Modern Times Group is a leading entertainment company that shapes the future of entertainment through content, digital services, and geographic expansion. It has a successful track record of growth and is well-positioned for continued future success. MTG has a unique platform as an integrated and diversified entertainment provider across TV, digital, and emerging markets. It will continue to invest in content, digital growth, and geographic expansion to create long-term value.
2. THE STORY
A SUCCESSFUL TRACK
RECORD (10Y)
A UNIQUE PLATFORM
A BRIGHT FUTURE
INTEGRATED &
DIVERSIFIED
RISING VIDEO
CONSUMPTION
25% ROCE (AV)
TV EVERYWHERE &
FOR EVERYONE
CONTENT RICH
15% TSR CAGR
DECENTRALIZED
10% SALES CAGR
17% EBIT CAGR
DIGITAL DELIVERY &
ENGAGEMENT
2
3. LONG TERM VALUE CREATION
BASED ON CLEAR GROWTH STRATEGY
CONTENT
DIGITAL
GEO EXPANSION
Multi-platform & country content
acquisition & monetization strategy
Leading content creator, producer &
distributor
First to market full service SVOD
OTT operator & leading AVOD player
+ wide range of new products &
services
Focus on roll-out of new products to
existing markets + expansion in CEE
& Africa
3
4. CONTENT REMAINS KING
WE ARE THE BIGGEST BUYER IN TOWN
TOTAL NUMBER OF BROADCAST HOURS (2013)
1,000,000
900,000
879,470
800,000
700,000
600,000
481,800
500,000
394,200
400,000
297,840
300,000
236,520
210,240
CME
Pro7
200,000
100,000
0
MTG
RTL
Bonnier
Mediaset
Source: MTG Research
4
6. OUR IN-HOUSE STUDIOS BUSINESS
HAS QUADRUPLED IN SIZE
TOP 5 TV PRODUCERS IN THE NORDICS
(BY SALES 2012)
TOP 10 CONTENT DISTRIBUTORS
(RATED BY UK INDEPENDENT TV PRODUCERS)
HIGHEST RATED
1
BBC WW
1
BBC WW
2
ITV Global
2
DRG
3
DRG
3
Zodiak Rights
3
Zodiak Rights
4
ITV Global
3
Shine
5
Fremantle Enterprises
6
Fremantle Enterprises
6
Endemol WW
6
Endemol WW
7
Electric Sky
6
DCD Media
8
Passion Distribution
6
+
MOST USED
All3Media
9
All3Media
10
Passion Distribution
9
Sky Vision
Source: Televisual Distributor Poll, September 2013
#1 IN THE NORDICS…EXPANDING EMERGING MARKETS
FOOTPRINT…GLOBAL DISTRIBUTION CAPABILITY
6
8. VIDEO CONSUMPTION IS GROWING
VIDEO USAGE IN THE USA – MINUTES PER DAY PER USER (2+)
350
358
357
365
+18%
CAGR
337
NON – LINEAR
323
NON-LINEAR
ONLINE VIDEO
MOBILE VIDEO 1
TIME SHIFTED 2
+1%
CAGR
LINEAR
TRADITIONAL
LINEAR TV
Q1 ’08
Q1 ’09
Q1 ’10
Q1 ’11
Q1 ’12
Q1 ‘13
1 Data for Q1 2008 as of May 2008; Mobile video data referring to watching Video via phone
2 Data for all TV households (significantly higher for household that own a DVR)
SOURCE: Nielsen Cross Platform reports
8
10. DEVELOPING FAST
WITH A WIDE RANGE OF DIGITAL PRODUCTS
ViaPlay Premium VOD
TV, Movies and Sports
Free VOD TV Channels
Ad Financed Services
Free VOD Sport Clips
Ad Financed Service
Free Music Streaming
Ad Financed Service
Mobile TV Companion
2nd Screen Application
Download Games Store
Transaction Service
Klipster Coupon Service Online
to Store App
Vertical video content sites
style, family, food, cool etc.
10
11. MTGX - THE GROUP PLATFORM
TO ACCELERATE DIGITAL GROWTH
xPLAY
xVENTURES
xCREATIONS
xLABS
Viaplay
TV play
Sports
Music
Games
Like.TV
Mobisodes
Webisodes
TV extensions
Web / Apps
Social
Sign-on
(World class VOD)
(Build portfolio of services)
(Digital first productions)
(Digital development)
11
12. BUT EACH MARKET IS DIFFERENT
DIGITALISATION TIMELINE
TV AD MARKET SIZE (USD MN)
4,448
CZECH
RUSSIA
REPUBLIC
CZECH
REPUBLIC
401
SWEDEN
2007
2012
2015
BROADBAND PENETRATION
Czech
849
Sweden
PAY–TV PENETRATION
87%
86%
63%
45%
40%
Russia
Russia
37%
Czech
Sweden
Czech
Russia
Sweden
12
13. HUGE POTENTIAL
DIGITAL DECISION TIME FOR 150 MILLION RUSSIANS
38% OWNERSHIP IN CTCM
EUROPE'S BIGGEST TV AD
MARKET IN 2015
OWN 5 OUT OF TOP 20 PAY
CHANNELS INC. TOP 2 – MORE
THAN 60 MN SUBSCRIPTIONS
HD PREMIUM PACKAGE ROLL-OUT
13
14. THE NEXT BIG THING
SSA = 7/10 FASTEST GROWING ECONOMIES 2011-15
#2 FREE-TV CHANNEL IN
GHANA & SOON TO LAUNCH IN
TANZANIA
PAY-TV CHANNELS NOW
AVAILABLE IN 6 COUNTRIES
ESTABLISHED CONTENT
PRODUCTION & DISTRIBUTION
PLAYER
14
15. WE CAN CONTINUE TO INVEST
DUE TO OUR ASSET LIGHT & CASH GENERATIVE SET-UP
NET DEBT (SEK MN)
STRONG CASH FLOW GENERATION (SEK MN)
2,500
4,000
3,500
2,000
3,000
2,500
1,500
2,000
1,000
1,500
1,000
500
500
0
2008
2009
2010
2011
2012
Sep-2013
0
2004 2005 2006 2007 2008 2009 2010 2011 2012 LTM
15
17. Q3 2013 – HIGHLIGHTS
INVESTING IN MOMENTUM
Sales up 9% at constant FX - all 5 segments reported local currency sales growth for first time since Q1 2011
FTV Scandi – growing again on a combined basis & positive traction to Fall schedules (new channel coming in Norway)
FTV EM – advertising market share gains in almost all territories in soft markets (new channel coming in Tanzania)
PTV Nordic – rising Viaplay volumes & Viasat ARPU driving sales growth & operating margin of 11.9%
PTV EM – healthy sales growth driven by mini-pay Russia & profitability in line with ongoing HD roll-out
Acquisition of Nice Entertainment establish MTG Studios as a scale international content production & distribution player +
MTGx digital accelerator established
Continued strong cash flow generation & low gearing enable ongoing investment in growth & shareholder returns
Coverage of the Winter Olympics will boost sales and adversely impact Q1 2014 profits for both the Nordic pay-TV and
Scandinavian free-TV businesses
17
18. Q3 IN FIGURES
GROWTH & INVESTMENTS
Sales up 9% y-o-y at constant FX
Q3 in brief
2012
Jul-Sep
2013
Jul-Sep
2,940
3,204
Growth (at constant FX)
-1%
9%
288
162
9.8%
5.0%
422
289
14.4%
9.0%
Organic growth at 5%
Sales (SEKm)
EBIT margin (excl. associates) of 5.0%
OpEx up 15% at constant FX and 11% organically
EBIT excl. associates
Significant investments in Nordic & Emerging Markets pay-TV
businesses to drive future growth
EBIT margin excl. associates
Continued strong cash conversion
Total EBIT
Total EBIT margin
Working capital change in the quarter reflecting the timing of
programming payments. Still under strict control
Cash flow from operations
237
210
Dividend stream from CTC Media of SEK 62m (51)
Changes in working capital
65
-160
Acquisition of DRG, Novemberfilm and Net info
Net cash flow from operations
302
49
18
19. FREE-TV SCANDINAVIA
GROWTH BACK INTO POSITIVE TERRITORY
STABLE SALES (Y-O-Y) AT CONSTANT FX
EBIT (SEK MN) AND EBIT MARGIN (%)
12%
10%
8%
6%
4%
2%
0%
-2%
-4%
-6%
-8%
-10%
250
25%
200
20%
15.4%
150
13.3%
15%
Q3 2013
Q2 2013
Q1 2013
Q4 2012
Q3 2012
Q2 2012
Q1 2012
Q4 2011
Q3 2011
Q2 2011
100
10%
50
5%
0
0%
Q3 2012
EBIT
Q3 2013
EBIT margin
OPEX GROWTH (FY 13) STILL EXPECTED TO BE AT THE HIGHER END
OF THE MID-SINGLE DIGIT PERCENTAGE RANGE
19
20. FREE-TV SCANDINAVIA
WEAK START BUT STRONG ENDING TO THE QUARTER
CSOV (15-49) – Q3 2013 VS Q3 2012
40.0
35.0
30.0
25.0
20.0
15.0
10.0
5.0
0.0
CSOV (15-49) – 2006 TO 2013 (YTD)
40
35.8 34.7
35
25.8
21.6
30
18.5 17.3
25
20
15
10
Sweden
Q3 2012
Denmark
Norway
Q3 2013
2006
2007
Sweden
2008
2009
2010
2011
Denmark
2012 9m 2013
Norway
WITH FURTHER OPPORTUNITIES – HOWEVER THERE IS A
LAG BETWEEN AUDIENCE SHARES AND AD SHARES
20
21. FREE-TV EMERGING MARKETS
STRONG GROWTH – TOUGHER COMPS AHEAD
21% SALES GROWTH (Y-O-Y) AT CONSTANT FX
EBIT (SEK MN) AND EBIT MARGIN (%)
30%
3.8%
50
20%
8%
6%
100
25%
4%
2%
15%
0
10%
0%
-50
5%
Q3 2013
Q2 2013
Q1 2013
Q4 2012
Q3 2012
Q2 2012
Q1 2012
Q4 2011
Q3 2011
Q2 2011
0%
-5%
7.9%
150
35%
-2%
-100
-4%
Q3 2012
9m 2012
EBIT
Q3 2103
9m 2013
EBIT margin
IMPROVED PROFITABILITY BUT CONTINUED INVESTMENTS
AT THE SAME TIME AS GROWTH IS EXPECTED TO MODERATE
21
22. FREE-TV EMERGING MARKETS
AUDIENCE SHARE GAINS IN ALMOST ALL MARKETS
CSOV (15-49) – (%)
60
50
TV AD MARKETS IN MTG TERRITORIES
47.0 50.0
40.4
40
28.4
30
32.8
36.0
20
10
0
Baltics
Bulgaria
Q3 2012
Czech Rep.
10
9
8
7
6
5
4
3
2
1
0
Q3 2013
SEK
8.6 bn
2008
SEK
5.4 bn
2012
SEK 3.2 BN OR 60% GROWTH POTENTIAL IF WE
SEE A FULL RECOVERY IN THE TV AD MARKET
22
23. PAY-TV NORDIC
PROFITABILITY INLINE WITH EXPECTATIONS
7% SALES GROWTH (Y-O-Y) AT CONSTANT FX
EBIT (SEK MN) AND EBIT MARGIN (%)
12%
300
10%
250
8%
200
6%
150
4%
100
2%
50
Q3 2013
Q2 2013
Q1 2013
Q4 2012
Q3 2012
Q2 2012
Q1 2012
Q4 2011
Q3 2011
Q2 2011
0%
20%
15.9%
15%
11.9%
10%
5%
0
0%
Q3 2012
EBIT
Q3 2013
EBIT margin
LOOK FOR A MARGIN OF 11-12% FOR 2013 AND
HIGHER MARGIN 2014 DESPITE THE WINTER OLYMPICS
23
24. PAY-TV NORDIC
VIAPLAY VOLUME & VIASAT ARPU GROWTH
PREMIUM SUBSCRIBER DEVELOPMENT (‘000)
ARPU FOR PREMIUM DTH (SEK) - ANNUALIZED
1,200
5,200
1,000
5,000
800
4,800
600
400
4,600
200
4,400
Satellite subscribers
3'rd party network subscribers
Q3 2013
Q2 2013
Q1 2013
Q4 2012
Q3 2012
Q2 2012
0
4,200
4,000
Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
2011 2011 2011 2012 2012 2012 2012 2013 2013 2013
OVERALL SUBSCRIBER BASE UP IF YOU INCLUDE
VIAPLAY BUT PREMIUM DTH DOWN AS ANTICIPATED
24
25. PAY-TV NORDIC
OTT OPENS UP A NEW WORLD
PC/MAC
SMART
PHONES
TABLETS
OVER THE TOP
9 MN
HOUSEHOLDS
+ VIRTUAL OPERATOR
GAME
CONSOLES
SMART TVSETS
4.2 MN
HOUSEHOLDS
TV SET-TOP
BOXES
OTT STB
DTH
1.6 MN
HOUSEHOLDS
FIRST TO MARKET DRIVEN BY AN EARLY DECISION TO HAVE A
PLATFORM AGNOSTIC APPROACH
25
26. PAY-TV EMERGING MARKETS
RUSSIA DRIVES GROWTH & INVESTMENTS
7% SALES GROWTH (Y-O-Y) AT CONSTANT FX
EBIT (SEK MN) AND EBIT MARGIN (%)
25%
80
25%
70
20%
60
50
15%
20%
17.9%
15%
40
10%
9.7%
30
20
5%
5%
10
0
Q3 2013
Q2 2013
Q1 2013
Q4 2012
Q3 2012
Q2 2012
Q1 2012
Q4 2011
Q3 2011
Q2 2011
0%
10%
0%
Q3 2012
EBIT
Q3 2013
EBIT margin
EXPECT TO ACHIEVE A BETTER THAN BREAKEVEN EBIT RESULT FOR FY13
WITH RISING PROFITABILITY LEVELS IN 2014
26
27. PAY-TV EMERGING MARKETS
CONTINUED STRONG SUBSCRIPTION GROWTH
SUBSCRIBERS / SUBSCRIPTIONS (‘000)
INVESTING INTO THE HD MARKET IN THE CIS
100
90
80
70
60
50
40
30
20
10
0
700
600
500
400
300
200
100
0
2004 2005 2006 2007 2008 2009 2010 2011 2012 9m
2013
Mini-Pay subscriptions (million)
DTH ('000)
395
RUB
($13)
=
ADDED ALMOST 16 MILLION MINI-PAY
SUBSCRIPTIONS SINCE LAST YEAR TO A TOTAL OF 91 MILLION
27
28. PAY-TV EMERGING MARKETS
MARKETS DRIVEN BY PENETRATION & DIGITALIZATION
DIGITAL PAY-TV HOUSEHOLDS (MILLIONS)
IN EASTERN EUROPE
RUSSIA & UKRAINE: PREMIUM PAY REVENUES
EXPECTED TO THREEFOLD (MILLIONS USD)
35
30
24
25
30
15
12
1
2
2006
2007
10
4
6
15
300
269
250
21
20
212
200
18
161
150
9
114
100
50
8
13 20
40
65 58 64 70
WE OWN 5 OUT OF THE TOP 20 PAY CHANNELS
IN RUSSIA INCLUDING THE TOP TWO
Note: Measured by Average Monthly Reach
28
2017
2016
2015
2014
2013
2012
2011
2010
2009
2008
2007
2006
2017
2016
2015
2014
2013
2012
2011
2010
2009
2008
2005
0
0
2004
5
27
322 334
350
30. SUMMARY
SHAPING THE FUTURE OF ENTERTAINMENT
Accelerated sales growth following investments in content, digital and geographical expansion
Established Nordic free & pay-TV operator with leading online positions
Expanding emerging market presence + largest shareholder in CTC Media
Scale content production & distribution arm + MTGx digital accelerator
Commitment to growth & shareholder returns supported by high cash conversion & low gearing
30
31. THANK YOU!
MTG INVESTOR RELATIONS
FOR FURTHER INFORMATION, PLEASE VISIT
WWW.MTG.SE, TEL: +46 (0) 73 699 2714 OR
EMAIL: INVESTOR.RELATIONS@MTG.SE
31