Q42013 presentation final

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MODERN TIMES GROUP

Q4 2013 FINANCIAL RESULTS

“STRONGER PRODUCTS. HIGHER GROWTH”

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 & segment sales growing again

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

Q4 2013 – HIGHLIGHTS

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GROUP PERFORMANCE

INVESTMENTS DRIVING GROWTH

SALES GROWTH (Y-O-Y) EBIT (SEK MN) AND EBIT MARGIN (%)

-2%0%2%4%6%8%

10%12%14%16%

Q1 2012

Q2 2012

Q3 2012

Q4 2012

Q1 2013

Q2 2013

Q3 2013

Q4 2013

Sales growth at constant fx Organic sales growth

0

5

10

15

20

0

100

200

300

400

500

600

2012Q1

2012Q2

2012Q3

2012Q4

2013Q1

2013Q2

2013Q3

2013Q4

EBIT excl associated income & one-off items EBIT margin

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FREE-TV SCANDINAVIA

AUDIENCE SHARE GAINS & GROWTH RETURN

Sales up 1% at constant FX

Growth for 2nd consecutive quarter

Swedish & Danish TV ad markets estimated to have been stable with

low levels of growth in Norway

Audience share gains in all three markets

Denmark - highest Q4 CSOV since 2000

Sweden - up every month since launch of Fall schedule

Norway - boosted by launch of 3rd channel (TV6) at end of November

Healthy margin with continued investments

OpEx up 5% at constant FX - below original expectation due to later

launch of TV6 & lower level of required programming investments

Exclusive coverage in Sweden of Winter Olympics will boost sales &

adversely impact Q1 2014 earnings

27% of Group sales 2013 2012

Oct-Dec Oct-Dec

Sales (SEKm) 1,149 1,147

Growth (at constant FX) 1% -6%

EBIT (SEKm) 214 250

EBIT margin 18.6% 21.8%

CSOV (15-49)

Sweden 31.8% 31.5%

Norway 16.9% 16.7%

Denmark 25.2% 20.6%

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PAY-TV NORDIC

SUBSCRIBER GROWTH + RISING PRICES


Driven by Viaplay & satellite premium ARPU & TV3 Sport channels

Subscriber Growth + Rising Prices

3rd party subscriber volume growth (q-o-q) more than offsets

satellite decline for first time in 2 years

Premium satellite ARPU continued to rise following price increases

Continued strong Viaplay subscriber intake + price increases

Margin within the expected range

Continue to expect higher EBIT margin for FY14

Exclusive coverage in Sweden of Winter Olympics will boost sales

& adversely impact Q1 2014 earnings


Oct-Dec Oct-Dec

Sales (SEKm) 1,368 1,286

Growth (at constant FX) 7% 3%

EBIT (SEKm) 165 198


Premium subs ('000) 977 1,019

o/w satellite ('000) 559 592

o/w third party ('000) 418 427

Satellite premium ARPU (SEK) 5,075 4,988


Driven by sales co-operations + good underlying growth + M&A

Lithuanian, Estonian, Bulgarian & Ghanaian TV ad markets estimated

to have grown; Latvian, Czech & Hungarian markets estimated to

have declined

Record high audience shares in Bulgaria & Baltics

37% Bulgarian media house CSOV – a new record

52% Pan-Baltic CSOV – a new record

Czech Republic media house CSOV down due to Prima Family

EBIT impacted by higher investments

Profitability impacted by programming investments and TV1

(Tanzania)

Tough comps, intense competition & soft markets in 2014. Q1 will be

impacted by the broadcasting of the Olympics in the Baltics.

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FREE-TV EMERGING MARKETS

INVESTING IN MOMENTUM


Oct-Dec Oct-Dec

Sales (SEKm) 784 675


EBIT (SEKm) 83 104


CSOV

Pan-Baltic (15-49) 51.8% 48.5%

Czech Republic (15-54) 34.1% 39.1%

Bulgaria (18-49) 36.9% 34.1%


Driven by wholesale subscription, satellite subscriber volume growth,

ad sales in Russia and some positive timing effects

Continued subscription/subscriber growth

Addition of >8m mini-pay subscriptions in 2013 and almost 1m in Q4

Addition of 24k satellite subscribers in Q4 following growth in Baltics,

Russia & Ukraine – base stable y-o-y

Higher profits – no change in FY14 expectations

Q4 EBIT boosted by seasonal impact of Russian ad sales, as well as

~SEK 15m positive one-off items

No change to the expectation for rising profitability levels in 2014

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PAY-TV EMERGING MARKETS

OUT-PERFORMING EXPECTATIONS


Oct-Dec Oct-Dec



EBIT (SEKm) 51 5


Subscribers / subscriptions ('000)

Satellite 581 584

Mini-pay wholesale 92,223 83,950

Organic + M&A led sales growth

13% organic sales growth driven by MTG Studios. Radio sales

stable in Norway & down in Sweden

M&A growth from acquisition & consolidation of Nice Entertainment

(Nov), DRG & Novemberfilm (Jun)

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

MTG Studios now a scale player

The leading Nordic content production company

With a leading global distribution arm in DRG

And an Emerging Markets specialist in Paprika Latino

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MTG STUDIOS, MTGX, RADIO

STUDIOS DRIVES GROWTH


Oct-Dec Oct-Dec


Growth (at constant FX) 89% -29%

Growth (organic) 13% n/a

EBIT (SEKm) 11 0


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INCOME STATEMENT

INVESTMENTS DELIVER GROWTH


Negative FX impact of ~ 1 percentage point

6% organic growth

Acquisitions add ~ 8 percentage points of growth

11% EBIT margin (excl. associates and non-recurring items)

OpEx up 18% at constant FX & 10% organically

Driven by previously announced investments + acquisitions

SEK 147m non-cash asset impairment charge related to

Raduga joint venture

The Raduga revenues that MTG consolidated represented less

than 0.5% of Group full year 2013 net sales.

Effective tax rate of 30% for FY13

Expect FY14 rate to be in 25-30% range

Q4 in brief 2013 2012

Oct-Dec Oct-Dec

Sales (SEKm) 4,083 3,620

Sales growth (at constant FX) 14% 0%

Organic growth (at constant FX) 6% 2%

EBIT excl. associates & non-recurring items 457 514

Margin excl. associates & non-recurring items 11.2% 14.2%

Total EBIT excl. non-recurring items 564 476

Non-recurring items -147 -

Total EBIT margin excl. one-offs 417 476

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CASH FLOW

HIGH CASH CONVERSION LEVELS

Healthy cash flow generation

SEK 1.3bn of cash flow from operations

74% of earnings converted into operating cash flow & 65%

when including increase in WC from record low levels

SEK 246m cash dividend payments received from CTCM

Investing to drive future growth

Investments in shares of SEK 905m to drive growth

Higher CapEx of SEK 319m reflects investments in new play-

out centre in the UK, Zitius, MTGx and Viaplay

Zitius sale proceeds to come in 2014

(SEKm) 2013 2012

Jan-Dec Jan-Dec

Cash flow from operations 1,340 1,655

Changes in working capital -120 261

Net cash flow from operations 1,220 1,915

Cash flow used in investing activities -1,224 -351

Cash flow used in financing activities 96 -1,274

Net change in cash & cash equivalents 92 291

FINANCIAL POSITION

RECORD HIGH PAY-OUT RATIO

Strong financial position

Net debt to trailing twelve month EBITDA ratio of just

0.5 times at year end

SEK 5.6 bn of available liquid funds

Recently refinanced on attractive terms

SEK 5.4 bn market value of CTC Media stake as at YE

SEK 1.9 bn book value of 37.9% CTC Media stake

Board proposes annual cash dividend of SEK 10.50

Record pay-out ratio of 56% excl. non-recurring items

Continuing to balance investments in future growth with

shareholder returns

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Net debt / Trailing 12 month EBITDA

1.2 1.2 1.1

0.8 0.7

0.6 0.7

0.3 0.3 0.3 0.3

0.0 0.0

0.1 0.2

0.5

Q1

10

Q2

10

Q3

10

Q4

10

Q1

11

Q2

11

Q3

11

Q4

11

Q1

12

Q2

12

Q3

12

Q4

12

Q1

13

Q2

13

Q3

13

Q4

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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

Q4 2013 – SUMMARY

STRONGER PRODUCTS. HIGHER GROWTH

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MTG INVESTOR RELATIONS

FOR FURTHER INFORMATION

VISIT WWW.MTG.SE

TEL: +46 (0) 73 699 2714

EMAIL: [email protected]

http://www.mtg.se/

Q42013 presentation final

Investor Relations

Transcript of Q42013 presentation final