1
Oct 22, 2014
1
5 business segments
Intro
duct
ion
Sweden
Norway
Denmark
Estonia
Latvia
Lithuania
Bulgaria¹
Czech
Hungary
Ghana
• 4 satellite platforms • Virtual operator in 3rd
party networks
• 19 channels • 5 satellite platforms – Baltics, Ukraine & Russia
• 19 channels on 3rd party networks
• 9 Free-TV channels
Free-TV Scandinavia
Pay-TV Nordic
Free-TV Emerging Markets
Pay-TV Emerging Markets
• Radio • Content production
Other Businesses
3
Spanning 4 continents
Intro
duct
ion 28 free-TV channels in 10 countries
Satellite pay-TV platforms in 9 countries Over 66 million mini-pay subscriptions in 34 countries
0%3%6%9%12%15%18%21%24%27%30%
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
Revenues EBIT EBIT-margin
4
Revenues & EBIT
6%
15%
21% 21%
29%
34% 31%
15%
25% 29%
Total EBIT excluding discontinued operations and one-offs; ROIC excluding non-recurring items.
Return on capital employed
MTG = Made To Grow
SEK million
Intro
duct
ion
5
2011 revenue mix Segmental revenue mix
• Balanced revenue mix of cyclical advertising sales & linear subscription sales
• Unparalleled efficiency due to control of content, packaging, pricing & distribution
With a balanced revenue mix
Intro
duct
ion
0%
20%
40%
60%
80%
100%
2006 2007 2008 2009 2010 2011
Free-TV Scandinavia Pay-TV NordicEmerging Markets
44% 47%
9%
Advertising Subscription B2B / B2C
Content remains King
6
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
450,000
500,000
MTG RTL SBS Bonnier CME Mediaset
MTG TV channels broadcast 472,372 hours of entertainment in 2011 = 20,000 days of programming!
Intro
duct
ion
Hours broadcast
Pay-TV Free-TV Channel Distribution SVOD Co-finance
With multiple windows
7
*
Intro
duct
ion
From physical… to digital… to streaming in the ‘cloud’
And the industry is changing fast
8
Source: Screen Digest
Music
Video
Amazon sold more Kindle books than paperback books in 2011
Digital music sales accounted for >50% of total worldwide music sales in 2011
Online movie viewership set to more than double in 2012, whilst physical viewing predicted to remain stable
Intro
duct
ion
8
9 Free
-TV
Sca
ndin
avia
10
More channels available
SWEDEN DENMARK NORWAY
Competing for 162 viewing minutes per day
Competing for 198 viewing minutes per day
Competing for 166 viewing minutes per day Fr
ee-T
V S
cand
inav
ia
From onechannel in 1987 to over 50 in 2012
130
140
150
160
170
180
190
200
11
People watching more TV
Average Viewing Time per Day (minutes)
2007 2011
+ 5 minutes
+ 50 minutes
+ 21 minutes
Free
-TV
Sca
ndin
avia
12
Increasing TV’s ad market share
2011
2008
Sweden Denmark Norway
20.0%
22.1%
17.2%
19.2%
19.5%
20.9%
Free
-TV
Sca
ndin
avia
60
70
80
90
100
110
120
2008 2009 2010 201175%
80%
85%
90%
95%
100%
2008 2009 2010 2011
13
And driving demand levels
Market Sold Out Ratios in prime time Market cost per thousand (indexed)
Free
-TV
Sca
ndin
avia
Source: MTG research
0
10
20
30
40
50
60
70
2004 2005 2006 2007 2008 2009 2010 2011
14
Enabling MTG to close the gap
CSOV 15-49 Perceived penetration (not actual)
2008 2011
86% 88%
2008 2011
86% 88%
2008 2011
39%
66%
2008 2011
0% 47%
Free
-TV
Sca
ndin
avia
Source: MMS
0%
10%
20%
30%
40%
50%
60%
70%
80%
Bonnier MTG SBS
15
By building the media house
Average Weekly Reach (15-49)
2003 2011
Old & Male Old & Female
Young & Male Young & Female
Complementary Channel Profiles
Source: MMS
Free
-TV
Sca
ndin
avia
-2% +19% +8%
Source: MMS
16
Regional share of total advertising (NOK / DKK / SEK billion)
50% 40% 60%
0
5
10
15
Total regional advertising (SEK 15 bn)
• Number of regional TV3 Sweden broadcast zones increased from 6 to 19 on February 27th 2012
• Bundled TV, Radio & Internet Ad sales package with dedicated sales force of 120 people as of March 2012
• Local Ad prices as much as 2.13x national prices • Local TV ad market up 22% y/y in 2011, compared to
2.5% y/y growth for total local ad market
With more to come
Source: IRM Media, Regional market report,2012 & MTG estimates
Free
-TV
Sca
ndin
avia
TV4, 84%
MTG, 9%
Other, 7%
Regional TV advertising (SEK 860 mn)
Print, 63% Direct advertising,
14%
Internet, 14%
Radio, 4% TV, 5%
21.9%
21.2%
25.9%
24.5%
20%
22%
24%
26%
28%
30%
3,000,000
3,200,000
3,400,000
3,600,000
3,800,000
4,000,000
4,200,000
4,400,000
4,600,000
2008 2009 2010 2011
17
Best in class growth & margin
SEK thousands
Operating margin Total revenue
Free
-TV
Sca
ndin
avia
80
90
100
110
120
130
140
150
2008 2009 2010 2011 2012 2013 2014 201580
90
100
110
120
130
140
150
2008 2009 2010 2011 2012 2013 2014 2015
80
90
100
110
120
130
140
150
2008 2009 2010 2011 2012 2013 2014 2015
18D
A clear market opportunity
GDP Growth Total Ad Market Growth TV Ad Market Growth
• GDP growth + Total ad market growth + TV ad market growth
• + audience share gains • + channel launches • + penetration gains • + AVOD • + mini-pay
= long term sustained market outperformance
Free
-TV
Sca
ndin
avia
19 Free
-TV
Em
ergi
ng M
arke
ts
20
Well-positioned
Estonia Latvia Lithuania
Czech Republic Bulgaria Hungary Ghana Russia
Position #1 #1 #1 #2 #2 #3 - #4
Combined commercial audience share (target demographic)
42.0% (15-49)
37.2 (15-49)
44.0% (15-49)
27.7% (15-54)
28.1% (18-49)
8.1% (18-49)
18.8% (15-49)
16.1% (6-54)
Catch-up services Yes Yes Yes Yes Yes No No Yes
Sold on ’bundled’ basis Yes Yes Yes Yes Yes Yes N/A N/A
Free
-TV
Em
ergi
ng M
arke
ts
With scale operations in key markets
21
Financial performance (SEK million) (Baltics, Czech Republic & Bulgaria)
Commercial Audience Share
• Clear market leadership in Baltics with >43% pan-Baltic target group share of viewing as advertising spending returned to growth in 2011
• Investments in schedule & new Prima Love channel boosted target audience share in Czech Republic & enabled advertising market share gains in low growth environment in 2011
• Stable combined audience share in Bulgaria but no recovery in advertising spending in 2011
Free
-TV
Em
ergi
ng M
arke
ts
-5%
0%
5%
10%
15%
20%
25%
30%
0
400
800
1,200
1,600
2,000
2008 2009 2010 2011
Revenue EBIT EBIT margin
0%
10%
20%
30%
40%
50%
2006 2007 2008 2009 2010 2011
Czech Republic (15-54)
Bulgaria (18-49)
Pan-Baltic (15-49)
And equivalent consumer pricing
Bulgaria Germany
81.97 BGN 44.6 EUR = 41.9 EUR
Shopping list
EUR Salami 3.48 Frozen fish 8.55 Coffee 5.34 Chocolate 2.24 Vodka 8.91 Shower Gel 1.39 Detergent 2.8 Powder 11.89
Shopping list BGN Salami 4.79 Frozen fish 10.43 Coffee 11.82 Chocolate 4.14 Vodka 23.99 Shower Gel 2.75 Detergent 8.46 Powder 15.59
Difference: -6.4%
Source: METRO Cash & Carry monthly catalogues
22 Free
-TV
Em
ergi
ng M
arke
ts
But lower contact cost
CPT dynamics (2011)
Source: MTG research
Free
-TV
Em
ergi
ng M
arke
ts
23
And media spend per capita
24
TV Ad spend per capita (SEK’000, 2011)
0.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
1.6
1.8
2.0
Source: IMF, Zenith Optimedia 2012
Free
-TV
Em
ergi
ng M
arke
ts
So the opportunity is clear
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
Estonia Latvia LithuaniaBulgaria Czech Hungary
TV Ad market has outperformed Nominal GDP development by a factor of 1.28
GDP growth in MTG EM territories (indexed)
Forecast GDP growth in MTG CEE territories
0
100
200
300
400
500
600
GDP TV Ad Market MTG Sales
20 Source: IMF, TNS/MTG estimates
Free
-TV
Em
ergi
ng M
arke
ts
0
1
2
3
4
5
6
7
8
9
10
Returning market opportunity
26
CEE TV ad markets where MTG is present
SEK 8.6 billion
SEK 6.4 billion
2008 2011
SEK 2.2 billion
Sources: Zenith Optimedia 2012/MTG Estimates
Free
-TV
Em
ergi
ng M
arke
ts
27 Pay-
TV N
ordi
c
28
Technology changes behaviour
Owned & Operated Satellite Platform
Viasat Channels in 3rd Party Networks
Virtual Operator in 3rd Party Networks
Gatekeeper Independent
Internet Environment
Pay-
TV N
ordi
c
0%
3%
6%
9%
12%
15%
2007 2008 2009 2010 20110
50
100
150
200
250
300
350
Dec-11Dec-10Dec-09Dec-08Dec-07
Multi-room PVR HD
0
1,000
2,000
3,000
4,000
5,000
6,000
2006 2007 2008 2009 2010 20110
200
400
600
800
1,000
2006 2007 2008 2009 2010 2011
29
Growing viasat…ellite
Pay-
TV N
ordi
c
Premium satellite ARPU (SEK)
Value-added services (000’s)
Premium satellite subscribers (000’s)
Satellite subscription price increases (Nordic)
30
Sources: Viasat Broadcasting research
0
200
400
600
800
1 000
1 200
2006 2007 2008 2009 2010 2011DTH satellite 3rd party networks
Viasat premium subscribers (Nordic)
Scandinavian satellite universe
Scandinavian satellite & Virtual
Operator agreements (IPTV, cable)
~1.6m households
~4.2m households
2008 2009 2010 2010 1991
A platform agnostic approach
Pay-
TV N
ordi
c
31
Entertainment at your command
First to Market with Full Service ‘Over-The-Top’ Solution
• Anytime
Access all services ‘on demand’
• Anywhere Access subscription online
• Any Device Enjoy subscription on multiple devices in and out of home
Pay-
TV N
ordi
c
Set -Top Box
PC/Mac
Mobile
Tablet Media Players
OTT Set-Top box
Game consoles Embedded
TV Set Applications
Opens up a whole new universe
32
90% of Swedish households have over 2 MB/s broadband connection speeds
Satellite ~1.6 million
Virtual Operator ~4.2 million
OTT ~9.0 million
Pay-
TV N
ordi
c
Best in class performance
33
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
5,000
2006 2007 2008 2009 2010 2011
Revenue EBIT EBIT margin
(SEK million)
Pay-
TV N
ordi
c
34 Pay-
TV E
mer
ging
Mar
kets
Expanding horizons
35
2003 2004 2005 2006 2007 2008 2009 2010 2011 Countries 7 11 15 22 23 24 25 25 28 Channels 2 3 5 6 7 8 10 15 19 Satellite platforms Baltics Ukraine Russia
36
Multi-dimensional opportunities
Satellite pay-TV households in Eastern Europe (million)
Source: Screen Digest 2012
Cable & IPTV households, Eastern Europe (2011, million)
0
5
10
15
20
25
30
35
40
Pay-
TV E
mer
ging
Mar
kets
0
10
20
30
40
50
60
37
Seizing the Opportunity
Pay-
TV E
mer
ging
Mar
kets
Mini-pay subscriptions (millions) Viasat satellite subscribers Baltics, Ukraine, Russia (000’s)
0
100
200
300
400
500
600
2006 2007 2008 2009 2010 201110,000
20,000
30,000
40,000
50,000
60,000
70,000
2006 2007 2008 2009 2010 2011
38 Source: TNS Russia 2012, Screen Digest 2012
Top 10 pay-TV channels in Russia (monthly reach, million people)
Share of viewing – Free TV and Viasat channels (Russia, 25-44*)
* Russia 100,000+, 1/1/2012-30/4/2012, 05:00:00 - 29:00:00
13.1 11.3
10.7
10.6 9.5
5.5 3.8 2.8
2.7
2.4
2.0
1.9 1.9
1.9
1.3
0
4
8
12
16
Establishing leading positions
Pay-
TV E
mer
ging
Mar
kets
11.0
11.9
12.2
13.2
14.1
15.5
17.9
19.4
20.6
21.2
0 10 20 30
Dom Kino
Sony Entertainment TV
Viasat History
National Geographic
Eurosport
Moya Planeta
Animal Planet
Discovery Channel
TV 1000
TV 1000 Russian Kino
To grow with the flow
39 Source: MTG Data
0100200300400500600700800900
1000
2007 2008 2009 2010 2011
Revenue EBIT
Total segment revenue & EBIT (SEK million)
Revenue split 2011
44%
56%
Satellite Channels
Pay-
TV E
mer
ging
Mar
kets
40
41
Cash is king
Net operating cash flow (SEKm)
0%
20%
40%
60%
80%
100%
0
500
1,000
1,500
2,000
2,500
Net operating cash flow
% of EBITDA converted
Dividends received from CTC Media (SEKm)
Capi
tal a
lloca
tion
0
20
40
60
80
100
120
140
42
0
1,000
2,000
3,000
4,000
5,000
0
1,000
2,000
3,000
4,000
5,000
6,000
(SEKm) (SEKm)
Net Debt Available Liquid Funds
Enables deleveraging
Capi
tal a
lloca
tion
43
• 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)
0.00
5.00
10.00
15.00
20.00
25.00
30.00
35.00
40.00
2006 2007 2008 2009 2010 2011
Buybacks (value per share)
CDON spin-off
Extraordinary dividend pershareOrdinary dividend per share
Net cash flow per share
EPS adj (excluding one-offs)
30% of EPS adj (excluding one-offs)
And shareholder returns
Capi
tal a
lloca
tion
44
For Further Information, please visit www.mtg.se or contact:
MTG Investor Relations
Tel: +46 736 99 29 81/ +44 759 009 8188
Email: [email protected]
Nasdaq OMX: ‘MTGA’, ‘MTGB’
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