mtg q4 presentation final
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TRANSCRIPT
1
Modern Times Group
MTG
Fourth Quarter &
Full year 2011
Financial Results
2 Q4 2
011 F
INA
NC
IAL R
ES
ULT
S
3
Fourth Quarter 2011
Record Sales & Increased Net Cash Flow
• Sales up 3% y/y at constant & reported FX to
SEK 3,711 (3,618) mn
• OPEX up y/y to SEK 3,160 (2,965) mn & up
7% at constant FX
• EBIT before associated company income &
non-recurring items of SEK 551 (653) mn
• Total EBIT of SEK -2,517 (746) mn incl.
associated company income of SEK 114 (93) mn
& SEK -3,182 mn of non-recurring items, primarily
related to impairment of Bulgarian broadcasting
goodwill
• PTP of SEK -2,519 (741) mn
• Net income from continuing operations of
SEK -2,564 (634) mn & basic EPS from
continuing operations of SEK -38.87 (9.40)
• Net cash flow from operations up 10% y/y to
SEK 1,107 (1,009) mn
• Included SEK 174 (131) mn of
dividends from CTC Media
Q4 2
011 F
inancia
l R
esults
SEK mn
* EBIT excluding associated income & non-recurring
items
3.618 3.711
653 551
0%
5%
10%
15%
20%
25%
30%
35%
40%
0
500
1.000
1.500
2.000
2.500
3.000
3.500
4.000
Q4 2010 Q4 2011
Revenue EBIT* EBIT margin
4
Full Year 2011
Lower Gearing & Higher Dividend
• Sales up 6% y/y at constant FX & up 3% at
reported FX to SEK 13,473 (13,101) mn
• OPEX up y/y to SEK 11,540 (11,160) mn & up 7%
at constant FX
• EBIT of SEK 1,933 (1,941) mn when excluding
associated company income & non-recurring
items
• Total EBIT of SEK -637 (2,355) mn incl.
associated company income of SEK 611 (413) mn
& SEK -3,182 mn of non-recurring items
• PTP of SEK -727 (2,321) mn
• Net income from continuing operations of
SEK -1,289 (1,750) mn & basic EPS from
continuing operations of SEK -19.98 (26.22)
• Net cash flow from operations up 17% y/y to
SEK 1,797 (1,533) mn
• Including SEK 319 (216) mn of dividends
from CTC Media
• Board of Directors to propose increased annual
cash dividend of SEK 9.00 (7.50) per share &
adopts dividend policy to distribute at least 30% of
recurring net profit to shareholders as annual
ordinary dividend
FY
2011 F
inancia
l R
esults
SEK mn
* EBIT excluding associated income & non-recurring
items
13.101 13.473
1.941 1.933
0%
5%
10%
15%
20%
25%
30%
35%
40%
0
2.000
4.000
6.000
8.000
10.000
12.000
14.000
16.000
FY 2010 FY 2011
Revenue EBIT* EBIT margin
Opera
tin
g r
evie
w
6
Free-TV Scandinavia
Financial Highlights
• Sales of SEK 1,240 (1,229) mn in Q4 & SEK
4,393 (4,247) mn for FY
• Sales up 1% y/y in Q4 & 6% for full year
at constant FX
• OPEX of SEK 958 (879) mn in Q4 & SEK 3,316
(3,165) mn for full year
• Up y/y at constant FX for both periods
• Increased investments in programming
in all 3 countries
• EBIT down to SEK 282 (350) mn in Q4 & stable
at SEK 1,077 (1,082) mn for FY
• EBIT margin of 22.7% (28.5%) in Q4 &
24.5% (25.5%) for FY
Opera
tin
g r
evie
w
SEK mn
1.229 1.240
4.247 4.393
350 282
1.082 1.077
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
Q4 2010 Q4 2011 FY 2010 FY 2011
Revenue EBIT EBIT margin
7
Free-TV Scandinavia
Operating Highlights
Sweden
• Target audience share of 34.0% (35.2%) in Q4
• Spring programming schedules launched
earlier y/y in 2012
• Focus on new series of popular local
productions & proven international
programmes
Norway
• Target audience share of 20.1% (23.1%)
• Investing in programming content
• Spring 2012 schedules feature well-
established formats launched from
January onwards
Denmark
• Target audience share of 22.2% (24.7%)
• Earlier y/y launch of Spring schedules
• Focus on new seasons of successful
formats
Opera
tin
g r
evie
w
Commercial Audience Share (15-49)
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
Sweden Norway Denmark
8
Pay-TV Nordic
Financial Highlights
• Sales of SEK 1,221 (1,137) mn in Q4 &
SEK 4,730 (4,484) mn for FY
• Up 7% y/y in Q4 & 8% for FY at
constant FX
• OPEX of SEK 976 (929) mn in Q4 & SEK 3,807
(3,662) mn for FY
• Up y/y at constant FX
• Ongoing investments in Viaplay streaming
platform & premium content investments
• EBIT up 18% y/y to SEK 246 (208) mn in Q4 &
SEK 923 (822) mn for FY
• Increased operating margins of 20% (18%)
for both periods
Opera
tin
g r
evie
w
SEK mn
1.137 1.221
4.484 4.730
208 246
822 923
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
Q4 2010 Q4 2011 FY 2010 FY 2011
Revenue EBIT EBIT margin
9
Pay-TV Nordic
Operating Highlights
• Premium subscriber base up by 16,000
subscribers net in Q4 & stable y/y
• Driven by third party subscriber growth
in all three Scandinavian countries
• Satellite subscribers stable q/q
• Premium ARPU up by 5% y/y to SEK 4,791
(4,555) & stable compared to SEK 4,751 in Q4
• Price increases previously introduced
• Ongoing rise in penetration of value-added
services
Opera
tin
g r
evie
w
Thousands
Thousands
Premium subscribers
Value added services
0
200
400
600
800
1.000
1.200
Satellite subscribers 3'rd party network subscribers
0
50
100
150
200
250
300
350
Q12010
Q22010
Q32010
Q42010
Q12011
Q22011
Q32011
Q42011
ViasatPlus HDTV Multi-room
10
Free-TV Emerging Markets
Financial Highlights
• Total sales of SEK 655 (631) mn in Q4 &
SEK 2,073 (2,004) mn
• Up 7% y/y at constant FX in Q4 & 8%
for FY at constant FX
• OPEX up 7% y/y in Q4 & 8% for FY at
constant FX
• Total EBIT up 19% in Q4 to SEK 67 (56) mn &
improved EBIT of SEK 32 (-43) mn for FY
• EBIT margin of 10% (9%) in Q4 & 2% (-)
for FY
• Baltic, Czech & Bulgarian sales of SEK 591
(556) mn in Q4 & SEK 1,845 (1,754) mn for FY
• Up 9% at constant FX for both periods
• Combined OPEX of SEK 512 (481) mn in Q4 &
SEK 1,721 (1,702) mn for FY
• Up y/y at constant FX for both periods
• EBIT margin of 13% (13%) in Q4 & 7% (3%)
for FY
Free-TV Emerging Markets
Baltics, Czech Republic & Bulgaria
SEK mn
SEK mn
631 655
2.004 2.073
56 67 -43 32
-500
0
500
1.000
1.500
2.000
2.500
Q4 2010 Q4 2011 FY 2010 FY 2011
Revenue EBIT
556 591
1.754 1.845
75 79 52 124
0
500
1.000
1.500
2.000
Q4 2010 Q4 2011 FY 2010 FY 2011
Revenue EBIT
11
Free-TV Emerging Markets
Operating Highlights
Baltics
• Sales up 1% y/y in Q4 & up 8% for FY at
constant FX
• Increased pan-Baltic target audience share
of 43.4% (42.0%) following programming
investments
• New channel TV8 in Lithuania reached 1% CSOV
in 15-49 demographic by year end
Czech Republic
• Sales up 22% y/y in Q4 & 20% for FY at constant
FX following viewing and ad market share gains
• Continued significant CSOV gains both y/y and
q/q, from 25.9% in Q4 2010 to 30.0% in Q4 2011
Bulgaria
• Sales down 11% y/y in Q4 & down 12% for FY at
constant FX, following decline in overall TV ad
market & low prevailing ad prices
• Combined CSOV reflected ongoing programming
investments
Opera
tin
g r
evie
w
10%
20%
30%
40%
50%
Estonia (15-49) Latvia (15-49)
Lithuania (15-49) Czech Republic (15-54)
Bulgaria (18-49)
Commercial Audience Share
12
Pay-TV Emerging Markets
Financial Highlights
• Sales* of SEK 237 (225) mn in Q4 & SEK 922
(896) mn for FY
• Up 6% y/y in Q4 & 13% for FY at constant
FX
• Continued subscriber intake on Ukrainian
Russian & Baltic platforms + minipay
• Y/Y effect on YTD sales of consolidation
of 50% of Raduga TV from February 2010
& full consolidation of Viasat Ukraine from
June 2010
• OPEX of SEK 231 (196) mn in Q4 & SEK 874
(784) mn for FY & also up y/y at constant FX
• Launch of 10 new mini-pay Viasat channels
since beginning of 2010
• Ongoing investments in Ukrainian &
Russian platforms
• Consolidation of 50% of Raduga TV &
100% of Viasat Ukraine
• EBIT* of SEK 7 (29) mn in Q4 & SEK 49 (112)
for FY
• EBIT margins of 3% (13%) in Q4 & 5%
(12%) for FY
Opera
tin
g r
evie
w
SEK mn
225 237
896 922
29 7
112
49
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
0
200
400
600
800
1.000
1.200
Q4 2010 Q4 2011 FY 2010 FY 2011
Revenue EBIT EBIT margin
* Including the effect from the Q4 alignment of the accounting treatment of the Group’s Ukrainian satellite pay-TV business’ results. This alignment
generated a revenue impact of SEK -29 mn and an EBIT impact of SEK -18 mn
13
Pay-TV Emerging Markets
Operating Highlights
• 102,000 net new subscribers added y/y &
72,000 subscribers added in Q4
• Accelerating subscriber intake in
Ukraine and Russia
• Growing Baltic subscriber base
• Wholesale mini-pay business subscriptions
up 28% y/y & 5% q/q to 64.3 million in Q4 from
50.2 million in Q4 2010
• Reflected signing of new contracts
in Russia in particular
Opera
tin
g r
evie
w
Satellite subscribers
Mini-pay TV subscriptions
Th
ou
sa
nd
s
Thousands
0
100
200
300
400
500
600
30.000
40.000
50.000
60.000
70.000
80.000
14
Other Businesses
Highlights
• Comprises MTG’s Radio, Bet24 and Modern
Studios operations
• Sales of SEK 450 (455) mn in Q4 & SEK 1,675
(1,804) mn for FY
• Down 1% y/y & down 5% for FY at
constant FX
• Combined OPEX of SEK 418 (404) mn in Q4 &
SEK 1,566 (1,636) mn for FY
• EBIT before associated company income of SEK
31 (52) mn in Q4 & 109 (168) mn for FY
• EBIT margins of 7% (12%) in Q4 & 7%
(10%) for FY
• Total EBIT of SEK 32 (53) mn in Q4 & SEK
114 (175) mn for FY when including SEK 1
(1) mn & SEK 5 (6) mn of associated
company income for the two periods
Opera
tin
g r
evie
w
SEK mn
455 450
1.804
1.675
52 31
168 109
0%
5%
10%
15%
20%
25%
30%
0
200
400
600
800
1.000
1.200
1.400
1.600
1.800
2.000
Q4 2010 Q4 2011 FY 2010 FY 2011
Revenue EBIT EBIT margin
15 Fin
ancia
l R
evie
w
16
Income Statement
• Depreciation & amortisation charges
of SEK 38 (57) mn in Q4 & SEK 183
(218) mn for FY
• Y/Y reduction in net interest charges
to SEK -12 (-22) mn in Q4 &
SEK -59 (-115) mn for FY
• Y/Y change in other financial items
in included
• SEK 43 (2) mn of non-cash
financial gain in Q4 & SEK 14
(2) mn for FY from the change
in value of the option element
of the SEK 250 mn CDON
Group convertible bond
• Non-cash financial gain of
following new share issues by
CTC Media and the resulting
dilution of MTG’s ownership in
the company of SEK 2 (17)
mn in Q4 & SEK 22 (69) mn
for FY
Fin
ancia
l R
evie
w
(SEK mn)
Q4
2011
Q4
2010
FY
2011
FY
2010
Net sales 3,711 3,618 13,473 13,101
EBIT before associated company
income & non-recurring items 551 653 1,933 1,941
Associated company income 114 93 611 413
Recurring EBIT 665 746 2,544 2,355
Non-recurring items -3,182 - -3,182 -
Net interest & other financial items -2 -5 -90 -34
Income before tax -2,519 741 -727 2,321
Net income from continuing
operations -2,564 634 -1,289 1,750
Net income from discontinued
operations - 1,724 - 1,790
Net income -2,564 2,359 -1,289 3,541
Basic EPS from continuing
operations -38.87 9.40 -19.98 26.22
Total basic EPS -38.87 35.43 -19.98 53.34
17
Cash Flow
• Cash flow from operations included
receipt of SEK 174 (131) mn of dividend
payments from CTC Media in Q4 &
SEK 319 (216) mn for FY
• No investments in businesses during
2011, compared to SEK 275 mn during
2010, which primarily comprised the
acquisition of shares in Raduga TV &
Viasat Ukraine
• CAPEX of SEK 34 (38) mn in Q4 &
SEK 120 (157) mn for FY = less than 1%
of Group net sales for both periods
Fin
ancia
l R
evie
w
(SEK mn)
Q4
2011
Q4
2010
FY
2011
FY
2010
Cash flow from
operations 519 578 1,853 1,810
Changes in working
capital 588 431 -56 -277
Net cash flow from
operations 1,107 1,009 1,797 1,533
Cash flow used in
investing activities -29 -300 -115 -683
Cash flow used in
financing activities -966 -660 -1,737 -897
Cash flow from
discontinued operations
– CDON Group
- -46 - -88
Net change in cash &
cash equivalents 112 2 -55 -135
18
Financial Position
• SEK 1,542 (2,700) mn of the Group’s available
credit was drawn down as at 31 Dec 2011
• Net debt of SEK down to SEK 797 (2,026) mn
as at 31 Dec 2011 & compared to net debt of
SEK 1,861 mn as at 30 Sep 2011
• SEK 5,528 (4,400) mn of available liquid funds
(cash & undrawn facilities)
• SEK 1,878 (1,785) mn book value of 38.1%
shareholding in CTC Media had public equity
value of SEK 3,618 mn as at 31 Dec 2011
Fin
ancia
l R
evie
w
(SEK mn)
31 Dec
2011
31 Dec
2010
Non-current assets 5,612 8,648
Current assets 5,668 5,354
Total assets 11,281 14,002
Shareholders’ equity 4,350 6,239
Long-term liabilities 2,168 3,311
Current liabilities 4,763 4,452
Total equity & liabilities 11,281 14,002
Net debt / EBITDA
1,2 1,2 1,1
0,8 0,7 0,6 0,7
0,3
19
Summary
• Record sales following growth across all four broadcasting businesses
• Best in class margins and 14% full year underlying margin despite investments
• Adding subscribers in Nordic & Emerging Markets
• Well positioned in the emerging advertising markets BUT market recovery is still
lagging Western markets
• High cash conversion levels & low gearing = increased proposed full year dividend
+ adopted dividend policy
• Solid financial position & continue to invest in businesses that will drive long-term
growth & development
Sum
mary
20
For further information, please visit www.mtg.se or contact:
MTG Investor Relations
Tel: +44 7768 440 414 / +44 7590 098 188
Email: [email protected]
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