y-o-y for H1 44 -9 5 • Lower sales from Swedish radio and 0 increased costs for MTG Studios offset to Q2 2011 Q2 2012 H1 2011 H1 2012 -100 an extent by net gain from sale of Bet24 Revenue EBIT Operating review15
  16. 16. Looking aheadFree-TV Scandi & Nordic Pay-TV• Free-TV Scandinavia • The outlook for the reminder of 2012 is for continued TV advertising market growth in Sweden and Norway, but less clear picture for Denmark • Our objective is to take back and increase Scandinavian advertising market shares but more to do with execution than incremental investments • We therefore anticipate that full year OPEX will grow at normalized mid-single digit percentage point level, rather than previously anticipated mid to high single digit percentage point levels• Nordic Pay-TV • We continue to expect sales growth to be driven by rising satellite premium ARPU and 3rd party network subscriber growth • Now is the time to invest in our linear channels and the Viaplay on-demand service to drive further growth, which is why we are adjusting our anticipated full year operating margin from approximately 18% to approximately 17% Operating review16
  17. 17. Looking aheadEmerging markets operations• Free-TV Emerging markets • As before, we are yet to see any trend shift in competitor behavior or a return to growth in advertising spending or pricing • However, costs are down and we do not see the need to increase our level of investment beyond what we have already done ahead of a return to sustained market growth • We are now restructuring and integrating the recently acquired LNT free-TV operations in Latvia so the reduction in operating costs will be significantly lower in the second half of the year than the first half• Pay-TV Emerging markets • We expect continued subscriber intake in 2012 on the satellite platforms and continued growth of mini-pay subscriptions • As before, we also continue to expect higher full year profits in 2012 than 2011 but that the increase in H2 will be lower than the more than 200% increase in H1 • This reflects the fact that now is the time to invest in our premium content and channel offering, and the roll-out of Viaplay in Russia, in order to drive future growth Operating review17
  18. 18. 18CHAPTER NAME
  19. 19. Income Statement Q2 Q2 H1 H1• Lower y-o-y depreciation & (SEK mn) 2012 2011 2012 2011 amortisation charges of SEK 28 (50) Net sales 3,517 3,531 6,776 6,656 mn in Q2 and SEK 56 (99) mn for H1 following ending of amortisation of EBIT before associated 552 593 892 1,025 company income Czech and Bulgarian broadcasting licensees Associated company income 133 95 334 349• Net interest charges down y-o-y to EBIT 684 688 1,226 1,374 SEK -8 (-14) mn in Q2 and SEK -24 Net interest & other financial -98 -7 -48 -22 (-28) mn for H1 items Income before tax 587 681 1,178 1,352• Y-o-y change in other financial items included Tax -133 -202 -270 -383 • SEK -88 (30) mn non-cash Net income 454 479 908 969 financial impact in Q2 and Basic EPS 6.35 6.84 13.04 14.19 SEK -6 (34) mn for H1 from the change in value of the Diluted EPS 6.34 6.79 12.99 14.10 option element of the SEK 250 mn CDON Group convertible bond mn• Tax charges of SEK 133 (202) mn in Q1 and SEK 270 (383) mn for H1 • Underlying effective tax rate of Financial Review 26% in Q2 and H119
  20. 20. Cash Flow• Cash flow from operations included Q2 Q2 H1 H1 (SEK mn) 2012 2011 2012 2011 receipt of SEK 55 (84) mn of dividend payments from CTC Media in Q2 and Cash flow from SEK 107 (145) mn for H1 501 528 835 989 operations• Investment in shares amounted to SEK Changes in working 100 (-) mn and comprised the acquisition capital 227 178 -42 -162 of the LNT free-TV business in Latvia• Other cash flow from investing activities Net cash flow from 728 705 793 828 of SEK 61 (-) mn comprised the majority operations of the net cash to be received from the sale of the Bet24 operations Cash flow used in -58 -20 -57 -52 investing activities• CAPEX less than 1% of Group net sales in Q1 and for H1 Cash flow used in -582 -646 -528 -834 financing activities• Cash flow used in financing activities included dividend payment of SEK 600 Net change in (498) mn cash & cash 88 40 207 -58 equivalents Financial Review20
  21. 21. Financial Position• Total borrowings of SEK 1,677 (2,382) mn as at 30 Jun 30 Jun 30 Jun 2012 and cash balance of SEK 675 (SEK mn) 2012 2011 (424) mn Non-current assets 5,884 8,909• Net debt of SEK 778 (1,716) mn as at 30 Jun Current assets 5,815 5,525 2012 and available liquid funds of SEK 5,655 (4,682) mn 11,699 14,434 Total assets• SEK 2,170 (1,940) mn book value of 37.9% shareholding in CTC Media and public equity Shareholders’ equity 4,714 6,833 market value of SEK 3,345 mn Long-term liabilities 2,309 3,020 Net debt / EBITDA ratio Current liabilities 4,676 4,5811.2 1.2 1.1 11,699 14,434 Total equity & liabilities 0.8 0.7 0.7 0.6 0.3 0.3 0.3 Financial ReviewQ1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q210 10 10 10 11 11 11 11 12 1221
  22. 22. 22
  23. 23. 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 information23

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