1. Modern Times Group MTG AB
Nasdaq OMX Stockholm : MTGA, MTGB 1
Modern Times Group MTG AB
Corporate Presentation
November 2010
Maximizing the Power of Entertainment
2. Modern Times Group MTG AB
Nasdaq OMX Stockholm : MTGA, MTGB 2
International Entertainment Broadcaster with Largest
Broadcast Footprint in Europe
• Growth company with integrated Free-TV &
Pay-TV operations & centralised play-out
facility in London
• Largest Free-TV & Pay-TV operator in
Scandinavia & the Baltics
• Second largest Free-TV operator in Czech
Republic & Bulgaria with additional
operations in Hungary, Slovenia & Ghana
• Emerging Market satellite Pay-TV platforms
in Baltics, Russia & Ukraine + Pay-TV
channels available in 25 countries incl. US
• Largest Nordic Radio Operator & Leading
Internet Retailer
• 38.3% shareholder in Russia’s largest
independent television broadcaster - CTC
Media (Nasdaq: ‘CTCM’)
* When excluding SEK 270 million of associated company income
and SEK -3,352 million of non-recurring items
LTM Sales SEK 15,001 million ( USD 2,299 million)
LTM Operating Income SEK 2,431 million* ( USD 373 million)
No of employees 2,900
Listing Nasdaq OMX Nordic (Large Cap Mkt)
Symbol MTGB
Market Cap SEK 34.4 billion ( USD 5.3 billion)
*Excluding non-recurring items
3. Modern Times Group MTG AB
Nasdaq OMX Stockholm : MTGA, MTGB 3
Operationally Geared Growth Company
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
2002 2003 2004 2005 2006 2007 2008* 2009* 9M
2009
9M
2010
Revenue EBIT
(SEK million)
* Excluding non-recurring items
4. Modern Times Group MTG AB
Nasdaq OMX Stockholm : MTGA, MTGB 4
Sustained Market Outperformance
• Balanced revenue mix of cyclical advertising
sales & linear subscription sales
• Unparalleled efficiency due to control of content,
packaging, pricing & distribution
• Integrated operating structure yields synergies &
competitive advantage
• Increasing exposure to historically high growth
emerging markets with high operating leverage
• Proven resilience to economic downturn in 2009
with 3% full year sales growth at constant
exchange rates & 12% group operating margin
(excluding associated company income)
Segmental revenue mix
2009 revenue mix
5. Modern Times Group MTG AB
Nasdaq OMX Stockholm : MTGA, MTGB 5
6,000
50,000
0
25
50
75
100
125
150
175
Market Dynamics
TV Advertising Spend (USD million)
0
200
400
600
TV Advertising Spend Per Capita (USD)
TV Ad Spend / Total Ad Spend TV Viewing (minutes per day)
2009 data except * 2008 statistics; ** 2007 statistics
USA
USA
UK
USA
UK
Russia3,000
USA
Western
Europe
6. Modern Times Group MTG AB
Nasdaq OMX Stockholm : MTGA, MTGB 6
Business Segment Profile & Performance
7. Modern Times Group MTG AB
Nasdaq OMX Stockholm : MTGA, MTGB 7
A Modern Media Group for Modern Times
Sweden Denmark Norway Estonia Latvia Lithuania Czech Hungary Bulgaria Slovenia Russia
#2 #2 #2 #1 #1 #1 #2 #3 #2 #2 #4
Ukraine Russia
Raduga
Pay-TV Operator
Free-TV Operator
8. Modern Times Group MTG AB
Nasdaq OMX Stockholm : MTGA, MTGB 8
Free-TV Scandinavia
Commercial Audience Share (15-49)
Operating Performance (SEK million)
National Penetration
• Sales up 18% y/y at constant exchange rates to SEK 3.02 bn
for 9M 2010 following strong market recovery & macro development
• Substantial advertising market share gains due to:
- rising penetration levels following digitalisation
- increasing target audience shares with complementary channel
launches
- bundled pricing strategy & narrowing of pricing discount to
incumbents
• Balancing of cost control & programming investments - EBIT up
36% y/y to SEK 732 mn for 9M 2010, with increased operating
margin of 24%
Rising Audience & Advertising Market Shares
9. Modern Times Group MTG AB
Nasdaq OMX Stockholm : MTGA, MTGB 9
0
20
40
60
80
100
TV4 Viasat SBS
2003 2009
Source: MMS
Advertising sold on bundled 'Total Reach’ basis...Complementary channel profiles...
Weekly Reach (15-49)
%
-11% +32% +5%
Free-TV Scandinavia
The Multi-Channel Media House Model (Example: Sweden)
10. Modern Times Group MTG AB
Nasdaq OMX Stockholm : MTGA, MTGB 10
Pay-TV Nordic
Premium Subscriber Development (thousands)
Operating Performance (SEK million)
Premium Satellite ARPU (SEK)
• Sales up 8% y/y at constant exchange rates to SEK 3.35 bn
for 9M 2010
• Ongoing subscriber growth driven by increasing penetration of IPTV
- Virtual Operator agreements with all major Scandinavian
broadband networks & development of online Viasat OnDemand
platform
• Ongoing Premium Satellite ARPU growth driven by price increases
and accretive value-added services – multi-room & HDTV
• EBIT up 15% y/y to SEK 614 mn for 9M 2010, with operating
margin of 18% despite ongoing investments in key programming
assets (incl. Swedish rights to English Premier League football) &
addition of channels to platform
Subscriber & ARPU Growth
11. Modern Times Group MTG AB
Nasdaq OMX Stockholm : MTGA, MTGB 11
Pay-TV Nordic
The New ‘Anytime Anywhere’ Paradigm
Owned & Operated
Satellite Platform
Viasat Channels in
3rd Party Networks
Virtual Operator in
3rd Party Networks
Gatekeeper
Independent Internet
Environment
• 10 Premium packages of Viasat & 3rd
party Free & Pay-TV channels
• Subscription & other fees with 12 or
24 month contracts
• PVR, HD, Multi-room, on-demand
services
• Satellite universe excludes city-
centres
• Viasat channels sold individually on
‘mini-pay’ wholesale basis to cable &
DTT network operators
• Variable fee per subscriber
• No customer relationship
• Platform agnostic
• Premium Viasat channel packages
provided through 3rd party double &
triple-play networks
• Direct access to customer base
including city-centre homes unable to
receive satellite service
• Revenue sharing model with billing
through 3rd party
• Lower ARPU & SAC than own
satellite platform = equivalent
profitability levels
• Device & network agnostic
• OnDemand offering via internet
portal = securing position as the
online free & pay-TV content
aggregator
• Viasat & 3rd party Free-TV channel
catch-up services + On demand
movies , TV series & exclusive live
sports
• Subscription / pay per day / pay per
event pricing
• Availability through over the top
solutions
12. Modern Times Group MTG AB
Nasdaq OMX Stockholm : MTGA, MTGB 12
Free-TV Emerging Markets
Operating Performance (SEK million)
Commercial Audience Share
Return to Growth in Stable Market Conditions
• Sales up 3% y/y at constant exchange rates to SEK 1.37 bn for
9M 2010 with sales growth in each territory following advertising
market share gains in stabilised market conditions
• Muti-channel stategy in scale & established Baltic, Czech &
Bulgarian markets
• Clear market leader in Baltics with 41% pan-Baltic commercial
share of viewing (15-49) following audience share gains in each
country
• Challenger in duopolistic Czech & Bulgarian markets with rising
power ratios
• EBIT loss reduced to SEK 100 mn for 9M 2010 following return to
growth & y/y reduction in operating costs
• Ongoing investments in development of operations in Slovenia &
Ghana
• Operationally geared to recovery with expectation of gradual
return to pre-crisis growth levels
• Ongoing review of start-up & acquisition opportunities in Emerging
Europé & sub-Saharan Africa
13. Modern Times Group MTG AB
Nasdaq OMX Stockholm : MTGA, MTGB 13
Pay-TV Emerging Markets
Satellite Subscribers (thousands)
Operating Performance (SEK million)
Mini-pay Subscriptions (millions)
• Sales up 14% y/y at constant exchange rates to SEK 671 mn
following subscriber & subscription growth
• Owner of 100% of largest digital broadcasting platform in Baltics,
85% of Ukrainian satellite platform & 50% of Russian satellite
platform + virtual operator in leading Estonian broadband network
• 15 Viasat channels sold on min-pay / wholesale basis to 3rd party
cable & satellite operators in 25 countries including US
• Ongoing investments in development of early stage Ukrainian &
Russian satellite platforms
• EBIT of SEK 82 mn for 9M 2010, with operating margin of 12%
• Geared to emergence of pay-TV & price increases as economies
recover & consumer spending power rises over time
Satellite Platforms in 5 countries & Channels sold in 25 countries
14. Modern Times Group MTG AB
Nasdaq OMX Stockholm : MTGA, MTGB 14
CTC Media, Inc.
Revenue Growth in RUB
Operating Performance (USD thousands)
Audience Share Dynamics (9M 2010)
• Largest shareholder in Nasdaq quoted company - 38.3%
shareholding acquired for USD 83 mn with current equity
market value of ~USD 1.4 bn
• Sales up 15% y/y in ruble terms to USD 379.0 mn for 9M 2010
following 8% y/y growth in Russian advertising sales in ruble
terms - guidance for FY 2010 sales growth of ~13%
• 12.8% combined 4+ audience share &19% combined national
advertising market share or CTC, Domashny & DTV networks
• OIBDA of USD 116 mn for 9M 2010, with margin of 31% &
guidance for FY 2010 margin of >35%
• Net cash position & payment of USD 80 million dividend in 2010
Equity Participation in #1 Russian Independent Media Company
48%
19%
32%
-3%
8%
2006 2007 2008 2009 9M 2010
CTC Media ad sales growth
0
200
400
600
800
2006 2007 2008 2009 9M 2009 9M 2010
Sales EBIT
15. Modern Times Group MTG AB
Nasdaq OMX Stockholm : MTGA, MTGB 15
Financial Performance & Position
16. Modern Times Group MTG AB
Nasdaq OMX Stockholm : MTGA, MTGB 16
Strong & Flexible Financial Position
SEK million
9M
2010
Sales 10,925
EBIT (incl. Associates) 1,706
Pre-tax profit 1,664
Net income 1,182
Income
SEK billion
30 Sep
2010
Total debt
Cash & equivalents
3,562
531
Net debt 3,031
Net debt / LTM
underlying EBITDA
Available liquid funds
1.1x
3,631
Financial Position
SEK million
9M
2010
Cash flow from ops 1,294
CAPEX
- as % of revenues
Dividend
Net change in cash &
equivalents
118
1%
363
-137
Cash Flow
• New unsecured SEK 6.5 bn five year
revolving multi-currency credit facility
arranged in October 2010 to replace
existing facilities with more flexible
structure & attractive terms
• 24% ROCE & 27% ROE
• Significant impact of y/y
strengthening of SEK reporting
currency vs. operating currencies on
reported results – sales growth
higher at constant exchange rates
than reported
• Annual tax rate of 25-30%
• Payment of increased annual
dividend of SEK 5.50 per share
• Increased working capital following
key programming rights investments
USD 1 = SEK 6.52 (November 4, 2010)
17. Modern Times Group MTG AB
Nasdaq OMX Stockholm : MTGA, MTGB 17
CDON Group
• Sales up 27% y/y at constant exchange rates to
SEK 1.44 bn & EBIT up 31% to SEK 97 mn for
9M 2010 , with 7% operating margin
• MTG EGM on 21 October 2010 approved distribution of
all CDON Group shares to MTG shareholders & listing of
shares on Nasdaq OMX Stockholm stock exchange
– Shareholders to receive 1 CDON Group share per MTG Class A or
Class B share held
– Intention to complete spin-off before end of 2010
Operational Performance (MSEK)
Online Retail Penetration 2009
Market Leading Internet Retailer to be Spun-Off to Shareholders
0
50
100
150
200
0
500
1,000
1,500
2,000
2005 2006 2007 2008 2009
Entertainment Fashion Health & Sports EBIT
The Swedish Online Retail Market
6.0%
4.7%
3.8% 3.7%
3.5% 3.4%
0%
2%
4%
6%
8%
US Denmark Nordic
average
Sweden Norway Finland
Source: HUI
18. Modern Times Group MTG AB
Nasdaq OMX Stockholm : MTGA, MTGB 18
Clear Objectives & Priorities
– Annual Organic Sales Growth of more
than 10%
– Operating Profit Margin of more than 20%
for Viasat Broadcasting (even excluding
associated company income)
– Increasing proportion of Emerging Market
Sales & Operating Income
– Generation of healthy ROE & ROCE
– Generation of healthy Total Shareholder
Returns
19. Modern Times Group MTG AB
Nasdaq OMX Stockholm : MTGA, MTGB 19
The Lean & Mean Broadcasting Machine
• Operationally geared growth company with balanced (advertising & subscription revenues)
& diversified (geographically) revenue mix
• Driving growth primarily through organic expansion & start-ups
• Challenger to incumbents in structurally evolving markets
• Successful multi-channel, multi-platform, multi-territory media house model
• Efficient integrated operating structure yields competitive advantage & synergies
• Investing healthy cash flows from Nordic region into emerging markets
• Strict cost control, cash management & capital allocation
• Strong & flexible financial position
• Delivering enhanced shareholder returns
20. Modern Times Group MTG AB
Nasdaq OMX Stockholm : MTGA, MTGB 20
For further information, please visit www.mtg.se or contact:
MTG Investor Relations
Tel: +44 7768 440 414 / +44 7791 138 486
Email: investor.relations@mtg.se