2. Mathias
Hermansson
Chief Financial
Officer
Born 1972
Joined MTG in 1999
What I love: The feeling of WINNING
What I hate: Surprises, especially financial
and negative…
Favourite quote: “Cash is Cash – Everything
else is just an opinion.”
1.
3. Value creation the MTG way
Revenues & EBIT Return on capital employed
SEKm
16,000 30%
14,000 27% 34%
24% 31%
12,000 29% 29%
21% 25%
10,000 18% 21% 21%
8,000 15%
12% 15% 15%
6,000
9%
4,000
6% 6%
2,000 3%
0 0%
Revenues EBIT EBIT-margin
Excluding non-recurring items
Total EBIT excluding discontinued operations and one-offs
3
5. Innovation driving growth
Made To Grow... organically
Launch of the Viaplay set-top-box in Sweden…
Launch of online streaming OTT offering Viaplay in the Nordics
Launch of TV10 in Sweden, 3D TV introduced in the Nordics
Launch of several new channels (Viasat Hockey, TV3 PULS, Prima COOL)
Virtual IPTV Operator invented, Launch of free-TV in Ghana (W Africa)
Launch of the first DTH pay-TV platform in Ukraine, viasatondemand launched
Launch of TV6 in Sweden, further expansion of the mini-pay business in CEE
Launch of the first IPTV services in Europe, Launch of Viasat PVR
Viasat DTH platform launched in the Baltics
The mini-pay wholesale channel business is launched in Eastern Europe
Secondary channels Tango TV launched in Lithuania
5
6. Strict cost control
Underlying strict cost control, while balancing
organic investments to drive growth
(%)
Y-o-Y growth at constant FX rate
16
14
12
• <0.5% annual cost
10
increase last three
8 years when
excluding content
6
costs & variable
4 costs
2
0
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
'09 '09 '09 '09 '10 '10 '10 '10 '11 '11 '11 '11 '12
Sales Costs
6
7. Cash is king
Net operating cash flow (SEKm) Dividends received from CTCM
2,500 100%
(SEKm)
140
2,000 80%
120
100
1,500 60%
80
1,000 40% 60
40
500 20%
20
0 0% 0
Net operating cash flow % of EBITDA converted
7
8. Managing working capital down
Working capital development
(% of revenues)
10%
• Significant improvements
in inventory management
8%
• Tighter management of
6% supplier payments terms
and collection routines
4%
• Seasonal fluctuations
within calendar year
2%
0%
8
9. Asset light business model
Capex development (SEKm)
400 0.4%
350 0.4% • Capex has historically
300 0.3% represented a low
percentage of revenues
250 0.3%
and this is expected to
200 0.2% continue
150 0.2%
100 0.1%
50 0.1%
0 0.0%
Capex % of sales
9
10. Deleveraging at the same time
(SEKm)
Net Debt
5,000
4,000
• Net debt below SEK 750
3,000 million as at 31 March
2012
2,000
1,000 • SEK 6.5 billion revolving
credit facility matures in
0
2015
Q1 '09
Q4 '09
Q3 '10
Q2 '09
Q3 '09
Q1 '10
Q2 '10
Q4 '10
Q1 '11
Q2 '11
Q3 '11
Q4 '11
Q1 '12
(SEKm) Available Liquid Funds • More than SEK 5.5 billion
6,000 of liquid funds available
within less than a week
5,000
4,000
3,000
2,000
1,000
0
Q1 '11
Q1 '09
Q2 '09
Q3 '09
Q4 '09
Q1 '10
Q2 '10
Q3 '10
Q4 '10
Q2 '11
Q3 '11
Q4 '11
Q1 '12
10
11. While creating greater flexibility
Net debt / EBITDA Net debt / EBITDA
(2011)
0.2
M6 -1,0
0.1 CTC Media -0,5
Mediaset Esp. -0,1
0.1 ITV -0,1
TF1 0,1
0.1 MTG 0,3
0.1 Antena 3 0,6
BskyB 0,7
0.1 ProSiebenSat.1 2,1
Mediaset 2,4
0.0 TVN 4,0
0.0 CME 6,8
Average 1,3
0.0
EBITDA excluding CDON Group, DTV, TV Shop and non-recurring items, inlcluding Source: Broker research, Factset
associated income
11
12. For investing in growth &
returning cash to shareholders
• Primary focus is on growth and reinvesting cash flow into operations
+ M&A
• Balanced with TSR commitment – reflected in newly adopted policy to
distribute at least 30% of recurring net profit as annual ordinary
dividend
Cash distribution
(SEK)
0.40
Buybacks (value per share)
0.35
CDON spin-off
0.30
Extraordinary dividend per
0.25
share
0.20 Ordinary dividend per share
0.15 Net cash flow per share
0.10
EPS adj (excluding one-offs)
0.05
30% of EPS adj (excluding
0.00 one-offs)
12 2006 2007 2008 2009 2010 2011
13. Allocating capital to structurally
growing regions
Cash flows from Scandinavia invested into Emerging
Markets
2000: Acquisition of 95% of Hungarian operation
2001: Acquisition of 75% of DTV in Russia
2002: Acquisition of 36% of CTC Media in Russia
2005: Acquisition of 50% of Prima TV in Czech Republic
2006: Acquisition of 100% of Slovenian operation
2007: Acquisition of 50% of Diema channels in Bulgaria
2008: Acquisition of 50% of pay-TV platform in Ukraine
2008: Acquisition of 100% of Nova TV in Bulgaria
2010: Acquisition of 50% of pay-TV platform in Russia
2010: Acquisition of additional 35% of Viasat Ukraine
2012: Acquisition of 100% of LNT free-TV group in Latvia
13
14. And the show must go on
M&A team of 4 professionals hired from Nordic & international
investment banks
• Focus on market consolidation opportunities across all existing
markets, acquisitions in additional CEE & African territories and
content production businesses.
Key investment criteria
• Broadcasting or broadcasting related assets X
• Markets / companies with structural growth opportunities X
• Synergies with existing operations X
• Strong incremental profitability model X
• Ability to grow with the flow X
• ROI hurdle rates
• Contrarian & Opportunistic strategy – now is the time
• Learn from previous successes & mistakes
14
15. So, what does the future hold?
Key focus is long term growth and value creation
…the MTG way
Strong cash generation to continue
• Continued low working capital and capex as percentage of sales
• Expected total CTC Media cash dividends of USD 80m during 2012
Commitment to continue to invest in future growth
• Re-investment in current businesses + new start-ups to ‘grow with the flow’
• Explore consolidation, new market and content production M&A opportunities
Commitment to deliver shareholder returns
• Dividend policy to distribute at least 30% of recurring net profit to shareholders
• Buy-back mandate in place for up to 10% of shares
15
