May 2014 CTC Media, Inc. Investor Presentation
Aug 20, 2015
May 2014
CTC Media, Inc.
Investor Presentation
A Leading Independent Broadcasting and Content Company in Russia
From Private TV Network to Public Media Holding
1989 1994 2002 2005 2006 2008 2009 2010 2011 2012 2013 2014
CTC Media was
founded as Story
First
Communications
Launch of CTC
Network
Modern Times Group
became a shareholder
of CTC Media
Launch of
Domashny Network
Initial Public Offering
on NASDAQ
Acquisition of DTV
(rebranded to Peretz
in 2011)
Acquisition of
Channel 31 in
Kazakhstan and a TV
company in Moldova
Launch of CTC-
international in
Kazakhstan, Kyrgyzstan,
Armenia, Georgia,
Azerbaijan, Thailand and
uplink to HOT BIRD
CTC and Domashny
received digital licenses
Launch of CTC-
international in
Germany, North America
and the Baltics
Telcrest Investments
Limited acquired a 25%
stake in СTС Media
from Alfa Group
Launch of Domashniy.ru
women’s portal Launch of CTC-
international in
USA
Launch of CTC-
international in
Israel
Establishment of
CTC Media’s
internal advertising
sales house
‘Everest Sales’
Launch of
Videomore.ru
online content
portal
Development of in-
house creative
production center
Launch of Peretz
International in
Belarus
Launch of CTC
Love Channel on
cable and satellite
Launch of Peretz
International in
Kyrgystan
Launch of Sweet
me brand together
with KupiVip
2
TRANSMEDIA
CTC-INTERNATIONAL (PAY-TV)
AD SALES
FREE-TO-AIR (CIS)
We Fully Capture the Value Chain by Being Integrated TV Broadcaster
BROADCASTING ( RUSSIA)
Free-to-air
TV ad maket growth1
International version of CTC channel
Mobile, smart TV, second screen, transmedia projects
Ctc.ru, Domashniy.ru, Peretz.ru
Online video portal Videomore.ru
CTC – target audience All 10-45
Domashny – target audience Females 25-59
Peretz – target audience All 25-49
International version of PERETZ channel
Kazakhstan Channel 31
Moldova СTС Dixi
Internal advertising sales house Everest
CTC Love – target audience All 11-34
3
Combination of Growth, Profitability and Dividend Yield
GROWTH EFFICIENCY /
PROFITABILITY
RETURN CASH
TO SHAREHOLDERS
Operating in Europe’s third
largest1
Forecast for Russian TV
advertising market to grow at
lower end of 5-8% range in
2014, CTC Media Russian
advertising revenue in line with
the market
OIBDA margin of 32.5% in 2013,
well above European TV
broadcasters average
High Group power ratio of 1.5x
compared to rivals due to attractive
audience profiles2
Strong cash flow generation and
net cash position
Over 50% cash dividend payout
More than 5% dividend yield in
2011, 2012 and 2013
Current dividend yield >7%, the
highest among European media
companies
+ +
Source: (1) Zenith Optimedia, April 2014 estimates
(2) Kommersant newspaper, 16 April 2013 (FY 2012 results). Power ratio = national TV ad revenue share / audience share in “all 4+” age group. Power ratio demonstrates relative effectiveness of audience monetization.
4
We Operate in Attractive Markets
Sources: Video International, Russian Association of Communications Agencies, ZenithOptimedia, CIA World Factbook, Rosstat, Russkiy Mir Foundation
Note: (*) All TV Ad Markets figures are net of VAT
Kazakhstan Population = 17.1 million
2012 TV Ad Market = US$ 128.6 million*
Russian-speaking population = 12.3 million
Kyrgyzstan Russian-speaking population = 3.6 million North America
Russian-speaking
population = 3.5 million
Germany Russian-speaking
population = 6 million
Russia Population = 143.7 million
2013 TV Ad Market = US$ 4.9 billion*
Israel Russian-speaking
population = 1.5 million
Moldova Population = 3.6 million
2012 TV Ad Market = US$ 17.1 million*
Baltic states Russian-speaking
population = 4 million
Since February 2012
CTC-International an
is available on the HOT
BIRDTM 8 satellite
(W/E Europe, North Africa,
Middle East and Central Asia
coverage)
Thailand Russian-speaking tourists = 1.3 million (2012)
Armenia, Georgia, Azerbaijan Russian-speaking population=10.4 mln
Belarus Russian-speaking population = 7 million
5
26.4
14.8 14.413.0
8.5
3.7
Gazprom-Media СTС Media VGTRK (Rossiya) Channel One National Media Group UTV Russia Holding
Q1 2014
We Are the Largest Independent FTA-Broadcaster in Russia with Premium Audiences
Combined audience
shares, %
(all 10-45 demographic)
Maintained
2nd place
27.4
15.3
13.112.1
9.5
4.1
Gazprom-Media СTС Media VGTRK (Rossiya) Channel One National Media Group UTV Russia Holding
Q1 20136
12.112.5
11.3
9.1 9.2
5.2
4.3
3.02.2 2.3
1.3
2.6
0.9
1.8 1.8 1.5 1.4 1.50.9
18.5
13.0
11.610.8
9.38.5
4.7
3.83.0
2.72.2 2.0 2.0 1.9 1.9 1.8 1.7
1.4 1.3
0.6
19.3
ChannelOne
TNT CTC Russia 1 NTV Ren TV Channel 5 TV-3 Russia 2 Peretz Pyatniza *** Disney * Russia24
Domashny TV Centr U ** Zvezda 2X2 RussiaK
Other
Q1 2013
Q1 2014
Growing Audience Shares In “All 10-45” Most Commercially Attractive Demographic
Audience shares1, %
(1) Source: TNS Russia, CTC Media’s Research Department
(2) Includes audience shares of regional and non-FTA channels
(*) Operated under Semerka brand before 31 December, 2011
(**) Operated under Muz-TV brand before 1 September, 2012
2
(***) Operated under MTV brand before 1 June, 20123
Channels broadcasting Olympics were up
7
Growth Company Operating in a Dynamic Market
Digitalization in Russia Is on Its Way
First multiplex Second multiplex Third multiplex
Currently only Russian cities with more than 100,000 residents are measured by TNS (~50% of the total population
of Russia)
With full rollout of digital transition Russia will have 98% all-Russia penetration, which means almost double the
number of audience covered
Governmental authorities indicate that estimated payments in 2014 will be approximately $25 million for the CTC
and Domashny channels in aggregate, depending on the actual rollout
More clarity expected by the
end of 2014
9
USA Japan China Brazil UK Germany Russia
US
$ b
ln
Russian TV Ad Market Has Significant Potential for Further Development…
Russian TV ad market was #7 in the world and #3
in Europe in 20131 and is expected to maintain its
position by 2016
Free-to-air TV ad market growth1
RU
B
bln
Sources: (1) Zenith Optimedia, as of April 2014, Company’s estimates Note: All TV Ad Markets figures are net of VAT
64.3
22.5
16.4
11.8
5.4 5.4
5.0
42
11795
109129
140152
96
257
186
219
263
298
328
2004 2008 2009 2010 2011 2012 2013TV Ad Market Total Ad Market
10
1.4
1.7
0.9
1.2
0.90.9
0.80.7
0.6 0.6 0.6
1.6 1.6
1.0 1.01.0
0.8
0.7
0.5 0.5 0.5
0.4
Slo
ve
nia
Bu
lga
ria
Au
str
ia
US
A
Be
lgiu
m
UK
Ge
rma
ny
CE
E A
ve
rag
e
Russia
Ukra
ine
Po
lan
d
2008 2013
13% 16% 18%10%
17%12% 16% 13%
8%
18%
1% 5%9%
66% 63% 61%
66%
38%42%
23%20%
21%7%
23% 16% 3%
Consumer loans / GDP Mortgages / GDP
…Due to Relatively Low Ad Spend as % of GDP and Underleveraged Consumer
Ad spend as % of GDP¹
Sources: (1) ZenithOptimedia, Company’s estimates
(2) National Central Banks
Consumer and mortgage loans as % of GDP 2
11
TV is the only medium with truly national reach
Important social and cultural platform
More free-to-air networks than in other countries
High quality free-to-air content offering
TV Is the Most Attractive Advertising Medium in Russia
Ad spend in Russia by media segment1 (%)
FY 2012 cost per thousand in Russia (US$)²
FY 2012 TV cost per thousand (US$)²
Sources: (1) Russian Association of Communication Agencies, Video International
(2) Initiative Media
2.0
4.1
16.4
19.8
29.1
Russia
Central & Eastern Europe
Asia Pacific
Western Europe
North America
2.0
3.9
5.8
5.6
6.3
TV
Radio
Internet
Newspapers
Magazines
43%
1%
31%
18%
6%
0.4%
48%
22%
11%12%
5%2%
48%
30%
6%
10%
5%2%
TV Internet Press Outdoor Radio Other
2004 2013 2018F
12
232226
246 243 243
222
249251
133142
134
188210
170 169
166
5 613
2339
47
5866
4537
46 5144 40
42 41
2006 2007 2008 2009 2010 2011 2012 2013
TV
Radio
Internet
Other
Internet Is Growing Not at the Expense of TV Usage
Source: TNS Gallup Media, Russia
* Change in TNS Measurement panel in 2012 increase proportion of 2+ Tv-sets per household
TV Usage (Minutes per day, All 16+)
Min
ute
s p
er
da
y
*
But in “All 10-45” demographic
TV viewership was down 4%
13
We Continue to Deliver Strong Top and Bottom-line Growth…
Notes: (*) OIBDA is defined as operating income before depreciation and amortization (exclusive of amortization of programming and sublicensing rights. OIBDA margin is defined as OIBDA divided by total operating revenues. Both OIBDA and OIBDA margin
are non-GAAP financial measures (see reconciliations on page 44)
(**) 2008 OIBDA and OIBDA margin are adjusted to exclude a $232.7 million charge arising from the impairment of the intangible assets of DTV Group in Russia, Channel 31 in Kazakhstan and a broadcasting group in Moldova; 2009 OIBDA and
OIBDA margin are adjusted to exclude an $18.7 million charge arising from the impairment of the broadcasting licenses in Russia and a $28.6 million stock-based compensation expense recognized in conjunction with the previously announced
settlement by CTC Media of litigation brought by it against its former CEO; 2011 OIBDA and OIBDA margin are adjusted to exclude a $106.4 million charge arising from the impairment of several regional broadcasting licenses and the Peretz Network
goodwill; 2011 OIBDA and OIBDA margin are adjusted to $82.5 million non-recurring charge arising from the impairment of analog broadcasting licenses; 2013 OIBDA and OIBDA margin are adjusted to $29 million charge arising from the impairment of the
Company’s production unit in the fourth quarter 2013 (see reconciliations on page 42-43)
(***) Comparable-basis operating revenues are non-GAAP financial measures provided in order to facilitate period-to-period comparisons of CTC Media’s results following the implementation of the new model of advertising sales starting from 2011 (see
reconciliations on page 44)
(****) Following companies are included in European peers average OIBDA margin calculations: CME, TVN, S.A. Modern Times Group, Antena3, ITV plc, Metropole Television, Mediaset, ProSiebenSat, Mediaset Espana, TF1
US
$ m
ln
US
$ m
ln
181
273
427
532
730
574
680
766805
832
2004 2005 2006 2007 2008** 2009** 2010 2011** 2012** 2013**
(Comparable-basis) total operating revenues***
71
104
174
220
280
211221
247256
271
39%38%
41%
41%38%
37%
32% 32% 32% 33%
22%
26% 26% 27%
21%16%
21% 20% 16%21%
2004 2005 2006 2007 2008** 2009** 2010 2011** 2012** 2013**
OIBDA* OIBDA margin*, % Peers average OIBDA margin****,%
14
…and to Diversify Our Lines of Business
2004
Russian FTA
Broadcasting
100%
Sublicensing
0.2% Q1 2014
Russian FTA
Broadcasting
96%
71% 15%
10%
Channel 31
2.0%
Digital Media
0.8%
CTC-
International
0.5%
15
10%
15%
20%
25%
30%
35%
40%
45%
50%
55%
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Q1 2014
Fragmentation of Russian TV Market Presents Opportunity for Niche Channels Growth
Audience shares, all 10-45 demographic
Top 3 state-controlled channels
1st tier channels
2nd tier channels
Notes: top 3 state-controlled channels: Channel One, Rossiya 1, NTV; 1st tier channels: CTC, TNT, Ren-TV;
2nd tier channels: TV-3, Domashny, Peretz, Rossiya K, Channel 5, Rossiya 2, Euronews, Zvezda, Pyatniza, Rossiya 24, Ю, 2x2, TV Center, Disney, RU TV
Non-FTA and regional channels
Growth due to Olympic
games broadcasting
16
25% 47%
67%
29% 25%
59% Opening Closing
Olympic Games 2014 Impact on Russian TV Viewing
Winter Olympic Games Opening and Closing Ceremonies Audience Shares 2006-2014 (all 10-45)
Total TV Viewing Change in February vs. January
-6% -7%
3%
-5% -9%
1%
-6% -9%
1%
All 10-45 All 25-49 F 25-59
CTC Media audience share reduction was in line with other channels;
Inventory partially compensated by viewership increase during Olympics which is monetized
Impact of Sochi Olympics on channels’ audience share*
* Top-6 channels in “All 10-45” demographic; Domashny and Peretz in their target demographic
11% 8%
12% 11% 10%
5% 3.0% 2.8%
16% 13%
10% 9% 8% 4% 3.2%
2.1%
Channel 1 Russia 1 TNT CTC NTV Ren TV Domashny Peretz
Four weeks prior 7-23 February
17
CTC Improves Its Target Audience Profile in Commercially Attractive Demographic
Sources: TNS Russia
18
CTC Has a Strong Viewership Position
Ship
First season (13 January – 24 February
2014) – 13.8%
13.013.7 13.4
12.111.0 11.3
2008 2009 2010 2011 2012 2013
Audience share in all 10-45 demographic, %
#3 #4 #2 #3 #3
11.3 11.6 11.610.9 10.8
Q1'13 Q2'13 Q3'13 Q4'13 Q1'14
Kitchen
Third season (3 March – 3 April 2014) –
21.9%
Posledniy iz Magikyan
Second season (7 April – 24 April 2014) –
12.4%
19
Domashny Improves Affinity in Its Target Demographic
Sources: TNS Russia 20
Domashny Has Been Growing Audience Share Since Its Launch in 2005
Audience share in women 25-59 demographic, %
Foreign series
Reality & Lifestyle
Comedy
Russian series
1.51.7
2.42.8 2.8
3.2 3.23.6 3.5
2005 2006 2007 2008 2009 2010 2011 2012 2013
3.0
3.53.9
3.5
3.1
Q1'13 Q2'13 Q3'13 Q4'13 Q1'14
Domashny is up year-on-year despite Olympics in
February due to purposeful restructuring of
programming grid
21
Peretz Improves Audience Profile In Commercially Attractive Young Adults Demographics
Sources: TNS Russia 22
2.5
2.3 2.3 2.32.4
Q1'13 Q2'13 Q3'13 Q4'13 Q1'14
Peretz Launched a New Programming Grid Starting from April
Note:(1) in Peretz target demographic All 25-49
Audience share in all 25-49 demographic, %
2.02.1 2.1
2.7
2.4
2009 2010 2011 2012 2013
#12 #11 #10
23
Stable Consumer Goods Client Base with Large Multi-National and Local Advertisers
Ad spending on CTC Media’s Russian channels by category
■ Vast majority of CTC Media’s Russian advertisers are basic
consumer goods focused
■ CTC Media’s advertisers’ budgets split:
80% multinationals, 20% local companies
■ 37% of ad revenue** came from top 10 clients in Q1 2014
Notes: (*) National advertising sales for CTC, Domashny and Peretz Networks
(**) Total Russian advertising sales for CTC, Domashny and Peretz Channels
* 1Q 2013 1Q 2014
1 Food and beverages 26% 24%
2 Pharmaceuticals and vitamins 20% 22%
3 Cosmetics and personal care products 14% 17%
4 Other goods 19% 16%
5 Telecoms 5% 7%
6 Retail 3% 4%
7 Auto 4% 3%
8 Appliances 4% 3%
9 Detergents 4% 3%
10 Finance 1% 1%
11 Beer 0% 0%
24
Developing in Attractive CIS, International and Transmedia Markets
10.011.9
16.9
23.6
25.8
FY 2009 FY 2010 FY 2011 FY 2012 FY 2013
Revenue OIBDA margin
Strong Market Positions in Kazakhstan
Channel 31, Kazakhstan (all 6-54 demographics)* Significant growth in Kazakhstan revenue and OIBDA margin
US
$ m
ln
Source: (*) TNS Central Asia
17.4% 21.8%
30.4%
16.2%
Power ratio up to 1.2x from 1.0x
31.0% 11.6% 11.2%
15.2% 14.7%
13.2%
11%12%
14%
17%
18%
FY 2009 FY 2010 FY 2011 FY 2012 FY 2013
Target audience share Market share
24.3
17.0
13.4
9.2
4.7
6.9
9.6
3.7
1.73.1
6.2
17.6
14.1
11.7
10.2
8.6 8.57.5
5.1
3.3 3.2
7.4
Channel 1 KTK Channel 31 NTK Astana Kazakhstan Channel 7 Habar Mir Habar 2 Other
Q1 2013
Q1 2014
#3 among Top-10 Kazakh channels and 5%
revenue growth, despite audience share
decline
26
Plus We Continue to Expand Internationally…
Thailand July 2012 – Thai Media Export cable network
Armenia
Georgia
Azerbaijan
May 2012 – Caucasus cable networks 10.4 mln
Kyrgyzstan April 2012 – Europe-Asia cable and satellite network 2.5 mln
Europe
North Africa Middle East
Central Asia
February 2012 – uplink service HOT BIRDTM
Kazakhstan February 2012 – Digital TV; Icon TV 12.3 mln
Baltic States October 2011 – Viasat Broadcasting 4 mln
Germany March 2011 – Kartina TV IPTV 6 mln
Israel June 2011 – Hot; Yes 1.5 mln
North America
December 2009 – Dish
May 2011 – Time Warner; RMG
October 2011 – Cablevision
2013 - Comcast 3.5 mln
Increasing CTC Media’s international brand awareness & value through CTC-international and
Peretz-International
Total Russian-speaking population 47.2 mln
Russian-speaking
population
Belarus October 2013 – Beltelecom (Zala), MTIS, Cosmos-TV cable networks 7 mln
27
…and Enter New Platforms to Be Wherever Our Viewers Are
28
Strong and Flexible Financial Position
Q1 2014 Financial Highlights
2013 2014 in USD in RUB
Total operating revenues 195,287 186,247 -5% 10%
Total operating expenses (153,103) (138,108) -10% 4%
OIBDA 50,649 55,971 11% 28%
OIBDA margin 25.9% 30.1%
Net income/(loss) attributable to CTC
Media, Inc. stockholders 28,588 31,216 9% 27%
Diluted earnings per share $0.18 $0.20 11%
(US$ 000’s except per share data)
Three Months
Ended March 31, Change
30
Q1 2014 Balance Sheet and Cash Flow Highlights
Consolidated Balance Sheet Highlights Consolidated Cash Flow Highlights
Notes: (1) Working capital = current assets - current liabilities
(2) Net cash position = cash and cash equivalents + short-term investments - total debt
(3) Free cash flow = cash flow from operating activities - acquisitions of property and equipment and intangible assets
(US$ mln)Three months ended
March 31, 2013
Three months ended
March 31, 2014
Cash at beginning of period 55.2 30.6
Net cash provided by operating activities -12.9 32.4
including acquisition of progr. and sublic. rights (109.0) (84.7)
Net cash used in investing activities (1.4) 3.5
including CapEx (1.1) (1.0)
including receipts from/(investments in) deposits (0.3) (4.5)
Net cash used in financing activities (24.9) (27.4)
Cash at end of period 15.4 37.7
CapEx (1.1) (1.0)
CapEx as % of total revenue 0.6% 0.5%
Free cash flow3 -14.0 31.4
(US$ mln)As of December 31,
2013
As of March 31,
2014
Cash and cash equivalents 30.6 37.7
Short-term investments 180.3 160.7
Total assets 971.0 904.5
including goodwill 135.3 124.1
including broadcasting licenses 59.7 51.3
including programming rights 294.0 282.0
Working capital1 311.9 282.4
Stockholders’ equity 734.1 674.4
Net cash position2207.5 195.2
31
36%
33%
27% 27% 27%29%
32%
2007 2008 2009 2010 2011 2012 2013
High Levels of Cash Conversion and Return on Capital Employed
2007-2013
average
ROCE: 30%
% of OIBDA Converted to Operating Cash Flow Return on Capital Employed*
Note: (*) ROCE excludes one-off non-cash asset impairment charges recognized in 2008, 2009, 2011, 2012 and 2013
US
$ m
ln
158
186
133
186
116
158
187
72%66% 63%
84%
47%
62%69%
0
20
40
60
80
100
120
140
160
180
200
2007 2008 2009 2010 2011 2012 2013
Operating Cash Flow % of OIBDA converted
32
Strong Management Team
Yuliana Slashcheva
Chief Executive Officer • Joined CTC Media in 2013
• 20 years in high growth media
related businesses
• Vast executive experience
• Experience in creating and
managing digital development
projects
Nikolay Surikov
Chief Financial Officer • Joined CTC Media in 2012
• Almost 20 years experience in
finance
• Previously with Ernst & Young,
VTB and MTS
Julia Moskvitina
Chief Commercial Officer • Joined CTC Media in 1999
• 15 years experience in advertising
sales
Sergey Petrov
Chief Broadcasting Officer • Joined CTC Media in 1995
• 20 years experience in TV industry
Viacheslav Murugov
Chief Content Officer • Joined CTC Media in 2005
• Over 15 years in media industry
• Acclaimed producer of numerous
award winning TV shows
Lilia Omasheva
Chief of Operational Efficiency and
Organizational Development • Joined CTC Media in 2013
• 10 years experience in advertising
industry
33
CTC Media Shareholder Structure
CTC Media, Inc.
Shareholder of CTC Media
since 2002
Modern Times Group
MTG AB
39%
Number of common shares outstanding
(as of April 30, 2014)
Shareholder of CTC Media
since 2011
Telcrest Investments
Limited
25%
IPO on NASDAQ in June 2006
Free float
36%
155,762,166
Lorenzo Grabau
Co-Chairman
Irina Gofman
Director
Jørgen Madsen Lindemann
Director
Board of Directors
Independent Directors
Angelo Codignoni
Co-Chairman
Alexander Pentya
Director
Timur Weinstein
Director
Tamjid Basunia
Director
Werner Klatten
Director
Jean-Pierre Morel
Director
34
Appendix
13.5 13.5 13.4
7.06.7
5.6 5.4
2.82.3
2.72.3
1.9
1.0
2.0 1.9 1.8
0.8 0.8 0.8
17.2
15.0
14.0
12.2
6.3 6.2
5.34.7
3.02.7
2.4 2.3 2.2 2.11.8
1.5 1.41.2 1.0
0.6
17.7
ChannelOne
Russia 1 NTV TNT CTC Channel 5 Ren TV TV Centr Russia 2 TV-3 Domashny Zvezda Russia 24 Peretz Disney * Russia K Pyatniza *** U ** 2X2 Other
Q1 2013
Q1 2014
Audience Shares In “All 4+” Demographic
(1) Source: TNS Russia, CTC Media’s Research Department
(2) Includes audience shares of regional and non-FTA channels
Audience shares1, %
(*) Operated under Semerka brand before 31 December, 2011
(**) Operated under Muz-TV brand before 1 September, 2012
2
(***) Operated under MTV brand before 1 June, 20123
36
87%
65%
54%
88%
71%
61%
91%
76%
68%
94%
82%
73%
95%
85%80%
95%
89%
84%
95%90%
85%
Consistent Growth in Technical Penetration
Note: (1) Technical penetration means the percentage of the population that has the technical ability to receive a particular broadcast signal. Measured annually by TNS Gallup Media in cities with populations of more than 100,000
Technical Penetration1, %
2007 2008 2009 2010 2011 2012 2013 2007 2008 2009 2010 2011 2012 2013 2007 2008 2009 2010 2011 2012 2013
37
Advertising Sales Structure since 2011
Advertisers
Advertising Agencies
Internal Sales Houses External Sales Houses
Everest Sales RTR-Media Gazprom-Media / Alkasar Video International
Consultancy services
38
Operating Expenses
as % of total operating
expenses
as % of total operating
revenues
$153.1 mln $138.1 mln $186.3 mln $195.3 mln
59% 57%47% 42%
27% 30%
21%22%
7% 8%
6%6%
1%
-1%
1%
-1%
6% 6%
4%4%
Q1 2013 Q1 2014 Q1 2013 Q1 2014
Depreciation & amortization
Stock-based compensation
Direct operating expenses
SG&A expenses
Programming expenses
39
FY 2013 Income Statement Highlights
2012 2013 in USD in RUB
Total operating revenues 804,946 832,103 3% 7%
Total operating expenses (655,059) (624,404) -5% -2%
Total operating expenses before non-
recurring items (572,556) (594,535) 4% 7%
OIBDA 173,905 240,815 nm nm
OIBDA margin 21.6% 28.9%
Adjusted OIBDA 256,408 270,684 6% 10%
Adjusted OIBDA margin 31.9% 32.5% 0.6pp
Net income/(loss) attributable to CTC
Media, Inc. stockholders 93,063 152,340 nm nm
Diluted earnings per share $0.59 $0.97 nm
Adjusted Net income/(loss)
attributable to CTC Media, Inc.
stockholders
157,794 182,209 15% 19%
Adjusted Diluted earnings per share $1.00 $1.16 16%
Twelve Months
Ended December 31, Change(US$ 000’s except per share data)
40
(US$ mln)As of December 31,
2012
As of December 31,
2013
Cash and cash equivalents 55.2 30.6
Short-term investments 131.4 180.3
Total assets 985.6 971.0
including goodwill 178.0 135.3
including broadcasting licenses 82.3 59.7
including programming rights 255.3 294.0
Working capital1 298.3 311.9
Total debt (bank overdraft and loans) 13.2 3.4
Stockholders’ equity 762.9 734.1
Net cash position2173.4 207.5
(US$ mln)
Twelve months
ended December 31,
2012
Twelve months
ended December 31,
2013
Cash at beginning of period 12.3 55.2
Net cash provided by operating activities 157.7 186.6
including acquisition of progr. and sublic. rights (364.2) (378.0)
Net cash used in investing activities (26.5) (63.4)
including acquisition of businesses (4.0) (0.5)
including CapEx (15.6) (6.3)
including receipts from/(investments in) deposits (6.8) (56.6)
Net cash used in financing activities (88.9) (143.9)
Cash at end of period 55.2 30.6
CapEx (15.6) (6.3)
CapEx as % of total revenue 1.9% 0.8%
Free cash flow3 142.1 180.3
FY 2013 Balance Sheet and Cash Flow Highlights
Consolidated Balance Sheet Highlights Consolidated Cash Flow Highlights
Notes: (1) Working capital = current assets - current liabilities
(2) Net cash position = cash and cash equivalents + short-term investments - total debt
(3) Free cash flow = cash flow from operating activities - acquisitions of property and equipment and intangible assets
41
(US$ 000’s except per share data) OIBDATotal operating
expenses
Operating
income
Income before
income tax and
noncontrolling
interest
Income tax
expenseNet income
Fully diluted
earnings per
share
Twelve Months Ended December 31, 2012
Adjusted non-US GAAP results $256,408 ($572,556) $232,390 $247,192 ($48,373) $159,065 $1.01
Impact of impairment loss (82,503) (82,503) (82,503) (82,503) (16,500) (66,002) (0.43)
Results as reported
(under US GAAP, except for OIBDA which is a non-US GAAP
financial measure) $173,905 ($655,059) $149,887 $164,689 ($64,873) $93,063 $0.59
Reconciliation of Non-GAAP Measures
Reconciliation of consolidated adjusted OIBDA and other adjusted financial measures to consolidated OIBDA and other
corresponding GAAP financial measures
(US$ 000’s except per share data) OIBDATotal operating
expenses
Operating
income
Income before
income tax and
noncontrolling
interest
Income tax
expenseNet income
Fully diluted
earnings per
share
Twelve Months Ended December 31, 2013
Adjusted non-US GAAP results $270,684 ($594,535) $237,568 $251,365 ($61,335) $152,340 $0.97
Impact of impairment loss (29,869) (29,869) (29,869) (29,869) - - -
Results as reported
(under US GAAP, except for OIBDA which is a non-US GAAP
financial measure) 152,340 $0.97 $240,815 (624,404) 207,699 221,496 (61,335)
42
Reconciliation of Non-GAAP Measures
Reconciliation of consolidated adjusted OIBDA and other adjusted financial measures to consolidated OIBDA and other
corresponding GAAP financial measures
(US$ 000’s except per share data) OIBDA
Total
operating
expenses
Operating
income
(loss)
Income (loss)
before income tax
and noncontrolling
interest
Income tax
expenseNet income (loss)
Fully diluted
earnings per
share
Twelve months ended December 31, 2011
Adjusted non-US GAAP results $246,716 ($537,293) $ 229,067 $ 243,301 ($83,342) $ 152,561 $ 0.97
Impact of impairment loss (106,382) (106,382) (106,382) (106,382) 6,939 (99,443) (0.63)
Results as reported
(under US GAAP, except for OIBDA which is a non-US GAAP
financial measure) $ 0.34 $140,334 ($643,675) $ 122,685 $ 136,919 ($76,403) $ 53,118
Twelve months ended December 31, 2009
Adjusted non-US GAAP results $87,382 ($96,460) $84,047 $87,585 ($20,759) $64,466 $0.41
Impact of non-cash intangible asset impairment charge (18,739) (18,739) (18,739) (18,739) 3,748 (14,991) (0.10)
Impact of Stock-based compensation expense related to
settlement of litigation against former executive (28,588) (28,588) (28,588) (28,588) - (28,588) (0.18)
Results as reported (under US GAAP, except for OIBDA,
which is a non-GAAP financial measure) $163,929 ($353,638) $152,475 $148,645 ($45,626) $100,389 $0.64
Twelve months ended December 31, 2008
Adjusted non-US GAAP results $280,241 ($94,636) $92,712 $74,266 ($1,653) $64,635 $1.11
Impact of non-cash impairment of intangible assets of DTV,
Kz and Moldova (232,683) (232,683) (232,683) (232,683) 30,331 (153,679) (0.97)
Results as reported
(under US GAAP, except for OIBDA) $28,678 ($89,044) $0.14 $47,558 ($327,319) ($139,971) ($158,417)
43
Reconciliation of Non-GAAP Measures (continued)
Reconciliation of consolidated OIBDA margin to consolidated operating income margin
USD mln 2004 2005 2006 2007 2008 2009 2010
Comparable-basis total operating
revenues180,639 273,352 427,091 532,143 729,629 574,107 680,418
Agency commission fees payable to
Video International in connection
with Russian advertising sales
(excluding commissions for regional
advertising sales to local clients)
(25,072) (35,875) (56,257) (60,087) (89,458) (67,994) (79,133)
Total operating revenues 155,567 237,477 370,834 472,056 640,171 506,113 601,285
Reconciliation of consolidated OIBDA to consolidated operating income
Reconciliation of comparable-basis, non-GAAP total operating revenues to total operating revenues
USD mln Q1 2014 Q1 2013 FY 2013 FY 2012 FY 2011 FY 2010 FY 2009 FY 2008 FY 2007 FY 2006 FY 2005 FY 2004
Operating income (loss) 48,139 42,184 207,699 149,887 122,685 207,118 152,475 34,181 193,061 154,313 90,187 62,559
Add: depreciation and
amortization7,832 8,465 33,116 24,018 17,649 13,736 11,454 13,379 27,361 19,651 13,920 7,962
OIBDA 55,971 50,649 240,815 173,905 140,334 220,854 163,929 47,560 220,422 173,964 104,107 70,521
USD mln Q1 2014 Q1 2013 FY 2013 FY 2012 FY 2011 FY 2010 FY 2009 FY 2008 FY 2007 FY 2006 FY 2005 FY 2004
Operating margin 25.8% 21.6% 25.0% 18.6% 16.0% 34.4% 30.1% 5.3% 40.9% 41.6% 38.0% 40.2%
Add: depreciation and
amortization as
percentage of revenue
4.3% 4.3% 4.0% 3.0% 2.3% 2.3% 2.3% 2.1% 5.8% 5.3% 5.8% 5.1%
OIBDA margin 30.1% 25.9% 28.9% 21.6% 18.3% 36.7% 32.4% 7.4% 46.7% 46.9% 43.8% 45.3%
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Contact Information and Disclaimer
For further information please visit www.ctcmedia.ru or contact:
Irina Faritova
Head of Investor Relations E-mail: [email protected]
Tel: +7 (495) 981 0740
DISCLAIMER
The information contained in this presentation, including market data that are attributed to specific sources and have not been independently verified. No
representation, warranty or undertaking, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of
the information or the opinions contained herein. None of the Company or any of its affiliates, advisors or representatives shall have any liability whatsoever (in
negligence or otherwise) for any loss howsoever arising from any use of this presentation or its contents or otherwise arising in connection with the presentation.
The presentation is not an offer of securities for sale in the United States. Neither the presentation nor any copy of it may be taken or transmitted into or distributed in
the United States of America or to any U.S. person within the meaning of Regulation S under the United States Securities Act of 1933, as amended (the “Securities
Act”).
This presentation is not a public offer or advertisement of securities in the Russian Federation, and is not an offer, or an invitation to make offers, to purchase any
securities in the Russian Federation.
Certain statements in this presentation that are not based on historical information are "forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. Such forward-looking statements include, among others, Russian advertising market growth, roll-out of digital broadcasting in Russia by
2018, growth of Russian TV ad market by 2020 and etc. These statements reflect the Company's current expectations concerning future results and events. These
forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of CTC
Media to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. The potential risks and
uncertainties that could cause actual future results to differ from those expressed by forward-looking statements include, among others, changes in the size of the
Russian television advertising market; the roll-out of digital broadcasting in Russia; depreciation of the value of the Russian ruble compared to the US dollar; geopolitical
events involving Russia and the other countries in which the Company operates, including any potential negative economic impact of such events; the Company’s ability
to deliver audience share, particularly in primetime, to its advertisers; free-to-air television remaining a significant advertising forum in Russia; and restrictions on foreign
involvement in the Russian television business. These and other risks are described in the "Risk Factors" section of CTC Media's annual report on Form 10-K filed with
the SEC on March 6, 2014. Other unknown or unpredictable factors could have material adverse effects on CTC Media's future results, performance or achievements. In
light of these risks, uncertainties, assumptions and factors, the forward-looking events discussed herein may not occur. You are cautioned not to place undue reliance
on these forward-looking statements. CTC Media does not undertake any obligation to publicly update or revise any forward-looking statements because of new
information, future events or otherwise.
45