MTG reported financial results for Q1 2013. Key highlights include:
- Sales were up 2% year-over-year at constant FX rates, driven by strong growth in emerging markets.
- EBIT was SEK 454 million including SEK 235 million from associated companies.
- Net income was SEK 334 million, down from SEK 454 million in Q1 2012.
- Cash flow from operations was SEK 267 million including receipt of SEK 58 million in dividends from associated companies.
2. Forward looking statements
Forward-looking information and Safe Harbour Statement under the U.S. Private Securities Litigation
Reform Act of 1995
This report contains forward-looking information based on the current expectation of MTG management.
Although management deems that the expectations presented by such forward-looking information are
reasonable, such forward-looking information is subject to risks and uncertainties and no guarantee can be
given that these expectations will prove correct. Accordingly, the actual future outcome could vary considerably
when compared to what is stated in the forward-looking information, due to such factors as described above in
the Risks & Uncertainties section.
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4. Q1 2013
• Sales up 2% y-o-y at constant FX SEK mn
• Sales up 5% y-o-y at constant FX 3,500 40%
3,259 3,223
excluding closed & sold operations
35%
• OPEX up y-o-y at constant FX 3,000
• Following investments in the Nordic pay-TV 2,500
30%
businesses and within Emerging Markets
25%
• EBIT before associated income of SEK 219 2,000
(341) mn 20%
1,500
• Total EBIT of SEK 454 (542) mn including 15%
SEK 235 (201) mn of associated income 1,000
10%
• PTP of SEK 472 (591) mn
500 341
• Net income of SEK 334 (454) mn 219 5%
• EPS of SEK 4.73 (6.68) 0 0%
Q1 2012 Q1 2013
• Cash flow from operations of SEK 267 (334) mn
Revenue EBIT* EBIT margin
• Net cash position of SEK 17 mn (net debt * EBIT excluding associated income
position of SEK 1 mn in Q4 2012)
• Received SEK 58 (52) mn in quarterly dividends
from CTC Media
4
5. Forward Expectations
As previously announced, the Group continues to expect its Nordic pay-TV business to
grow its revenues at constant exchange rates in 2013, and to report an operating (EBIT)
margin of approximately 10-12% for the full year 2013. The segment margin is expected
to increase in 2014.
The Group also continues to expect its Emerging Market pay-TV operations to achieve a
breakeven EBIT result for the full year 2013 with rising profitability levels in 2014.
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7. Free-TV Scandinavia
Financial Highlights
SEK mn
1,200 50%
• Sales down 1% y-o-y at constant FX in Q1
1,024 45%
• Lower sales in Sweden and Norway 993
1,000
offset to an extent by higher sales & ad 40%
market gains in Denmark
35%
• Expected decline in both the 800
30%
Danish- and Swedish TV advertising
markets 600 25%
• Norwegian ad market expected to have 20%
continued to grow in Q1 400
15%
10%
• OPEX slightly up y-o-y at constant FX 200 158
127
5%
• EBIT margin of 12.8% (15.4%) in the quarter 0 0%
Q1 2012 Q1 2013
Revenue EBIT EBIT margin
7
8. Free-TV Scandinavia
Operating Highlights
Sweden
• The combined CSOV for the Swedish media Commercial Audience Share (15-49)
50%
house was significantly up q-o-q but slightly
down y-o-y 45%
• Improved ratings throughout Q1 & highest
combined CSOV ever of 35.2% (34.7%) for a 40%
month of March
35%
• Improvement follows success both from
recurring formats & new shows 30%
Denmark
25%
• Combined CSOV for the Danish media house
was up both y-o-y and q-o-q 20%
• TV3 CSOV boosted by distribution on Boxer’s
DTT platform & strong underlying performance 15%
• TV3 Sport 1 & TV3 Sport 2 added to media
10%
house sales from Q1
Norway
• Combined CSOV stable y-o-y & up q-o-q following
improved prime time ratings for TV3 Sweden Denmark Norway
• Higher y-o-y combined CSOV of 19.3% (18.6%)
in the month of March
• Third channel to be launched in H2 2013
8
9. Free-TV Scandinavia
Focused AVOD development
Nordic traffic levels growing & AVOD Key free-TV brands go online to drive
services are growing rapidly viewing & strengthen engagement
• Nordic traffic levels are growing
• Danish Q1 AVOD traffic higher than
total FY12 traffic
• Launch of clip site Viasatsport.se in
January 2013 & new music video portal
online
• Like.tv Second Screen app growing & to
be rolled out on more platforms in 2013
• MTG adapting content commission
strategies to leverage linear & online
assets
9 9
10. Pay-TV Nordic
Financial Highlights
• Sales up 3% y-o-y at constant FX SEK mn
• Consolidation of TV3 Sport channels in 1,400 1,310 50%
1,288
Denmark
45%
1,200
• OPEX up 10% y-o-y 40%
• Full consolidation of the TV3 Sport 1,000 35%
channels business, the launch of
new channel TV3 Sport 2 in Denmark, 30%
as well as ongoing investments in 800
premium movie and sports content 25%
and Viaplay
600
• EBIT margin of 11.1% (17.7%) in Q1 20%
400 15%
• The Group continues to expect its Nordic pay-TV
227 10%
business to grow its revenues at constant
exchange rates in 2013, and to report an 200 146
5%
operating (EBIT) margin of approximately 10-12%
for the full year 2013. The segment margin is
0 0%
expected to increase in 2014 Q1 2012 Q1 2013
Revenue EBIT EBIT margin
10
11. Pay-TV Nordic
Operating Highlights
Premium subscribers
1,200
• Viaplay reported record # of daily viewers
in Q1 following strong sports events 1,000
800
Thousands
600
• 3’rd party subscriber base up y-o-y but
400
slightly down q-o-q
200
0
• Danish offering strengthened through
several channel distribution agreements
Satellite subscribers 3'rd party network subscribers
• Premium satellite ARPU up 2% y-o-y and Value added services
slightly down q-o-q due to strengthening of
400
the Swedish krona 350
Thousands
300
250
200
• Positive y-o-y development due to 150
continued growth in the penetration and 100
pricing of value added services 50
0
11
ViasatPlus HDTV Multi-room
13. Free-TV Emerging Markets
Financial Highlights
• Both total Free-TV Emerging Markets sales & SEK mn Free-TV Emerging Markets
Baltic, Czech & Bulgarian sales up 25% y-o-y at 600
512
50%
constant FX
500 432 40%
• Sales cooperations in Czech Republic &
Bulgaria; healthy underlying growth & higher 400
30%
ad market shares in almost all territories 300
• OPEX significantly up y-o-y 20%
200
• Sales co-operations; further investments in
100 10%
programming; launch of Prima ZOOM & 26
consolidation of LNT in Latvia 8
0 0%
• Improved profitability y-o-y for the 6th consecutive Q1 2012 Q1 2013
quarter & more than tripled y-o-y Revenue EBIT EBIT margin
• Increased operating margin SEK mn Baltics, Czech Republic & Bulgaria
• Sales cooperation profitability more seasonal than 600 50%
478
MTG operations 500
393 40%
• Partners’ commercial inventory acquired at fixed 400
annual wholesale prices 30%
300
• Inventory sold as part of the media house 200
20%
offering at the seasonal price variations.
100 10%
27 38
0 0%
Q1 2012 Q1 2013
Revenue EBIT EBIT margin
13
14. Free-TV Emerging Markets
Operating Highlights
Baltics Commercial Audience Share
70%
• Sales up 23% y-o-y at constant FX
• Consolidation of LNT in Latvia & higher sales in 60%
Lithuania as well as underlying growth in Latvia
and Estonia 50%
• Increased Pan-Baltic commercial target 40%
audience share of 46.8% (40.5%)
30%
Czech Republic
• Sales up 29% y-o-y at constant FX 20%
• Barrandov sales cooperation, ad market share 10%
gains & successful launch of Prima Zoom
• CSOV up y-o-y following the launch of the Prima Zoom
channel
Estonia (15-49) Latvia (15-49)*
Bulgaria Lithuania (15-49) Czech Republic (15-54)
• Sales up 29% y-o-y at constant FX Bulgaria (18-49)
• Continued high ratings and the previously announced
advertising sales co-operations with nine international
channels
• Combined CSOV up significantly y-o-y following
* MTG has included the LNT channels in its reported combined CSOV in
continued successful performance of key locally
Latvia with effect from Q3 2012
produced shows
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15. Pay-TV Emerging Markets
Financial Highlights
• Sales up 10% y-o-y at constant FX in the SEK mn
quarter 300
• Continued healthy subscriber intake 260
251
• Growth across 3rd party networks in 250
Russia & Eastern Europe
200
• OPEX up 20% y-o-y in Q1 but stable q-o-q
• Previously announced investments in 150
premium content
• Launch of the HD Premium package in 100
Russia and Ukraine in Q4 12
50
34
• EBIT loss of SEK -1 (34) y-o-y in the quarter
0
-1
Q1 2012 Q2 2013
• Pay-TV Emerging Markets continue to be
expected to achieve a breakeven EBIT -50
result for the full year 2013 Revenue EBIT
15
16. Pay-TV Emerging Markets
Operating Highlights
Satellite subscribers
600
• 49,000 net new satellite subscribers added
y-o-y & q-o-q performance reflected usual
Thousands
seasonal effects following strong subscriber
500
intake in Q4
• Over 19 mn mini-pay added subscriptions
y-o-y 400
• Over 1 million subscriptions added
q-o-q
Satellite subscribers
• HD channel package sales progressing Mini-pay TV subscriptions
90,000
according to plan
• Already available on several leading 80,000
Thousands
networks
70,000
• Agreement with Inter Media Group to 60,000
include its Ukraine free-TV channels on
Viasat Ukraine platform 50,000
16 40,000
Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013
17. Russia & Ukraine
Plenty of room to grow
Russia – Pay-TV Satellite Ukraine – Pay-TV Satellite
Millions Households1 Thousands Households1
16 1,200
14
1,000
12
10 800
8 600
6
400
4
2 200
0 0
Russia - Cable & IPTV Households2 Ukraine - Cable & IPTV Households2
Millions Thousands
30
5,000
25
4,000
20
3,000
15
10 2,000
5 1,000
0
0
17
Source: Screen Digest 2013 data; 1: Including low-ARPU satellite like Tricolor; in Russia 2: Including social cable
18. The next step
HD Channel package & Viaplay
• Four exclusive key premium
content deals signed in Russia,
Ukraine & CIS
• New premium HD channel
package launched in Russia &
Ukraine
• Viaplay launched & available to
HD customers and on
independent basis
Exclusive Premium Content from major Hollywood Studios
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19. Other Businesses
Highlights
• Sales down 17% y-o-y at constant FX when SEK mn
excluding the contribution of the Bet24 450
operations, which were sold in May 2012, but 407
400
including the consolidation of the Paprika
Latino production company from 17 350
September 2012
300
• Norwegian radio sales up y-o-y
250 242
• Swedish radio sales down substantially y-o-y
200
• 20 NRJ licenses in Sweden no longer
operated by MTG from 1 Jan 13 150
• MTG Studios sales down y-o-y 100
• OPEX down y-o-y at constant FX excluding
50
impact of sold Bet24 operations
0
• Lower y-o-y costs for the MTG Studios Q1 2012 Q1 2013
operations -50 -14 -17
• Cost reductions in Swedish radio Revenue EBIT
operations
19
21. Income Statement
• Depreciation & amortisation up y-o-y to Q1 Q1
SEK 41 (28) mn (SEK mn) 2013 2012
• Net interest expenses of SEK -1 (-16) Net sales 3,223 3,259
mn due to lower borrowing levels in the
EBIT before associated company
period income
219 341
• Financial items of SEK 19 mn Associated company income 235 201
• Positive unrealised currency EBIT 454 542
exchange rate differences of
SEK 41 mn Net interest & other financial items 18 49
• Non-cash financial losses of Income before tax 472 591
SEK -13 (81) mn arising from
the change in value of the option Tax -138 -137
element of the SEK 250 mn Net income 334 454
CDON Group convertible bond
between the balance sheet dates Basic EPS 4.73 6.68
• Effective tax rate of 29% in Q1 Diluted EPS 4.73 6.66
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22. Cash Flow
• Cash flow from operations included receipt
of SEK 58 (52) million of dividend Q1 Q1
(SEK mn) 2013 2012
payments from CTC Media
• The Group made no investments in shares Cash flow from operations 267 334
during the first quarter of 2012 or 2013
• CAPEX of SEK 47 (23) mn in the quarter, Changes in working capital -190 -269
equivalent to 1% of Group net sales for the
quarter Net cash flow from
77 65
operations
• Cash flow from investing activities of
SEK -47 (1) mn in Q1 Cash flow used in investing
-47 1
activities
Cash flow used in financing
-225 54
activities
Net change in cash & cash
-195 120
equivalents
22
23. Financial Position
• Total borrowings of SEK 708 (1,603) mn as at 31 31 Mar 31 Mar
Mar 2013 (SEK mn) 2013 2012
• Cash & cash equivalents of SEK 509 (583) mn Non-current assets 6,125 5,683
• Net cash of SEK 17 mn as at 31 Mar 2013 Current assets 5,655 5,785
• Net debt position of SEK 733 million at the Total assets 11,780 11,468
end of Q1 2012 & available liquid funds of
SEK 6,459 (5,640) mn
Shareholders’ equity 5,377 4,744
• SEK 2,053 (1,869) mn book value of 37.9%
shareholding in CTC media & public equity market Long-term liabilities 1,471 2,220
value of 4,607 mn as at the last business day of
March 2013 Current liabilities 4,931 4,504
Total equity & liabilities 11,780 11,468
Net debt / EBITDA ratio
1.2 1.2
1.1
0.8
0.7 0.7
0.6
0.3 0.3 0.3 0.3
0 -0.01
23 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
10 10 10 10 11 11 11 11 12 12 12 12 13
25. Summary
• Strong sales performance in free-TV Emerging Markets driven by
sales cooperations, underlying growth & new channel
• Largest free-TV media house on a quarterly basis in the Czech
Republic for the first time
• Continued investments in pay-TV operations & outlook reiterated
• Audience shares stabilising across the board & improvements in
March
• Taking advertising & audience shares in Denmark
• Viaplay subscriber base is growing & record viewing levels for key
sports events during Q1
• Net cash position provides flexibility for both organic and M&A driven
growth
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26. For further information, please visit www.mtg.se or contact:
MTG Investor Relations
Tel: +46 (0) 73 699 2714
Email: investor.relations@mtg.se
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