Q2 2011 presentation

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Q2 2011 presentation

  1. 1. Modern Times Group MTG AB Second Quarter 2011 Financial Results1
  2. 2. 2Q2 2011 Financial Results
  3. 3. Second Quarter 20119% Sales Growth at Constant FX SEK mn• Sales up 9% y/y at constant FX & up 3% y/y at 4,000 40% reported FX to SEK 3,531 (3,413) mn• OPEX up y/y to SEK 2,938 (2,837) & up 9% y/y 3,500 35% at constant FX• Record EBIT before associated company income 3,000 30% of SEK 593 (575) mn • Stable operating margin of 17% (17%) 2,500 25%• Total EBIT of SEK 681 (698) mn including SEK 88 (123) mn of associated company income 2,000 20%• PTP of SEK 681 (672) mn• Total net income of SEK 479 (522) mn incl. SEK 1,500 15% 20 mn of the net income from CDON in Q2 2010 1,000 10%• Basic EPS of SEK 6.84 (7.27) • Total basic EPS of SEK 6.84 (7.58) 500 5%• SEK 498 (363) mn of annual dividend paid to shareholders 0 0%• Receipt of SEK 84 (30) mn (USD 13 mn) quarterly Q2 2010 Q2 2011 Q2 2011 Financial Results dividend cash payment from associated company Revenue EBIT* EBIT margin CTC Media * EBIT excluding associated income3
  4. 4. First Half Year 20119% Sales Growth at Constant FX SEK mn• Sales up 9% y/y at constant FX & up 3% y/y at 7,000 40% reported FX to SEK 6,656 (6,467) mn• OPEX of SEK 5,632 (5,515) mn - up 8% y/y at 6,000 35% constant FX• EBIT before associated companies up 8% y/y to 30% 5,000 SEK 1,025 (952) mn • Stable operating margin of 15% (15%) 25% 4,000• Total EBIT up 16% y/y to SEK 1,365 (1,182) mn including SEK 341 (229) mn of associated 20% company income 3,000• PTP up 22% y/y to SEK 1,352 (1,107) mn 15%• Net income from continuing operations up 25% y/y 2,000 to SEK 969 (776) mn 10% • Total net income up 18% y/y to SEK 969 1,000 (822) mn incl. SEK 45 mn of net income 5% from CDON Group in H1 2010• Basic EPS from continuing operations up 23% y/y 0 0% H1 2010 H1 2011 H1 2011 Financial Results to SEK 14.19 (11.49) • Total basic EPS up 16% y/y to SEK 14.19 Revenue EBIT* EBIT margin (12.18) * EBIT excluding associated income• SEK 145 (58) mn (USD 23 mn) of cash dividends from CTC Media4
  5. 5. Operating review
  6. 6. Free-TV ScandinaviaFinancial Highlights SEK mn• Sales of SEK 1,146 (1,116) mn in Q2 & SEK 2,500 50% 2,169 (2,096) mn for YTD • Up 7% y/y in Q2 & up 9% for YTD at 45% constant FX 2,000 40%• OPEX of SEK 827 (819) mn y/y in Q2 & SEK 35% 1,590 (1,583) mn for YTD 1,500 30% • Up y/y at constant FX • Higher programming investments & y/y 25% impact of launch of TV10 in Sweden in Sep. 1,000 20% 2010 15%• EBIT up 7% y/y in Q2 to SEK 319 (297) mn in Q2 500 10% & up 13% to SEK 580 (513) mn for YTD 5%• Increased EBIT of 28% (27%) in Q2 & 0 0% 27% (24%) for YTD Q2 2010 Q2 2011 H1 2010 H1 2011 Revenue EBIT EBIT margin Operating review6
  7. 7. Free-TV ScandinaviaOperating Highlights Commercial Audience Share (15-49)Sweden• Target audience share of 37.6% (37.2%) in Q2 • Up from 33.8% in Q1 50% • Launch of spring programming schedules • Positive q/q CSOV development for all four 40% channels 30%Norway• Target audience share of 24.8% (28.3%) in Q2 20% • Up from 22.9% in Q1 • Y/y performance reflected impact of launch 10% of 2 new channels by competitors in Q4 2010 & coverage of FIFA World Cup in Q2 2010 0% Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2009 2009 2009 2010 2010 2010 2010 2011 2011Denmark Sweden Norway Denmark• Target audience share of 25.7% (24.1%) in Q2 • Up from 25.4% in Q1 Operating review • Strengthened programming schedules & focus on own productions • TV3+ and TV3 PULS continued to grow & 7 TV3 CSOV stable
  8. 8. Pay-TV NordicFinancial Highlights SEK mn Sales of SEK 1,186 (1,115) mn in Q2 & SEK 2,500 50% 2,325 (2,207) mn for YTD • Up 10% y/y both in Q2 & for YTD at 45% constant FX 2,000 40%• OPEX of SEK 958 (894) mn in Q2 and SEK 1,882 35% (1,794) mn for YTD 1,500 30% • Up y/y at constant FX for both Q2 & YTD • Ongoing investments in premium sports 25% content 1,000 20% • Addition of 7 Viasat channels since beginning of 2010 15% 500 10%• EBIT up 3% y/y to SEK 228 (221) mn in Q2 & up 7% to SEK 443 (413) mn for YTD 5% 0 0%• Operating margins of 19% (20%) in Q2 & 19% Q2 2010 Q2 2011 H1 2010 H1 2011 (19%) for YTD Revenue EBIT EBIT margin Operating review8
  9. 9. Pay-TV NordicOperating Highlights 1,200 Premium subscribers• 23,000 net new premium subscribers added y/y & 1,000 overall premium subscriber base stable q/q 800• Growth driven by Thousands 600 • Subscriber intake on 3’rd party networks 400 • Continued satellite intake in Sweden offset 200 by lower y/y subscriber levels in Norway & Denmark 0 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011• Premium ARPU up to SEK 4,594 (4,446) – up 8% Satellite subscribers 3rd party network subscribers y/y at constant FX • Previously introduced price increases 300 • Ongoing customer uptake of value-added Value added services 250 services 200 Thousands 150 100 50 0 Operating review Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 ViasatPlus HDTV Multi-room9
  10. 10. Free-TV Emerging MarketsFinancial Highlights SEK mn Free-TV Emerging Markets• Total sales of SEK 598 (582) mn in Q2 & SEK 1,200 1,018 (1,016) mn for YTD – up 8% y/y in Q2 & up 1,000 7% y/y for YTD at constant FX • Return to growth for a number of 800 advertising markets 600• EBIT up 74% y/y to SEK 73 (42) mn in Q2 400 • Up to SEK 41 (-24) mn for YTD 200 • Increased EBIT margin of 12% (7%) in Q2 0 & margin of 4% (-) for YTD Q2 2010 Q2 2011 H1 2010 H1 2011 Revenue EBIT• Baltic, Czech & Bulgarian sales of SEK 531 SEK mn Baltics, Czech Republic & Bulgaria (510) mn in Q2 & SEK 901 (888) mn for YTD 1,000 • Up 8% both in Q2 & for YTD at constant FX 800• EBIT up 51% y/y to SEK 95 (63) mn in Q2 & 600 almost tripled to SEK 93 (26) mn for YTD 400 • Increased EBIT margins of 18% (12%) in Q2 & 10% (3%) for YTD 200 0 Q2 2010 Q2 2011 H1 2010 H1 201110 Revenue EBIT
  11. 11. Free-TV Emerging MarketsOperating HighlightsBaltics 50%• Sales up 5% y/y in Q2 & up 8% for YTD at 45% constant FX• Increased pan-Baltic target audience share of 40% 41.0% (39.3%) in Q2 35%• Selective programming investments to drive CSOV & market shares 30% 25%Czech Republic 20%• Sales up 24% in Q2 & 20% for YTD at constant FX & outperformed TV ad market for Q2 & YTD 15%• Significant y/y CSOV gains following previously 10% implemented programming investments Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011• New channel Prima LOVE developing according to plan Estonia (15-49) Latvia (15-49)Bulgaria Lithuania (15-49) Czech Republic (15-54)• Sales down 17% y/y in Q2 & down 15% for YTD Bulgaria (18-49) at constant FX reflecting overall TV ad market Operating review performance and low ad pricing• Continued focus on programming schedules yields increased CSOV y/y11
  12. 12. Pay-TV Emerging MarketsFinancial Highlights SEK mn• Sales of SEK 230 (225) mn in Q2 & SEK 445 500 50% (443) mn for YTD – up 19% & 15% at constant FX for the two periods 450 45% • Growth driven by continued y/y subscriber 400 40% intake on the Ukrainian and Russian platforms 350 35% • Y/y effect of consolidation of 50% of Raduga TV from February 2010 & full 300 30% consolidation of Viasat Ukraine from the 250 25% June 2010 200 20%• OPEX of SEK 209 (188) mn in Q2 & SEK 416 150 15% (366) mn for YTD – higher at constant FX • launch of 10 new Viasat channels since 100 10% beginning of 2010, 50 5% • Consolidation of 50% of Raduga TV & 100% of Viasat Ukraine, with ongoing 0 0% investments in the development of the Q2 2010 Q2 2011 H1 2010 H1 2011 platforms Revenue EBIT EBIT margin Operating review• EBIT of SEK 22 (36) mn in Q2 & 29 (76) mn for YTD • Operating margins of 9% (16%) in Q2 & 6% 12 (17%) for YTD
  13. 13. Pay-TV Emerging MarketsOperating Highlights Satellite subscribers• 89,000 net new subscribers added y/y 500 • Significant subscriber growth on the Ukrainian satellite platform 400 Thousands • Development of Raduga TV satellite 300 subscriber base • Stable position in the Baltics 200• Wholesale mini-pay business added almost 100 15.6mn subscriptions y/y & almost 3 mn new subscriptions q/q 0 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011• High Definition versions of two of Viasat’s international thematic documentary channels – 70,000 Mini-pay TV subscriptions Viasat History HD and Viasat Nature HD – launched in May 2011 across 22 countries in 60,000 CEE. Thousands 50,000 40,000 Operating review 30,000 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 201113 Mini-pay TV subscriptions
  14. 14. Other BusinessesHighlights SEK mn• Comprises MTG’s Radio, Bet24 and Modern 1,000 30% Studios operations 900 25% 800• Sales of SEK 452 (482) mn in Q2 & SEK 852 (892) mn for YTD – down 3% y/y in Q2 & stable 700 20% for YTD at constant FX 600 • Y/y sales growth in Norwegian and Swedish 500 15% radio operations offset by lower y/y sales for Bet24 and Modern Studios 400 10% 300• Combined OPEX of SEK 409 (441) mn in Q2 & 200 5% SEK 789 (826) mn for YTD – OPEX down y/y in 100 Q2 & stable for YTD at constant FX 0 0% Q2 2010 Q2 2011 H1 2010 H1 2011• EBIT of SEK 43 (42) mn in Q2 & SEK 64 (67) mn Revenue EBIT EBIT margin for YTD excl. associates • EBIT margins of 10% (10%) in Q2 & 8% (8%) for YTD• Total EBIT of SEK 44 (48) mn in Q2 & SEK 64 Operating review (72) mn for YTD14
  15. 15. 15Financial Review
  16. 16. Income Statement• Depreciation & amortisation charges Q2 Q1 H1 H1 of SEK 50 (55) mn in Q2 & SEK 99 (SEK mn) 2011 2011 2011 2010 (110) mn for YTD Net sales 3,531 3,413 6,656 6,467• Net interest and other financial items of SEK 0 (-27) mn in Q2 & SEK -13 EBIT before associated company 593 575 1,025 952 (-74) mn for YTD income & non-recurring items• Y/y reduction in net interest charges Associated company income 88 123 341 229 to SEK -14 (-16) mn in Q2 & SEK - Total EBIT 681 698 1,365 1,182 28 (-31) mn for YTD• Y/y change in other financial items Net interest & other financial items 0 -27 -13 -74 also included SEK 30 (-) y/y non- Income before tax 681 672 1,352 1,107 cash financial gain from the change in value of the option element of the Net income from discontinued - 20 - 45 SEK 250 mn CDON Group operations convertible bond & a non-cash Total net income 479 522 969 822 financial gain of SEK 7 (0) mn Basic EPS from continuing following the new share issues by 6.84 7.27 14.19 11.49 operations CTC Media and the resulting dilution Total basic EPS 6.84 7.58 14.19 12.18 of MTG’s ownership in the company Financial Review16
  17. 17. Cash Flow• Change in working capital reflected the Q2 Q1 H1 H1 (SEK mn) 2011 2011 2011 2010 usual seasonality pattern and timing differences Cash flow from 528 547 989 860 operations• No investments in businesses during H1 2011, compared to SEK 136 mn Changes in working investment in Raduga TV in Q1 2010 & capital 178 -339 -162 -492 SEK 132 mn investment in Viasat Ukraine in Q2 2010 Net cash flow from 705 208 828 368• CAPEX = less than1% of Group net operations sales for the period Cash flow to/from -20 -152 -52 -336• Cash flow from/to financing activities investing activities primarily reflected SEK 498 (363) million of dividend payments to MTG Cash flow to/from -646 -239 -834 1 shareholders, & net loan reduction of financing activities SEK 74 (61) mn in Q2 Cash flow from discontinued operations - -122 - -207 – CDON Group Net change in cash & 40 -305 -58 -173 cash equivalents Financial Review17
  18. 18. Financial Position • SEK SEK 2,341 (3,650) mn of the Group’s 30 Jun 30 Jun available credit drawn down as at 30 Jun 2011 (SEK mn) 2011 2010 • Net debt of SEK 1,716 (3,185) mn, compared to net debt of SEK 1.863 mn as at 31 Mar 2011 Non-current assets 8,909 9,164 • SEK 4,682 (3,464) mn of available liquid funds (cash & undrawn facilities) Current assets 5,525 6,382 • SEK 1,940 mn book value of 38.2% shareholding in CTC Media had public equity Total assets 14,434 15,546 market value of SEK 8,100 mn at end of Jun 2011 Shareholders’ equity 6,833 5,986 Net debt / EBITDA Long-term liabilities 3,020 4,353 1.2 1.2 1.1 0.8 0.7 0.6 Current liabilities 4,581 5,207 Total equity & liabilities 14,434 15,546 Financial ReviewQ1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11 18
  19. 19. Summary• Record Q2 sales and operating profits, with stable margins despite investments in future growth• Performing well operationally & delivering on strategic objectives• Each broadcasting segment grew y/y at constant FX following audience share gains and net subscriber intake• Generation of substantial cash flow from Nordic operations• Geared to capitalise on recovery in the Emerging Markets when it comes• Significant financial firepower with which to invest further to drive Group future growth Summary19
  20. 20. For Further Information, please visit www.mtg.se or contact: MTG Investor Relations Tel: +46 73 699 29 91 / +44 7768 440 414 / +44 779 113 84 86 Email: investor.relations@mtg.se Contact information20

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