130409 mtg at kinnevik cmd 2013 final clean

PowerPoint Presentation

1

Jrgen Madsen Lindemann

CEO & President

Modern Times Group

Entertainment Across The Board

5 business segments

Sweden

Norway

Denmark

Estonia

Latvia

Lithuania

Bulgaria

Czech Republic

Hungary

Ghana

4 satellite platforms

Virtual operator in 3rd party networks

20 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

Modern Studios + MAP

Other

Businesses

2

Integrated Group

With a Global footprint

3

32 free-TV channels in 10 countries

Satellite pay-TV platforms in 9 countries

85 million wholesale channel subscriptions

in 34 countries 3

Clear Content Leadership

TV series, movies & premium

sports

4

Local titles

5

Complementary revenue streams

Cyclical & non-cyclical balance

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2006 2007 2008 2009 2010 2011 2012

Free-TV Scandinavia Pay-TV Nordic

Emerging Markets

42.0%

49.0%

9.0%

Advertising

Subscription

B2B / B2C

MTG Revenue split by source (2012) Revenue split by segment (2012)

Operational synergies by centralised broadcast facilities

Cross-platform content acquisition makes us a more attractive partner for content providers

Content monetized on free-TV, pay-TV & online & benefits from full exclusivity

Benefits from cyclical advertising growth mixed with stable pay-TV revenues

Stable Business Model

With long-term profitable growth

6

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

Revenues EBIT* Margin

SEK million

Integrated structure enables Group growth through the whole macroeconomic cycle, with continued strategic content investments

Sales CAGR OF 10% between 2002-2012

EBIT CAGR of 35% between 2002-2012 excluding associated company income

Strong Financial Position

Increasing dividends & net cash

7

01,0002,0003,0004,0005,0006,0007,000

Liquid funds (incl. Unused credit facilities) Net debt

Net cash position as of Q1 2013 & SEK

6.5 billion of available liquid funds

SEK million

Increasing dividend yield

(SEK million)

Reinvesting on organic growth across our territories

Selective & opportunistic M&A in Nordic & Emerging markets

Focus on 3 key areas:

Content

Technology

Countries

363

498 600

667

2010 2011 2012 2013

8

Free-TV

Multichannel Media Houses

In 3 countries

9

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 2012

Revenue EBIT EBIT margin

Sweden

0.0%

10.0%

20.0%

30.0%

40.0%

2011 2012

0.0%

10.0%

20.0%

30.0%

2011 2012

0.0%

10.0%

20.0%

30.0%

2011 2012

CSOV % (15-49)

Norway

Denmark

CSOV % (15-49)

CSOV % (15-49)

Financial Performance

SEK million

#2 position in Sweden & Denmark & #3 position in Norway

Advertising sold on a bundled Media House basis with complementary channel positioning

driving incremental reach

Key deals signed with Canal Digital & Boxer to extend reach of TV3 & TV3 PULS in Denmark

3rd channel to be launched in Norway in 2013

And Emerging Markets Portfolio

With room to grow further

10

Estonia Latvia** Lithuania Czech

Republic Bulgaria Hungary Ghana Russia

Position #1 #1 #1 #2 #2 #3 - #4

Combined

commercial

audience share*

(target

demographic)

39.6%

(15-49)

61.1%

(15-49)

42.3%

(15-49)

38.7%

(15-54)

29.5%

(18-49)

8.6%

(18-49)

n/a

(15-49)

11%***

(6-54)

Sold on bundled

basis Yes Yes Yes Yes Yes Yes n/a n/a

Cath-up services No

* FY 2012

* * Including LNT channels from Q3 2012

*** CTC Network only

Emerging Markets

Operationally geared for recovery

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Free-TV Emerging Markets

(2012)

Czech Republic, Bulgaria, Baltics

(2012)

-500

0

500

1,000

1,500

2,000

2,500

2008 2009 2010 2011 2012

Revenue EBIT

-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 2012

Revenue EBIT EBIT margin

SEK million SEK million

Ongoing strategic investments in content to drive growth

Incremental margins >50% position the operations well for market recovery

Significant audience & market share gains in key Czech and Bulgarian territories during 2012 & new sales cooperations to expand bundled media house reach from 2013

Digitalisation Changes The Game

Even playing field presents

opportunities

12

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)

Opportunities of Digitalisation

We benefit from fragmentation

13

0%

10%

20%

30%

40%

50%

60%

70%

80%

Bonnier MTG SBS13

2003 2012

-2% +21% +8%

Source: MMS

Digitalisation pressures audience shares for major channels

Media house enables increased pricing power for smaller & niche channels

High power ratios provide barriers to entry to new competitors

0

5

10

15

20

25

30

35

40

45

50

TV3 TV4 Kanal 5 MTG TV4 Group SBS

FY 2002 FY 2012

Commercial audience share

(15-49, Sweden)

Average Weekly Reach

(15-49, Sweden) %

TV Viewing is Expanding Online

MTGs core audiences are early adapters

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0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

ComputerScreen

Mobile Phone TV-screen Tablet

92%

83%

1%

1%

16%

7%

Traditional TV Web-TV Mobile-TV

Age 15-24

+16%

+77%

+54%

+278%

Q1 2011 Q1 2012

Age 15-74

Viewing Platform Viewing by Device

With Added Revenue Streams

& higher pricing levels

15

-

10,000,000

20,000,000

30,000,000

40,000,000

50,000,000

60,000,000

2010 2011 2012 20130

50

100

150

200

250

300

350

400

450

2010 2011 2012 * 2013* 2014* 2015*

Online TV market Growth

(Sweden)

Number of streams on MTG TV

Play devices

AVOD revenue per viewer and per hour are higher than in traditional linear TV

Price = 2.8x higher online & even higher on mobile

SEK million

MTG Already Leading Online

We are leveraging our strong

traditional brands

16

34.80%

36.70%

Linear Online

Online viewing higher than traditional

linear media house audience share

(Sweden, FY 2012)

Key free-TV brands launched online to

drive viewing & strenghten

engagement

Key free-TV brands launched online to

drive viewing & strenghten

engagement

Making Content Live Longer

By extending product life cycles

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Linear On-demand

Cross-promotion for brands & other formats

Editorial post-show content & talent

engagement

Channel viewers to other IPs via online

presence

Increased exposure & reach

Social media integration

Second screen drive engagement

Extends product life cycle

Extra content Previews & teasers