121030 mtg corporate presentation final
Post on 22-Oct-2014
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1
5 business segments
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
31 free-TV channels in 10 countries Satellite pay-TV platforms in 9 countries
Over 75 million mini-pay subscriptions in 31 countries
4
Revenues & EBIT
6%
15%
21% 21%
29%
34% 31%
15%
25% 29%
Total EBIT excluding discontinued DTV and CDON Group operations and one-offs; ROIC excluding non-recurring items.
Return on capital employed
A track record of profitable growth
SEK million
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* Margin
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
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!
Hours broadcast
Pay-TV Free-TV Channel Distribution On Demand
With multiple windows
7
*
8
Sweden – 1 Feb 2008
Denmark – 1 Nov 2009
Norway – 1 Dec 2009
Scandinavian TV landscape (2011)
Cable 52% Satellite
19%
DTT 19%
IPTV 9%
Cable 55%
Satellite 19%
DTT 7%
Analogue Terrestrial
20%
Scandinavian TV landscape (2005)
Digitalisation has changed the landscape forever
9
10
And fragmented the universe
SWEDEN DENMARK NORWAY
Competing for 162 viewing minutes per day
Competing for 198 viewing minutes per day
Competing for 166 viewing minutes per day
From one channel in 1987 to over 50 in 2012
130
140
150
160
170
180
190
200
Average TV Viewing per day (minutes)
2007 2011
+5 min
+50 min
+21 min
100120140160180200220240260280300
71% higher viewing in US & 29% higher viewing in UK when compared to average viewing of 175 minutes in Scandinavia 2011
Digitalization has increased viewing during last 4 years • Sweden: +3% (first to enact analogue shutdown) • Denmark: +34% • Norway: +14%
With potential to grow
BUT increased TV viewing
11
And driven TV ad market growth
12
-20%
-15%
-10%
-5%
0%
5%
10%
15%
20%
25%
2005 2006 2007 2008 2009 2010 2011 2012ESweden Denmark Norway USA UK Europe incl. Russia
0%
10%
20%
30%
40%
50%
0%
5%
10%
15%
20%
25%
TV Share of Ad Market
2008 2011
+2.1%
+2% +1.4%
94% higher TV share in US Market 45% higher TV share in UK Market compared to average TV share of 21% in Scandinavia 2011
TV Share in Scandinavia was growing from 2008 to 2011 • 2.1% in Sweden • 2% in Denmark • 1.4% in Norway
With potential to grow
13
As a % of the total Ad Market
60
70
80
90
100
110
120
2008 2009 2010 2011 2012E75%
80%
85%
90%
95%
100%
2008 2009 2010 2011 2012 ytd
14
With rising demand & prices
Market Sold Out Ratios in prime time Market cost per thousand (indexed)
Source: MTG research
0%
10%
20%
30%
40%
50%
60%
70%
80%
Bonnier MTG SBS
15
The MTG Media House
Average Weekly Reach (15-49)
2003 2011
Old & Male Old & Female
Young & Male Young & Female
Complementary Channel Profiles
Source: MMS
-2% +19% +8%
Source: MMS
0102030405060
MTG TV2 Group SBS
05
101520253035404550
MTG TV4 Group SBS
Commercial audience shares 15-49 target group
16
Sweden Denmark %
% Norway
0
10
20
30
40
50
60
70
MTG TV2 Group SBS
%
Media house CSOV (Q4 to date)
33.9
23.5 20.4
34.7
23.8
17.3
05
10152025303540
Sweden Denmark Norway2011 2012
And viewing is moving online & capturing a new audience
17
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
ComputerScreen
Mobile Phone TV-screen Tablet
92%
83%
1%
1%
16%
7%
Viewing platform
Traditional TV Web-TV Mobile-TV
Viewing by Device
Age 15-74
Age 15-24
+16%
+77%
+54%
+278%
Q1 2011 Q1 2012
Creating new revenue streams
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MS
EK
0
50
100
150
200
250
300
350
2009 2010 2011 2012e 2013e
Web TV advertising market
Where revenue per viewer and per hour are higher than in traditional linear TV Price = 2.8x higher online & even higher on mobile
-
10,000,000
20,000,000
30,000,000
40,000,000
50,000,000
60,000,000
70,000,000
2010 2011 2012 2013
Number of streams on MTG TV Play services
MTG has outperformed other commercial media houses and achieved as high as a 51% commercial share of online viewing
Online viewing shares
19
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39
SVT SBS MTG TV4
Con
sum
ed A
VOD
hou
rs
2012, Weeks
Source: MMS
TV4 numbers include TV4 premium viewing & clip sites + peak effect of Big Brother during Spring
With higher online share than linear Weeks 1-40, 2012
20
43%
Online share of commercial viewing
45%
21%
35% 38%
17%
Linear CSOV (15-49)
21
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
• Combined TV, Radio & Internet Ad sales packages • 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
And the regional opportunity
Source: IRM Media, Regional market report,2012 & MTG estimates
TV4, 84%
MTG, 9%
Other, 7%
Regional TV advertising (SEK 860 mn)
Print, 63% Direct advertising,
14%
Internet, 14%
Radio, 4% TV, 5%
Source: IRM Media, Regional market report, April 2011
-12.4%
+68.6%
+6.8%
+77.5%
-13.3%
-20%
0%
20%
40%
60%
80%
Print Television Radio Internet Directadvertising
Swedish regional advertising development
Where TV is again taking ad market share
22
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
2008 2009 2010 2011 2011 9M 2012 9M
Revenue EBIT EBIT margin
23
Lower growth But healthy margins
SEK thousands
24
25
A well-positioned portfolio
Estonia Latvia** Lithuania Czech Republic Bulgaria Hungary Ghana Russia
Position #1 #1 #1 #2 #2 #3 - #4
Combined commercial audience share* (target demographic)
40.7% (15-49)
60.6% (15-49)
40.2% (15-49)
40.4% (15-54)
28.4% (18-49)
8.2% (18-49)
18.8% (15-49)
8.7%*** (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
* As at Q3 2012 * * Including LNT channels from Q3 2012 * * CTC Media channel only
With scale operations in key markets
26
Financial performance (SEK million) (Baltics, Czech Republic & Bulgaria)
Commercial Audience Share
• Clear market leadership in Baltics with 47% pan-Baltic target group share of viewing • Completed acquisition of LNT free-TV group in Latvia in June 2012 • Investments in schedule & new Prima Love channel boosted target audience share in Czech Republic &
enabled advertising market share gains • Higher target audience share in Bulgaria enables market share gains • Ad markets have stabilised but not returned to sustained growth yet
-5%
0%
5%
10%
15%
20%
25%
30%
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
2008 2009 2010 2011 2011 9M 2012 9M
Revenue EBIT EBIT margin
0%
10%
20%
30%
40%
50%
60%
70%
2006 2007 2008 2009 2010 2011 2012 Q3
Estonia (15-49) Latvia (15-49)*
Lithuania (15-49) Czech Republic (15-54)
Bulgaria (18-49)
* Includes the consolidated LNT operations from Q3 2012
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
27
But low contact cost / ad spend
CPT dynamics (2011)
Source: MTG research 28
TV Ad spend per capita (SEK’000, 2011)
0.0
0.5
1.0
1.5
2.0
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
50
100
150
200
250
300
350
400
GDP TV Ad Market
20 Source: IMF, TNS/MTG estimates
0
1
2
3
4
5
6
7
8
9
10
Returning market opportunity
30
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
The African opportunity
31
Free-TV Channels
Pay-TV Channels
Production House
Well positioned For market recovery
32
-500
0
500
1,000
1,500
2,000
2,500
2006 2007 2008 2009 2010 2011 2011 9M 2012 9M
Revenue EBIT
33
34
Technology changes consumer behaviour
Owned & Operated Satellite Platform
Viasat Channels in 3rd Party Networks
Virtual Operator in 3rd Party Networks
Gatekeeper Independent
Internet Environment
35
Via…sat…ellite
Premium satellite ARPU (SEK)
Value-added services (000’s)
Premium satellite subscribers (000’s)
0
1,000
2,000
3,000
4,000
5,000
6,000
2006 2007 2008 2009 2010 2011 2012Q3
0100200300400500600700800
2006 2007 2008 2009 2010 2011 2012Q3
050
100150200250300350400
9M 2012dec-11dec-10dec-09dec-08dec-07
Multi-room PVR HD
• Premium satellite ARPU growth reflects price increases & penetration of VAS
• Increased competition in Denmark & change in subscriber mix in Norway negatively affecting premium satellite subscriber base
• Continued focus on offering – launch of new HD & catch-up channels / rebranding of Viasat Film – to moderate satellite subscriber decline & drive ARPU growth
Content leadership HD channels
36
• 11 new HD channels & 4 catch-up channels to be launched in Q4, following launch of 4 HD channels & 5 catch-up channels in Q1 & rebranding to Viasat Film
0
200
400
600
800
1,000
1,200
1,400
2006 2007 2008 2009 2010 2011 2012Q3
Premium satellite 3'rd party network
37
Sources: Viasat Broadcasting research
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
2012
38
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
Set -Top Box
PC/Mac
Mobile
Tablet Media Players
OTT Set-Top box
Game consoles Embedded
TV Set Applications
Taking further steps Launch of Viaplay Box
39
• Viaplay streaming box
• Viaplay to your TV
• 25 linear channels
• DTT connection
• Full-blown media center
* * *
*
* Available via terrestrial signal
*
39
Opens up a whole new universe
40
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
Content Leadership TV & Movies
Local titles
International titles
1’st Pay
2’nd Pay
Content Leadership Premium Sports Content
* In Sweden & Denmark
** In Denmark & Norway
* **
• Increasing investments in Nordic pay-TV content, premium channels and Viaplay online pay-TV service currently expected to result in Nordic pay-TV EBIT margin of approximately 15% in Q4 2012 and 10-12% for full year 2013. The total Nordic premium pay-TV subscriber base (excluding Viaplay) is currently expected to continue to decline in Q4 2012 and for the full year 2013 due to the ongoing decline in the DTH subscriber base and lower than anticipated growth in the third party network subscriber base, and result in stable quarter on quarter total Nordic pay-TV sales in Q4 2012 and stable year on year sales for the full year 2013. The fast growing Viaplay online pay-TV service is expected to continue to grow its subscribers and revenues throughout this period
Future sales growth to be driven by current investments
43
(SEK million)
0%5%10%15%20%25%30%35%40%45%50%
0500
1,0001,5002,0002,5003,0003,5004,0004,5005,000
2006 2007 2008 2009 2010 2011 2011 9M 2012 9M
Revenue EBIT EBIT margin
44
Expanding horizons
45
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Countries 7 11 15 22 23 24 25 25 28 31
Channels 2 3 5 6 7 8 10 15 19 23
Satellite platforms Baltics Ukraine Russia
46
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
0
10
20
30
40
50
60
1% 0% 2% 5% 5% 5% 3%
21%
29% 29%
0%
10%
20%
30%
40%
Russia Ukraine Poland Sweden WesternEurope
On-demand revenue Premium pay revenue
31,361 38,838
TV advertising market Pay TV market
0%
20%
40%
60%
80%
Cable DTH (pay) IPTV
47
Source: Screen Digest 2012
Pay-TV penetration Eastern Europe (%)
Relative TV market size (USD million)
Russia
Eastern Europe Western Europe
4,458
1,211
TV advertising market Pay TV market
9,414 7,296
Eastern Europe Growth drivers
Share of total pay-TV revenues
48
Seizing the Opportunity
Mini-pay subscriptions (millions) Viasat satellite subscribers Baltics, Ukraine, Russia (000’s)
0
100
200
300
400
500
600
2006 2007 2008 2009 2010 2011 2012Q3
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
2006 2007 2008 2009 2010 2011 2012Q3
49 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
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
New HD Channels Launched Russia, Ukraine, the CIS & Baltics
50
• All 3 channels available in Russia, Ukraine & CIS
• TV1000 Premium HD – Premium tier movie channel with focus on first run premieres of award winning films from Hollywood studios and independent local distributors
• TV1000 Megahit HD – Premium movie channel featuring first run premieres of the latest blockbuster titles from Hollywood and Russia
• TV1000 Comedy HD – dedicated to US comedy movies
Content from major Hollywood studios
Launch of UA.TV Utilizing growth opportunities
51
TV market structure (2011)
0%
5%
10%
15%
20%
25%
30%
35%
Cable DTH IPTV
58%
2% 1%
39%
Cable
DTH (pay)
IPTV
DTH (freeview)
Pay-TV market penetration (%)
• Substantial market opportunity – Europe’s 6th largest country by population
• Pay-TV penetration in 2011 is still low, at close to 19.5% of TV HHs
• Addressable market for DTH – 15.4 million non-cable HHs
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
0
100
200
300
400
500
600
700
800
900
1,000
2006 2007 2008 2009 2010 2011 20119M
20129M
Revenue EBIT
Investing in growth
52
Total segment revenue & EBIT (SEK million)
Revenue split 2011
44%
56%
Satellite Channels
• Increasing investments in Russian and Ukrainian pay-TV content, HD channels and pre-paid satellite service in Ukraine currently expected to boost Emerging Markets pay-TV revenue growth levels and result in segment operating losses of less than SEK 20 million in Q4 2012 and less than SEK 50 million for full year 2013
53
54
Cash is king
Net operating cash flow (SEKm)
Dividends received from CTC Media (SEKm)
0
20
40
60
80
100
120
140
Q12010
Q32010
Q12011
Q32011
Q12012
Q32012
0%
20%
40%
60%
80%
100%
0
500
1,000
1,500
2,000
2,500
Net operating cash flow % of EBITDA converted
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
55
(SEKm) (SEKm)
Net Debt Available Liquid Funds
Enables deleveraging
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
2000: Acquisition of 95% of Hungarian operation
2001: Acquisition of 75% of DTV in Russia
2002: Acquisition of 36% of CTC Media in Russia
2005: Acquisition of 50% of Prima TV in Czech Republic
2006: Acquisition of 100% of Slovenian operation
2007: Acquisition of 50% of Diema channels in Bulgaria
2008: Divestment of 100% of DTV to CTC in Russia
2008: Acquisition of 50% of satellite pay-TV platform in Ukraine
2008: Acquisition of 100% of Nova TV in Bulgaria
2010: Acquisition of 50% of satellite pay-TV platform in Russia
2010: Acquisition of additional 35% of Viasat Ukraine
2011: Distribution of 100% of CDON Group to MTG shareholders
2012: Divestment of 100% of Bet24.com
2012: Acquisition of 100% of LNT in Latvia
2012: Acquisition of 53% of Paprika Latino in CEE
2012: Acquisition of 80% of Zitius in Sweden
2012: Announced acquisition of 50% of TV 2 Sport in Denmark (closing subject to regulatory approval)
With complementary M&A Transactions to date
56
57
• 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
58
For Further Information, please visit www.mtg.se or contact:
MTG Investor Relations
Email: [email protected]
Nasdaq OMX: ‘MTGA’, ‘MTGB’
59