2015 q2 earnings call presentations2.q4cdn.com/384102709/files/doc_presentations/2015/... · 2015....

Q2 2015EARNINGS CALL PRESENTATION

CAUTIONARY LANGUAGE

This presentation contains forward-looking statements, including those relating to our capital needs, business strategy, expectations and intentions. Statementsthat use the terms “believe”, “anticipate”, “trend”, “expect”, “plan”, “estimate”, “forecast”, “intend” and similar expressions of a future or forward-looking natureidentify forward-looking statements for purposes of the U.S. federal securities laws or otherwise. For these statements and all other forward-looking statements,we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.

Forward-looking statements are inherently subject to risks and uncertainties, many of which cannot be predicted with accuracy or are otherwise beyond ourcontrol and some of which might not even be anticipated. Forward-looking statements reflect our current views with respect to future events and because ourbusiness is subject to such risks and uncertainties, actual results, our strategic plan, our financial position, results of operations and cash flows could differmaterially from those described in or contemplated by the forward-looking statements contained in this report.

Important factors that contribute to such risks include, but are not limited to, those factors set forth under "Risk Factors” as well as the following: the success ofour efforts to increase our revenues and recapture advertising market share in the Czech Republic; levels of television advertising spending and the rate ofdevelopment of the advertising markets in the countries in which we operate; the effect of global economic uncertainty and Eurozone instability in our marketsand the extent, timing and duration of any recovery; the extent to which our liquidity constraints and debt service obligations restrict our business; our ability torefinance our existing indebtedness; our exposure to additional tax liabilities; our success in continuing our initiatives to diversify and enhance our revenuestreams; our ability to make cost-effective investments in television broadcast operations, including investments in programming; our ability to develop and acquirenecessary programming and attract audiences; changes in the political and regulatory environments where we operate and application of relevant laws andregulations; and the timely renewal of broadcasting licenses and our ability to obtain additional frequencies and licenses.

The foregoing review of important factors should not be construed as exhaustive and should be read in conjunction with other cautionary statements that areincluded in our filings. For a more detailed description of these uncertainties and other features, please see the “Risk Factors” section in our most recent QuarterlyReport on Form 10-Q filed with the U.S. Securities and Exchange Commission. Forward-looking statements speak only as of the date on when they were madeand we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future developments orotherwise.

Non-GAAP Financial MeasuresCME reports its results in accordance with generally accepted accounting principles in the United States (“GAAP”). However, management believes that certainnon-GAAP performance measures used in managing the business may provide meaningful information about underlying trends in our business. Non-GAAPfinancial measures should be viewed in addition to, and not as an alternative for, CME’s reported results prepared in accordance with GAAP. Please see theattached Financial Review appendix for a reconciliation to the most directly comparable GAAP financial measures. OIBDA, which includes amortization andimpairment of program rights, is determined as operating income before depreciation, amortization of intangible assets and impairments of assets and certainunusual or infrequent items that are not considered by our chief operating decision makers when evaluating our performance.

2

MANAGEMENT ATTENDING THE CALL

Michael Del Nin – Co-Chief Executive Officer

Christoph Mainusch – Co-Chief Executive Officer

David Sturgeon – Chief Financial Officer

Daniel Penn – General Counsel

Mark Kobal – Head of Investor Relations

3

Net Revenues

200

150

100

50

0Q2 2014 FX Q2 2014@2015 rates Q2 2015

192.8

(37.7)

155.1166.8

CONSOLIDATED REVENUES AND OIBDA

US$ m US$ m

OIBDA

80

60

40

20

0

-20Q2 2014 FX Q2 2014@2015 rates Q2 2015

40.8

(8.2)

32.6

46.8

4

Q2 2015 AUDIENCE PERFORMANCE OVERVIEW

Variance in percentage points1 Source: Local TV data provider, all shares in main channel sales target group.

2014 2015

Q2 All Day Audience Share

50%40%30%20%10%

0%

Bulgaria Croatia Czech Republic Romania Slovak Republic Slovenia

33.2% 26.7%35.8%

25.5% 32.4% 35.3%40.2%27.5%

36.9%26.3% 29.9% 36.3%

1

2014 2015

Q2 Prime Time Audience Share

50%40%30%20%10%

0%


37.1% 33.5% 39.9%30.5% 33.9%

43.0%44.8%35.5% 40.9% 32.9% 31.7%

44.0%

1

+1.0

+2.0+1.0

+2.4 -2.2+1.0

+7.0+0.8

+1.1+0.8

-2.5

+7.7

5

Q2 2015 REVENUES BY SEGMENT

US$ m

Net Revenues

Q2 2014 Q2 2015

Variance

Actual % Lfl %1

Bulgaria 23.9 19.4 (18.8)% 0.9%

Croatia 19.5 16.2 (16.6)% 4.1%

Czech Republic 59.3 52.1 (12.1)% 9.0%

Romania 49.4 44.0 (10.9)% 11.0%

Slovak Republic 24.2 20.2 (16.4)% 3.8%

Slovenia 17.6 15.1 (14.3)% 6.5%

Intersegment revenues (1.1) (0.3) NM 2 NM 2

Total net revenues 192.8 166.8 (13.5)% 7.5%

¹ Like-for-Like currency variance reflects the impact of applying the current period average exchange rates to the prior period revenues.² Number is not meaningful.

The percentage growth figures have been derived from data included in our Form 10-Q for the period ended June 30, 2015.

6

Q2 2015 OIBDA BY SEGMENT

US$ mOIBDA

Q2 2014 Q2 2015Variance

Actual% Lfl%¹Bulgaria 5.6 4.0 (28.2)% (10.9)%

Croatia 4.9 5.0 2.4 % 27.7 %

Czech Republic 20.7 24.2 17.1 % 45.1 %

Romania 11.8 15.4 31.0 % 63.2 %

Slovak Republic 3.1 3.6 18.5 % 46.5 %

Slovenia 2.7 1.0 (64.2)% (55.2)%

Eliminations (0.1) 0.0 NM 2 NM 2

Operations sub-total 48.7 53.3 9.5 % 35.9 %

Central costs (7.8) (6.5) 17.5 % 2.7 %

Total 40.8 46.8 14.7 % 43.7 %¹ Like-for-Like currency variance reflects the impact of applying the current period average exchange rates to the prior period revenues and costs.² Number is not meaningful.


7

8

50

45

40

35

30

39.9 40.9

Czech Republic: Q2 2015 performance

US$ m Q22014

Q22015 % Act % Lfl¹

TV advertising revenues 54.0 48.1 (10.9)% 10.5 %

Carriage fee &subscription revenues 2.0 2.0 (0.2)% 23.8 %

Other revenues 3.3 2.0 (38.4)% (23.6)%

Net revenues 59.3 52.1 (12.1)% 9.0 %

Total costs 38.6 27.9 (27.7)% (10.4)%

OIBDA 20.7 24.2 17.1 % 45.1 %

¹ Like for-Like currency variance reflects the impact of applying the current period averageexchange rates to the prior period revenues and costs.

Source: ATO - Nielsen Admosphere; Mediaresearch (all audience share and leadershipdata is for the 15-54 target group). TV ad market share represents CME’s internalestimates.

+1.0

50

45

40

35

30

35.8 36.9

+1.1

Q2 2014 Q2 2015

Prime Time Audience ShareAudience Share

All Day Audience Share

Q2 2015 Financials

Prima Group: 27%

CME Group: 60%

CT Group: 6%

Others: 7%

Market Share TV Ad Market Share (CME Group) Q2 2015 TV Ad Market Share

Market Share

Q2

58%60% 61% 60% 60%

2014 2015 Q3 Q4 Q1 Q2

US$ m Q22014

Q22015 % Act % Lfl¹



Other revenues 2.3 1.1 (52.6)% (41.2)%

Net revenues 49.4 44.0 (10.9)% 11.0 %

Total costs 37.6 28.6 (24.0)% (5.4)%

OIBDA 11.8 15.4 31.0 % 63.2 %

40

35

30

25

20

15

30.532.9

9

Romania: Q2 2015 performance

Q2 2015 Financials

+2.440

35

30

25

20

15

25.5 26.3

+0.8

Intact Group: 22%

CME Group: 63%

Prima Group : 2%

Others: 7%

Q2 2014 Q2 2015



TV Ad Market Share (CME Group) Q2 2015 TV Ad Market Share Market Share

Kanal D: 6%

¹ Like for-Like currency variance reflects the impact of applying the current period average exchange ratesto the prior period revenues and costs.

Source: Kantar Media (all audience share and leadership data is for the 18-49 Urban target group). TV admarket share represents CME’s internal estimates.

Q2

61%63% 63% 63% 63%

2014 2015 Q3 Q4 Q1 Q2


Source: PMT / TNS SK (all audience share and leadership data is for the 12-54 targetgroup). TV ad market share represents CME’s internal estimates.

45

40

35

30

25

33.931.7

10

Slovak Republic: Q2 2015 performance

Q2 2015 Financials

US$ m Q22014

Q22015 % Act % Lfl¹


Carriage fee &subscription revenues 0.3 0.4 34.3 % 66.7 %

Other revenues 1.6 1.1 (30.2)% (13.3)%

Net revenues 24.2 20.2 (16.4)% 3.8 %

Total costs 21.1 16.6 (21.5)% (2.4)%

OIBDA 3.1 3.6 18.5 % 46.5 %

-2.2

45

40

35

30

25

32.429.9

-2.5

RTVS: 4%

CME Group: 64%

JOJ Group: 30%

Q2 2014 Q2 2015




Q2

67%70%

64%

69%

64%

Q3 Q4 Q1 Q2 2014 2015

Other: 2%


Source: GARB (all audience share and leadership data is for the 18-49 target group).TV ad market share represents CME’s internal estimates. 11

CME Group: 58%

50

45

40

35

30

25

37.1

44.8

Bulgaria: Q2 2015 performance

Q2 2015 Financials

US$ m Q22014

Q22015 % Act % Lfl¹

TV advertising revenues 17.3 13.9 (20.0)% (0.6)%


Other revenues 1.5 1.1 (29.3)% (12.1)%

Net revenues 23.9 19.4 (18.8)% 0.9 %

Total costs 18.3 15.4 (15.9)% 4.5 %

OIBDA 5.6 4.0 (28.2)% (10.9)%

+7.750

45

40

35

30

25

33.2

40.2

+7.0

Others: 3%

BNT Group: 3%

MTG Group: 36%

Q2 2014 Q2 2015




Q2

56% 56%

61%

56%58%

Q3 Q4 Q1 Q2 2014 2015


Source: AGB Nielsen Media Research (all audience share and leadership data is for the18-54 target group). TV ad market share represents CME’s internal estimates. 12

40

35

30

25

20

33.535.5

Croatia: Q2 2015 performance

Q2 2015 Financials

US$ m Q22014

Q22015 % Act % Lfl¹



Other revenues 1.0 1.0 (1.0)% 23.5 %

Net revenues 19.5 16.2 (16.6)% 4.1 %

Total costs 14.6 11.2 (22.9)% (3.7)%

OIBDA 4.9 5.0 2.4 % 27.7 %

+2.040

35

30

25

20

26.7 27.5

+0.8

HTV Group: 8%

CME Group: 55%

RTL Group: 37%

Q2 2014 Q2 2015

Audience Share


All Day Audience Share Prime Time Audience Share

Q2

53%

57% 56% 56% 55%

2014 2015 Q3 Q4 Q1 Q2

13

50

45

40

35

30

43.0 44.0

Slovenia: Q2 2015 performance

Q2 2015 Financials

US$ m Q22014

Q22015 % Act % Lfl¹



Other revenues 1.4 0.9 (39.0)% (24.3)%

Net revenues 17.6 15.1 (14.3)% 6.5 %

Total costs 14.9 14.1 (5.3)% 17.5 %

OIBDA 2.7 1.0 (64.2)% (55.2)%

+1.050

45

40

35

30

35.3 36.3

+1.0

CME Group: 78%

Q2 2014 Q2 2015




Pink SI: 1%

State TV Group: 11%

Planet TV Group: 8%


Source: AGB Nielsen Media Research (all audience share and leadership data is for18-54 target group. TV ad market share represents CME’s internal estimates.

Other: 2%

Q2

76%73%

81%

76%78%

Q3 Q4 Q1 Q2 2014 2015

DEBT MATURITY PROFILE AND FREE CASH FLOW

14

1,000

800

600

400

200

02015 2016 2017 2018 2019

2017 Term Loan 2017 PIK NotesReplacement facility for2015 Convertible notes4 2017 Euro Term Loan

2614 281

4673

362

Pro Forma maturity as at June 30, 2015(US$ m)1

Liquidity available from RCF: US$ 115 million

1 Debt in currencies other than US$ are translated at FX rates as at June 30, 2015. ² Includes PIK interest to June 30, 2015.3 Excludes PIK interest from June 1, 2015.4 Assumes the replacement facility under the Commitment Letter provided by Time Warner is used to refinance the 2015 Convertible Notes at or immediately prior to their maturity in November 2015.

Components of free cash flow (US$ m)

Six months ended June 30, Variance2014 2015OIBDA 37 58 21Change in working capital 2 7 5Interest, taxes, and other (55) (19) 36Net investment in programming 3 (5) (8)

Capex (14) (14) —

Total (27) 27 54

BUSINESS OUTLOOK

Based on our view today, we expect:

• OIBDA growth of 45% to 55% at constant rates.

• Free cash flow, excluding charges not included in OIBDA, of

US$ 45 million to US$ 55 million at actual rates.

The outlook above does not include the impact of any unplanned restructuring and severance

charges, the impact from the potential sale of operating assets other than those already presented as

discontinued operations, or settlement of litigation that may occur from time-to-time due to

management decisions and changing business circumstances.

15

Appendix

EARNINGS CALL

16

YTD AUDIENCE PERFORMANCE OVERVIEW

Variance in percentage points1 Source: Local TV data provider, all shares in main channel sales target group. YTD periods are the six months ended June 30, 2015 and 2014.

2014 2015

YTD All Day Audience Share

50%40%30%20%10%

0%


33.8% 27.2% 35.8%25.9% 33.2% 34.6%39.8%

27.2%37.3%

26.0% 31.1% 35.4%

1

2014 2015

YTD Prime Time Audience Share

50%40%30%20%10%

0%


38.5% 33.7% 40.6%31.5% 35.2% 43.6%44.4%

35.5% 41.8%32.9% 33.6%

44.9%

1

+0.8

+1.8 +1.2

+1.4 -1.6 +1.3

+6.0 +0.0

+1.5

+0.1-2.1

+5.9

17

YTD REVENUES BY SEGMENT

US$ m

Net Revenues

Six months ended June 30, Variance

2014 2015 Actual % Lfl %1

Bulgaria 43.2 36.2 (16.2)% 3.1%

Croatia 33.0 28.2 (14.4)% 5.9%

Czech Republic 98.3 87.1 (11.4)% 9.4%

Romania 86.3 77.6 (10.1)% 10.4%

Slovak Republic 42.4 37.8 (10.8)% 9.8%

Slovenia 31.8 26.5 (16.7)% 2.6%

Intersegment revenues (1.5) (0.4) NM 2 NM 2

Total net revenues 333.5 293.0 (12.2)% 8.2%

¹ Like-for-Like currency variance reflects the impact of applying the current period average exchange rates to the prior period revenues.² Number is not meaningful.


18

YTD OIBDA BY SEGMENT

US$ mOIBDA

Six months ended June 30, Variance2014 2015 Actual% Lfl%¹

Bulgaria 2.9 6.2 116.2 % 171.3 %

Croatia 5.5 6.8 23.6 % 55.1 %

Czech Republic 23.4 34.3 46.6 % 83.3 %

Romania 16.1 18.8 16.6 % 45.4 %

Slovak Republic (0.1) 3.5 NM 2 NM 2

Slovenia 3.2 1.3 (58.7)% (47.6)%

Eliminations 0.3 0.0 NM 2 NM 2

Operations sub-total 51.4 71.0 38.2 % 73.5 %

Central costs (13.9) (12.7) 8.9 % (8.8)%

Total 37.4 58.3 55.7 % 99.4 %¹ Like-for-Like currency variance reflects the impact of applying the current period average exchange rates to the prior period revenues and costs.² Number is not meaningful.


19

SUMMARY CONSOLIDATED STATEMENTS OF OPERATIONS

US$ m (except per share data)Three months ended

June 30,Six months ended

June 30,2014 2015 2014 2015

Net revenues 192.8 166.8 333.5 293.0Content costs 93.2 73.4 180.0 144.7Other operating costs 21.1 17.4 42.6 34.5Depreciation and amortization 11.2 10.4 22.5 20.9Selling, general and administrative costs 41.7 28.7 72.2 72.6Restructuring costs 2.9 0.5 8.2 1.1Operating income 22.7 36.4 8.0 19.2Net interest expense (39.0) (41.6) (66.8) (81.6)Loss on extinguishment of debt (24.2) — (24.2) —Foreign currency (loss) / gain, net (0.3) 2.3 (1.0) (9.2)Change in FV of derivatives 2.4 (2.2) 2.3 (3.2)Other expense, net (0.5) (3.1) (0.5) (3.4)Income tax provision (2.4) (3.5) (0.3) (3.6)Loss from continuing operations (41.4) (11.7) (82.4) (81.9)(Loss) / income from discontinued operations, net of tax (11.2) 2.7 (18.8) (0.6)Net loss (52.5) (9.0) (101.1) (82.5)Net loss attributable to noncontrolling interests 0.1 0.3 0.8 0.6Net loss attributable to CME Ltd. (52.4) (8.7) (100.4) (82.0)

Net loss attributable to CME Ltd. per share (0.39) (0.09) (0.74) (0.62)Please refer to our Form 10-Q for the period ended June 30, 2015 for the full financial statements and related notes and disclosures.

20

SUMMARY CONSOLIDATED BALANCE SHEET

21

US$ m As at December 31, 2014 As at June 30, 2015

Current assets 345.0 339.4Assets held for sale 29.9 9.3Total current assets 374.9 348.7Non-current assets 1,244.5 1,133.5Total assets 1,619.4 1,482.3Current liabilities 439.9 446.6Liabilities held for sale 10.6 5.0

Non-current liabilities 667.7 675.4Total liabilities 1,118.2 1,127.0Series B Convertible Redeemable Preferred Stock 223.9 232.3CME Ltd. shareholders' equity 279.8 125.4Noncontrolling interests (2.6) (2.4)Total liabilities and equity 1,619.4 1,482.3

Cash & cash equivalents 34.3 38.0Gross debt 1 (1,066.0) (1,061.9)

Net debt (1,031.7) (1,023.9)¹ Gross debt is the full face value of all outstanding debt. Please refer to our Form 10-Q for the period ended June 30, 2015 for the full financial statements and related notes and disclosures.

SUMMARY CASH FLOW

US$ mSix months ended June 30,

2014 2015

Net cash (used in) / generated from continuing operating activities (12.6) 41.5

Net cash used in continuing investing activities (14.0) (14.4)

Net cash provided by / (used in) continuing financing activities 16.2 (27.4) Net cash (used in) / generated from discontinued operations (2.4) 5.3Impact of exchange rate fluctuations (3.6) (1.3)

Net (decrease) / increase in cash and cash equivalents (16.3) 3.7

Net cash (used in) / generated from continuing operating activities (12.6) 41.5Capex additions, net of disposals (14.0) (14.4)Free cash flow (26.5) 27.1

Supplemental disclosure of cash flow information:Accretion on Series B Convertible Redeemable Preferred Stock 7.8 8.4

Please refer to our Form 10-Q for the period ended June 30, 2015 for the full financial statements and related notes and disclosures.

22

US$ mThree months ended June 30, Six months ended June 30,

2014 2015 2014 2015Reconciliation to Consolidated Statements ofOperations:

Operating income 22.7 36.4 8.0 19.2

Depreciation of property, plant and equipment 8.1 6.9 16.1 13.9

Amortization of intangible assets 3.2 3.4 6.4 6.9

Other items 1 6.9 — 6.9 18.2

OIBDA 40.8 46.8 37.4 58.3

OIBDA RECONCILIATION

1Other items for the six months ended June 30, 2015 consists solely of a charge related to the ongoing tax audit of Pro TV in Romania which was accrued in the first quarter of 2015. Following legislationenacted in July 2015 in Romania, during the third quarter of 2015 we expect to reverse substantially all of the charges taken in the fourth quarter of 2014 and the first quarter of 2015 related to the tax audits.Other items for the three and six months ended ended June 30, 2014, is comprised of a fine the competition committee in Slovenia was seeking to impose which was subsequently overturned in the fourthquarter of 2014.

23

Please refer to our Form 10-Q for the period ended June 30, 2015 for the full financial statements and related notes and disclosures.

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