mtg q1 2012 presentation

1

Modern Times Group

MTG

First Quarter 2012

Financial Results

2 Q1 2

012 F

INA

NC

IAL R

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ULT

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3

First Quarter 2012

Record Q1 sales in an Investment Quarter

• Sales up 4% y/y at constant & reported FX to

SEK 3,259 (3,125) mn

• OPEX up 8% y/y at constant & reported FX to

SEK 2,919 (2,693) mn

• EBIT before associated company income of

SEK 341 (432) mn

• Total EBIT of SEK 542 (686) mn, including

SEK 201 (254) mn of associated company

income

• PTP of SEK 591 (671) mn

• Net income of SEK 454 (490) mn

• Basic EPS of SEK 6.68 (7.35)

• Receipt of SEK 52 (61) mn of dividends from

CTC Media

Q1 2

012 R

ES

ULT

S

SEK mn

* EBIT excluding associated income

3,125 3,259

432 341

0%

5%

10%

15%

20%

25%

30%

35%

40%

0

500

1,000

1,500

2,000

2,500

3,000

3,500

Q1 2011 Q1 2012

Revenue EBIT* EBIT margin

Opera

tin

g r

evie

w

5

Free-TV Scandinavia

Financial Highlights

• Sales of SEK 1,024 (1,023) mn

• Down 1% y/y in Q1 at constant FX

• OPEX up 14% y/y to SEK 866 (763) mn in Q1

• Up slightly less at constant FX

• Focused programming investments in each

Scandinavian country & low OPEX growth

in Q1

• EBIT down to SEK 158 (260) mn in Q1

• EBIT margin of 15%(25%)

Opera

tin

g r

evie

w

SEK mn

1,023 1,024

260

158

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

0

200

400

600

800

1,000

1,200

Q1 2011 Q1 2012

Revenue EBIT EBIT margin

6

Free-TV Scandinavia

Operating Highlights

Sweden

• Target audience share of 34.9% (33.8%) in Q1

• TV3 grew target CSOV both y/y and q/q

• TV8 & TV10 up both y/y and q/q

• Ongong overall work to enhance

programming schedules

• TV3 launched in 19 regions on 27 February

Norway

• Target audience share of 18.6% (22.0%)

• CSOV affected by increased competition &

performance of own productions

• Focus on improving both TV3 & Viasat4 &

changes in key personnel

Denmark

• Target audience share of 24.9% (25.4%)

• Q/Q development reflected improved

ratings for local productions & sports events

in Spring schedules

• TV3 CSOV up y/y and q/q & TV3+ and

TV3 PULS CSOV up q/q

Opera

tin

g r

evie

w

Commercial Audience Share (15-49)

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

Sweden Norway Denmark

7

Pay-TV Nordic


• Sales of SEK 1,249 (1,139) mn in Q1

• Up 9% y/y at constant FX

• OPEX of SEK 1,031 (924) mn in Q1

• Up slightly less at constant FX

• Ongoing investments in Viaplay; higher y/y

sports content costs & rebranding of Nordic

movie channel portfolio

• EBIT up 1% y/y to SEK 217 (215) mn in Q1

• Operating margin of 17% (19%)

Opera

tin

g r

evie

w

SEK mn

1,139 1,249

215 217

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

0

200

400

600

800

1,000

1,200

1,400

Q1 2011 Q1 2012


8

Pay-TV Nordic


• Premium subscriber base down by 19,000

subscribers net q/q in Q1

• Decline in virtual operator subscriber base

due to ending of contract with Norwegian

IPTV operator in January & restatement of

subscriber base of another Norwegian

operator

• Underlying third party subscriber base grew

in Q1 in line with expectations

• Premium ARPU up 9% y/y in Q1 to SEK 4,866

(4,445) & from SEK 4,791 in Q4 11

• Continued growth in penetration of value

added services

• Continued y/y growth in third party network

subscriber base

Opera

tin

g r

evie

w

Thousands

Thousands

Premium subscribers

Value added services

0

200

400

600

800

1,000

1,200

Satellite subscribers 3'rd party network subscribers

50

100

150

200

250

300

350

ViasatPlus HDTV Multi-room

9

Free-TV Emerging Markets


• Total sales os SEK 432 (420) mn in Q1


• OPEX down 6% y/Y in Q1

• Down less y/y at constant FX

• Total EBIT up 39 mn y/y to SEK 8 (-31) mn

• Q1 EBIT margin of 2%

• Baltic, Czech & Bulgarian sales of SEK 393

(371) mn in Q1

• Up 8% y/y at constant exchange rates

• Combined OPEX down 2% y/y in Q1

• Stable y/y at constant FX

• EBIT margin of 7% in Q1


Baltics, Czech Republic & Bulgaria

SEK mn

SEK mn

420 432

-31 8

-50

50

150

250

350

450

550

Q1 2011 Q1 2012

Revenue EBIT

371 393

-3 27

-25

25

75

125

175

225

275

325

375

425

475

Q1 2011 Q1 2012

Revenue EBIT

10



Baltics

• Sales up 2% y/y in Q1 at constant FX

• Increased pan-Baltic commercial target audience

share of 40.5% (39.9%)

• Increased combined TV ad market shares in each

of the Baltic countries in Q1

Czech Republic

• Sales up 16% y/y in Q1 at constant FX

• Continued significant y/y audience & advertising

market shares following continued investments in

programming schedules

Bulgaria

• Sales down 5% y/y at constant exchange rates in

Q1

• Decline continued to reflect overall

weakness in the TV ad market & lower y/y

pricing levels

• Combined CSOV up both y/y and q/q

Opera

tin

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Commercial Audience Share

10%

15%

20%

25%

30%

35%

40%

45%

50%

Estonia (15-49) Latvia (15-49)

Lithuania (15-49) Czech Republic (15-54)

Bulgaria (18-49)

11

Pay-TV Emerging Markets


• Sales of SEK 251 (215) mn in Q1


• Continued y/y subscriber intake in Ukraine,

Russia & Baltics

• Continued strong mini-pay growth

• OPEX up 5% y/y to SEK 217 (207) mn in Q1

• Up less at constant FX

• Ongoing investments in the satellite

platforms

• EBIT more than tripled to SEK 34 (7) mn in Q1

• Increased EBIT margin of 14% (3%)

Opera

tin

g r

evie

w

SEK mn

215

251

7

34

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

0

50

100

150

200

250

300

Q1 2011 Q1 2012


12

Pay-TV Emerging Markets


• 91,000 net new subscribers added y/y

• Subscriber base down net q/q due to

seasonal impact of high growth in Q1&

lower gross additions and increased

churn in Q1

• Wholesale mini-pay business subscriptions up

13% y/y to 66,012 million & up 3% q/q

Opera

tin

g r

evie

w

Satellite subscribers

Mini-pay TV subscriptions

Thousands

Thousands

0

100

200

300

400

500

600

40,000

50,000

60,000

70,000

80,000

Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012

Mini-pay TV subscriptions

13

Other Businesses

Highlights

• Comprises MTG’s Radio, Bet24 and Modern

Studios operations

• Sales of SEK 407 (400) mn in Q1


• Sales growth for Modern Studios

• Lower y/y sales for Radio operations &

Bet24

• Combined OPEX up 11% y/y to SEK 421 (380)

mn in Q1

• Investments in Modern Studios &

Norwegian radio operations

• Combined EBIT losses of SEK -14 (20) mn in Q1

• Agreement signed with Unibet to sell Bet24

operations

• Total cash consideration of approximately

EUR 13.5 mn

• Subject to regulatory approval & expected

completion before end of Q2 2012

Opera

tin

g r

evie

w

SEK mn

400 407

20 -14

-50

0

50

100

150

200

250

300

350

400

450

Q1 2011 Q1 2012

Revenue EBIT

14 Fin

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Income Statement

• Depreciation & amortisation charges

of SEK 28 (49) in Q1

• Net interest charges up y/y to

SEK -16 (-14) mn in Q1

• Y/Y change in other financial items

in included

• SEK 81 (4) mn of non-cash

financial gain from the change

in value of the option element

of the SEK 250 mn CDON

Group convertible bond

Fin

ancia

l R

evie

w

(SEK mn)

Q1

2012

Q1

2011

Net sales 3,259 3,125

EBIT before associated company

income 341 432

Associated company income 201 254

EBIT 542 686

Net interest & other financial items 49 -15

Income before tax 591 671

Net income 454 490

Basic EPS from continuing operations 6.68 7.35

Total basic EPS 6.66 7.29

16

Cash Flow

• Cash flow from operations included

receipt of SEK 52 (61) mn of dividend

payments from CTC Media in Q1

• Sale of MTG’s remaining shares in Metro

International S.A. to Investment AB

Kinnevik in Q1 for SEK 24 mn in cash

• CAPEX of SEK 23 (32) mn in Q1

= less than 1% of Group net sales

Fin

ancia

l R

evie

w

(SEK mn)

Q1

2012

Q1

2011

Cash flow from operations 334 462

Changes in working capital -269 -339

Net cash flow from operations 65 123

Cash flow used in investing

activities 1 -32

Cash flow used in financing

activities 54 -189

Net change in cash & cash

equivalents 120 -98

17

Financial Position

• Group total borrowing of SEK 1,603 (2,446) mn

as at 31 Mar 2012, compared to SEK 1,566 mn

as at 31 Dec 11

• Net debt of SEK 733 (1,863) mn as at 31 Mar

12, compared to SEK 797 mn as at 31 Dec 11

• SEK 1,869 (1,766) mn book value of 38.1%

shareholding in CTC Media had public equity

value of SEK 4,619 mn as at 31 Mar 12

Fin

ancia

l R

evie

w

(SEK mn)

31 Mar

2012

31 Mar

2011

Non-current assets 5,683 8,566

Current assets 5,785 5,339

Total assets 11,468 13,905

Shareholders’ equity 4,744 6,538

Long-term liabilities 2,220 3,054

Current liabilities 4,504 4,313

Total equity & liabilities 11,468 13,905

Net debt / EBITDA

1.2 1.2 1.1

0.8 0.7 0.6 0.7

0.3 0.3

18

Summary

• Record sales for a first quarter but lower profits due to peak cost increases in an

investment quarter for the Nordic operations

• Earlier and higher investments in Scandinavian free-TV Schedules & investments

in pay-TV content offering & new technologies

• Audience share gains in all but one Emerging free-TV territory & continued

subscriber intake for Emerging Markets pay-TV businesses

• Sales growth & improved profitability for both Free-TV and Pay-TV Emerging

Markets

• Focus on growth & sustainable long term value creation

• Strong balance sheet with increased dividend proposed to AGM & newly adopted

dividend policy

Sum

mary

19

For further information, please visit www.mtg.se or contact:

MTG Investor Relations

Tel: +44 7768 440 414 / +44 7590 098 188

Email: [email protected]

Conta

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info

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mtg q1 2012 presentation

Investor Relations

q1 cash flow

constant

reported fx

ctc media

sek mn

pay

free