1 Modern Times Group MTG Third Quarter 2011 Financial Results
Nov 12, 2014
1
Modern Times Group
MTG
Third Quarter 2011
Financial Results
2 Q3 2
011 F
INA
NC
IAL R
ES
ULT
S
3
Third Quarter 2011
Sales Growth & Higher Margins
• Sales up 4% y/y at constant FX & up 3% y/y at
reported FX to SEK 3,106 (3,017) mn
• OPEX up y/y to SEK 2,748 (2,681) mn & up 4%
y/y at constant FX
• EBIT before associated company income up 6%
y/y to SEK 358 (336) mn
• Increased operating margin of 12% (11%)
• Total EBIT of SEK 514 (427) mn
• Including SEK 156 (91) mn of associated
company income
• Income before tax of SEK 439 (472) mn
• Net income from continuing operations of SEK
306 (339) mn & total net income of SEK 306
(359) mn
• Basic EPS of SEK 4.71 (5.31) & total basic EPS
of SEK 4.71 (5.63)
Q3 2
011 F
inancia
l R
esults
SEK mn
* EBIT excluding associated income
0%
5%
10%
15%
20%
25%
30%
35%
40%
0
500
1,000
1,500
2,000
2,500
3,000
3,500
Q3 2010 Q3 2011
Revenue EBIT* EBIT margin
4
First Nine Months 2011
Sales & EBIT Growth
• Sales up 8% y/y at constant FX & up 3% at
reported FX to SEK 9,762 (9,484) mn
• OPEX of SEK 8,380 (8,195) mn – up 7% y/y at
constant FX
• EBIT before associated company income up 7%
y/y to SEK 1,382 (1,288) mn
• Stable operating margin of 14% (14%)
• Total EBIT up 17% SEK 1,879 (1,608) mn
• Including SEK 497 (320) mn of associated
company income
• Income before tax of SEK 1,791 (1,579) mn
• Net income from continuing operations up 14% y/y
to SEK 1,276 (1,116) mn & total net income of
SEK 1,276 (1,182) mn
• Basic EPS from continuing operations of SEK
18.90 (16.80)
• Total basic EPS of SEK 18.90 (17.81)
9M
2011 F
inancia
l R
esults
SEK mn
* EBIT excluding associated income
0%
5%
10%
15%
20%
25%
30%
35%
40%
0
2,000
4,000
6,000
8,000
10,000
12,000
9M 2010 9M 2011
Revenue EBIT* EBIT margin
Opera
tin
g r
evie
w
6
Free-TV Scandinavia
Financial Highlights
• Sales of SEK 984 (922) mn in Q3 & SEK 3,153
(3,018) mn for YTD
• Up 7% y/y in Q3 & 8% for YTD at
constant FX
• OPEX of SEK 768 (703) mn in Q3 & SEK 2,358
(2,286) mn for YTD
• Up y/y at constant FX for both periods
• Investments in local productions and other
programming & y/y effect of launch of TV10
in Sweden in Sep 2010
• EBIT slightly down y/y to SEK 216 (219) mn in
Q3 & up 9% y/y to SEK 795 (732) mn for YTD
• EBIT margin of 21.9% (23.8%) in Q3 &
25.2% (23.8%) for YTD
Opera
tin
g r
evie
w
SEK mn
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
Q3 2010 Q3 2011 9M 2010 9M2011
Revenue EBIT EBIT margin
7
Free-TV Scandinavia
Operating Highlights
Sweden
• Target audience share of 38.4% (38.8%) in Q3
• Up from 37.6% in Q2
• Launch of Fall programming schedules
• Audience share gains for TV8 & TV10
Norway
• Target audience share of 22.0% (29.1%)
• Down from 24.8% in Q2
• Performance reflected impact of new
commercial channels launched in Q4 2010
• Ongoing investments in programming
content with focus on local productions
Denmark
• Target audience share of 23.1% (24.8%)
• Down from 25.7% in Q2
• Performance reflects impact of Danish
general elections
• Fall schedules strengthened with new &
returning formats
Opera
tin
g r
evie
w
Commercial Audience Share (15-49)
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
Q32009
Q42009
Q12010
Q22010
Q32010
Q42010
Q12011
Q22011
Q32011
Sweden Norway Denmark
8
Pay-TV Nordic
Financial Highlights
Sales of SEK 1,184 (1,140) mn in Q3 & SEK
3,509 (3,347) mn for YTD
Up 4% y/y in Q3 & 8% for YTD at
constant FX
OPEX of SEK 949 (939) mn in Q3 & SEK 2,831
(2,733) mn for YTD
Up y/y at constant exchange rates
Ongoing investments in premium sports
content
Addition of 7 Viasat channels since the
beginning of 2010
EBIT up 17% y/y to SEK 234 (201) mn in Q3 & up
10% to SEK 677 (614) mn for YTD
Increased operating margins of 19.8%(17.6%) in
Q3 & 19.3% (18.3%) for YTD
Opera
tin
g r
evie
w
SEK mn
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
Q3 2010 Q3 2011 9M 2010 9M 2011
Revenue EBIT EBIT margin
9
Pay-TV Nordic
Operating Highlights
• Stable premium subscriber base y/y in Q3 & down
slightly q/q
• Third party premium network subscriber
base up y/y & stable q/q
• Performance reflected:
• Ongoing subscriber intake in Sweden offset
by increased churn levels in Denmark due
to high competition
• Premium ARPU up y/y to SEK 4,751 (4,472) mn &
up 8% y/y at constant FX
• Previously introduced price increases
• Rising penetration of value-added services
Opera
tin
g r
evie
w
Thousands
Thousands
Premium subscribers
Value added services
0
200
400
600
800
1,000
1,200
Q12010
Q22010
Q32010
Q42010
Q12011
Q22011
Q32011
Satellite subscribers 3'rd party network subscribers
0
50
100
150
200
250
300
Q12010
Q22010
Q32010
Q42010
Q12011
Q22011
Q32011
ViasatPlus HDTV Multi-room
10
Free-TV Emerging Markets
Financial Highlights
• Total sales of SEK 400 (357) mn in Q3 & SEK
1,418 (1,373) mn for YTD
• Up 12% y/y in Q3 & 8% for YTD at
constant FX
• OPEX of SEK 476 (432) mn in Q3 & SEK 1,453
(1,472) mn for YTD
• Up for both periods at constant FX
• Continued strategic programming
investments across all territories
• EBIT of SEK -76 (-75) mn in Q3 & SEK 65 mn
positive swing to SEK -35 (-100) mn for YTD
• Baltic, Czech & Bulgarian sales of SEK 352
(310) mn in Q3 & SEK 1,254 (1,198) mn for YTD
• Up 14% y/y in Q3 & 9% for YTD at
constant FX
• EBIT of -48 (-49) mn in Q3 & SEK 45 (-22) mn
for YTD
• EBIT margin of 3.6% for YTD
Free-TV Emerging Markets
Baltics, Czech Republic & Bulgaria
SEK mn
SEK mn
-500
0
500
1,000
1,500
Q3 2010 Q3 2011 9M 2010 9M 2011
Revenue EBIT
-100
200
500
800
1,100
1,400
Q3 2010 Q3 2011 9M 2010 9M 2011
Revenue EBIT
11
Free-TV Emerging Markets
Operating Highlights
Baltics
• Sales up 19% y/y in Q3 & 11% for YTD at
constant FX
• Increased pan-Baltic target audience share of
41.4% (40.5%)
• New channel TV8 launched in Lithuania after end
of Q3. Targets female 35+ audience
Czech Republic
• Sales up 18% in Q3 & 19% for YTD at constant
FX & gained significant market share in Q3
• Continued significant CSOV gains both y/y and
q/q
• New channel Prima LOVE now fully included in
advertising sales bundle
Bulgaria
• Sales down 3% y/y in Q3 & down 12% for YTD at
constant FX due to continued decline in overall TV
ad market & low pricing levels
• Increased programming investments with launch
on own productions to drive ratings
Opera
tin
g r
evie
w
10%
20%
30%
40%
50%
Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011
Estonia (15-49) Latvia (15-49)
Lithuania (15-49) Czech Republic (15-54)
Bulgaria (18-49)
12
Pay-TV Emerging Markets
Financial Highlights
• Sales of SEK 240 (228) mn in Q3 & SEK 685
(671) mn for YTD
• Up 14% y/y in Q3 & 15% for YTD at
constant FX
• Growth primarily driven by continued y/y
subscriber intake on the Ukrainian and
Russian platforms
• Y/y effect on YTD sales of consolidation of
50% of Raduga TV from February 2010 &
full consolidation of Viasat Ukraine from
June 2010
• OPEX of SEK 227 (223) in Q3 & SEK 643 (589)
for YTD – even higher growth at constant FX
• Launch of 10 new Viasat channels since
beginning of 2010
• Consolidation of 50% of Raduga TV &
100% of Viasat Ukraine
• Ongoing investments in development of
platforms & offering
• EBIT more than doubled to SEK 13 (6) mn in Q3
but down to SEK 42 (82) mn for YTD
• EBIT margins of 5.5% (2.6%) in Q3 & 6.1%
(12.3%) for YTD
Opera
tin
g r
evie
w
SEK mn
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
0
100
200
300
400
500
600
700
800
Q3 2010 Q3 2011 9M 2010 9M 2011
Revenue EBIT EBIT margin
13
Pay-TV Emerging Markets
Operating Highlights
• 88,000 net new subscribers added y/y
• Significant subscriber uptake in Ukraine &
growth in both Russian and Baltic
subscriber bases
• Wholesale mini-pay business subscriptions up
31% y/y and up from Q2 2011
• Viasat History & Viasat Nature documentary
channels launched in Uganda and Tanzania
after the end Q3 following signing of a
distribution agreement with digital terrestrial
television operator StarTimes
• Channels will also be included on
StarTimes pay-TV offering in Nigeria.
Opera
tin
g r
evie
w
Satellite subscribers
Mini-pay TV subscriptions
Thousands
Thousands
200
250
300
350
400
450
500
Q12010
Q22010
Q32010
Q42010
Q12011
Q22011
Q32011
30,000
40,000
50,000
60,000
70,000
Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011
Mini-pay TV subscriptions
14
Other Businesses
Highlights
• Comprises MTG’s Radio, Bet24 and Modern
Studios operations
• Sales of SEK 372 (456) mn in Q3 & SEK 1,225
(1,349) mn for YTD – down 18% y/y & 6% for YTD
at constant exchange rates
• Lower licensing and production revenues
for Modern Studios & Strong Q3 2010 for
Bet24 due to 2010 World Cup
• Combined OPEX of 358 (406) mn in Q3 1,143
(1,232) mn for YTD
• EBIT before associated company income of SEK
14 (51) mn in Q3 & SEK 78 (117) mn for YTD
• EBIT margins of 3.8% (11.1%) in Q3 &
6.4% (8.7%) for YTD
• Total EBIT of SEK 18 (50) mn in Q3 & 82
(122) mn for YTD including associated
company income of SEK 4 (-1) mn in Q3 &
4 (5) mn for YTD
Opera
tin
g r
evie
w
SEK mn
0%
5%
10%
15%
20%
25%
30%
35%
40%
0
200
400
600
800
1,000
1,200
1,400
1,600
Q3 2010 Q3 2011 9M 2010 9M 2011
Revenue EBIT EBIT margin
15 Fin
ancia
l R
evie
w
16
Income Statement
• Depreciation & amortisation charges
of SEK 47 (53) mn in Q3 & SEK 145
(160) mn for YTD
• Net interest and other financial items
of SEK -75 (45) mn in Q3& SEK -88
(-29) mn for YTD
• Y/y reduction in net interest charges
to SEK 17 (24) mn in Q3 &
SEK 45 (55) mn for YTD
• Y/y change in other financial items
also included SEK -64 (-) y/y non-
cash financial gain from the change
in value of the option element of the
SEK 250 mn CDON Group
convertible bond & a non-cash
financial gain of SEK 12 (71) mn
following the new share issues by
CTC Media and the resulting dilution
of MTG’s ownership in the company
Fin
ancia
l R
evie
w
(SEK mn)
Q3
2011
Q3
2010
9M
2011
9M
2010
Net sales 3,106 3,017 9,762 9,484
EBIT before associated company
income & non-recurring items 358 336 1,382 1,288
Associated company income 156 91 497 320
Total EBIT 514 427 1,879 1,608
Net interest & other financial items -75 45 -88 -29
Income before tax 439 472 1,791 1,579
Net income from continuing
operations 306 339 1,276 1,116
Net income from discontinued
operations - 20 - 66
Net income 306 359 1,276 1,182
Basic EPS from continuing
operations 4.71 5.31 18.90 16.80
Total basic EPS 4.71 5.63 18.90 17.81
17
Cash Flow
• Change in working capital reflected
timing of payments for key sports rights
& cash tax payments
• No investments in businesses during
9M 2011, compared to SEK 136 mn
investment in Raduga TV in Q1 2010 &
SEK 132 mn investment in Viasat
Ukraine in Q2 2010
• CAPEX = less than1% of Group net
sales for the period
• Cash flow from financing activities
included net loan increase of SEK 68
(-90) mn
• Cash flow to financing activities of
SEK -770 (-236) mn for YTD
primarily reflected SEK 498 (363)
mn dividend payment to MTG
shareholders in Q2
Fin
ancia
l R
evie
w
(SEK mn)
Q3
2011
Q3
2010
9M
2011
9M
2010
Cash flow from
operations 345 371 1,334 1,231
Changes in working
capital -483 -216 -645 -708
Net cash flow from
operations -138 155 689 523
Cash flow to/from
investing activities -34 -47 -86 -383
Cash flow to/from
financing activities 64 -105 -770 -236
Cash flow from
discontinued operations
– CDON Group
- 32 - -42
Net change in cash &
cash equivalents -108 35 -167 -138
18
Financial Position
• SEK 2,417 (3,500) mn of the Group’s available
credit drawn down as at 30 Sep 2011
• Net debt of SEK 1,861 (3,031) mn, compared
to net debt of SEK 1,716 mn as at 30 Jun 2011
• SEK 4,499 (3,631) mn of available liquid funds
(cash & undrawn facilities)
• SEK 2,253 mn book value of 38.2%
shareholding in CTC Media had public equity
market value of SEK 3,674 mn at end of Sep
2011
Fin
ancia
l R
evie
w
(SEK mn)
30 Sep
2011
30 Sep
2010
Non-current assets 9,156 8,727
Current assets 5,802 6,641
Total assets 14,958 15,368
Shareholders’ equity 7,391 5,857
Long-term liabilities 3,090 4,232
Current liabilities 4,476 5,278
Total equity & liabilities 14,958 15,368
Net debt / EBITDA
1.2 1.2 1.1
0.8 0.7
0.6 0.7
Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11
19
Summary
• Record sales following growth for all four broadcasting divisions
• Continued ad market growth & market share gains in Scandinavia
• Lagging recovery in emerging advertising markets but ongoing audience &
market share gains
• Nordic pay-TV revenues up with best in class margins
• Emerging market pay-TV on track with healthy subscriber & revenue growth
• Increased Group operating margins despite ongoing investments in
programming & platforms
• Healthy cash flow & strong financial position from which to invest further in
future growth
Sum
mary
20
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]
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