q2 2013 presentation

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MODERN TIMES GROUP

Q2 2013 FINANCIAL RESULTS

INVESTMENTS ON TRACK & ACCELERATED GROWTH

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FORWARD LOOKING STATEMENTS

Forward-looking information and Safe Harbour Statement under the U.S. Private Securities Litigation

Reform Act of 1995

This report contains forward-looking information based on the current expectations of MTG

management. Although management deems that the expectations presented by such forward-looking

information are reasonable, such forward-looking information is subject to risks and uncertainties and

no guarantee can be given that these expectations will prove correct. Accordingly, the actual future

outcome could vary considerably when compared to what is stated in the forward-looking information,

due to such factors as described above in the Risks & Uncertainties section.

Accelerated sales growth – up 6% (y-o-y) at constant exchange rates

Investments on track – our portfolio of content offerings for consumers is stronger than ever

Important strategic partnerships signed with leading third party distributors

Free-TV Emerging Markets delivered a quarter of exceptional growth

Free-TV Scandinavia - audience share gains in all 3 markets - we will continue to invest into this momentum

Pay-TV Nordic operators – accelerated sales growth and profitability in line with expectations

Pay-TV Emerging Markets delivered healthy sales growth and outperform profitability expectations

Studios M&A deals + launch of MTGx to accelerate pace of digital innovation and expansion

Q2 2013 – HIGHLIGHTS

POSITIVE MOMENTUM

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FREE-TV SCANDINAVIA

AUDIENCE SHARE GAINS IN ALL 3 MARKETS

Stable sales y-o-y at constant FX

Best y-o-y sales development since Q4 2011

Expected decline in the Danish TV ad market while Norway is

expected to have grown. The Swedish TV ad market is estimated to

have been at around the same level as in Q2 2012

Expect to gradually regain advertising market shares but there is a

lag between rating and ad shares

CSOV – significant gains in all thee markets

Danish media house achieved its highest CSOV level since Q2 2001

3rd channel to be launched in Norway in H2

EBIT margin of 19.3%

OPEX up 4% y-o-y at constant FX

FY OPEX growth expected to be at the higher end of the mid-single

digit percentage point range

29% of Group sales 2012 2013

Apr-Jun Apr-Jun

Sales (SEKm) 1,110 1,080

Growth (constant currency) -3% 0%

EBIT (SEKm) 251 209

EBIT margin 22.6% 19.3%

CSOV (15-49)

Sweden 31.3% 32.7%

Denmark 23.9% 26.2%

Norway 18.1% 19.5%

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PAY-TV NORDIC

ACCELERATED GROWTH

Sales up 7% y-o-y at constant FX

Driven by contribution from TV3 Sport channels, Viaplay (volume +

price increases) and rise in satellite premium ARPU

Overall subscriber base (incl. Viaplay) up but premium satellite

subscribers down as anticipated

3rd party network subscribers still expected to increase on FY basis


In line with expectations & ongoing investments in premium movie,

sports content and Viaplay

Retain previous guidance

Revenue growth at constant exchange rates & operating (EBIT)

margin of 10-12% for FY13, with a higher margin in 2014


Apr-Jun Apr-Jun

Sales (SEKm) 1,292 1,349

Growth (constant currency) 5% 7%

EBIT (SEKm) 228 152


Premium subs ('000) 1,031 989

o/w satellite ('000) 612 569

o/w third party ('000) 419 421

Satellite ARPU (SEK) 4,926 4,978


Driven by high underlying growth & sales cooperations

Exceptional growth in the Czech Republic (47% at constant FX) - the

largest media house by ad market share for the 2nd quarter in a row

Ghana reported its first quarterly profit ahead of launch in Tanzania

Significantly higher CSOV in Baltic & Bulgarian markets

TV3 Estonia was the most watched channel in its target group for the

first time since Q2 2008

Positive momentum in Bulgaria and new formats to be launched in

Czech Republic


Improved profitability y-o-y for the 7th consecutive quarter

OPEX up significantly and expect similar level of opex growth in H2

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FREE-TV EMERGING MARKETS

EXCEPTIONAL PERFORMANCE


Apr-Jun Apr-Jun

Sales (SEKm) 560 692

Growth (constant currency) -3% 31%

EBIT (SEKm) 91 140


CSOV

Pan-Baltic (15-49) 40.5% 47.9%

Czech Republic (15-54) 39.1% 35.9%

Bulgaria (18-49) 25.7% 32.5%


Continued mini-pay subscription growth

Added over 17m mini-pay subscriptions (y-o-y)

Added 28k satellite subscribers (y-o-y)

EBIT of SEK 52 (58) mn

Significant improvement compared to Q1 & expectations

Approximately half of the Q2 EBIT due to the positive one-off, timing

and currency related items

EBIT exceeds previous expectations

FY13 EBIT to exceed previous expectation for breakeven result.

Continuing to invest as previously indicated & no change to

expectation for rising profitability levels in 2014

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PAY-TV EMERGING MARKETS

CONTINUED GROWTH AND INVESTMENTS


Apr-Jun Apr-Jun


Growth (constant currency) 12% 9%

EBIT (SEKm) 58 52


Subscribers / subscriptions ('000)

Satellite 534 562

Mini-pay wholesale 72,816 89,915

Sales down 15% y-o-y at constant FX

BUT up 9% y-o-y when excluding Bet24 but including Paprika

Latino, DRG and Novemberfilm

Higher MTG Studios & Norwegian radio sales more than offset

substantial decline in Swedish radio sales

EBIT of SEK 3 (5) mn

Two acquisitions made in Q2 + launch of MTGx

DRG - leading UK-based content distribution company

Novemberfilm – Norwegian production company

MTGx - digital innovation and acceleration platform

MTGx expected to add up to SEK 50 mn of operating costs in H2

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OTHER BUSINESSES

ADDING NEW DIMENSIONS


Apr-Jun Apr-Jun


Growth (constant currency) -13% -15%

Growth exc. Bet24 (constant currency) -6% 9%

EBIT (SEKm) 5 3

EBIT margin (excl. associates) 1.2% 0.4%

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INCOME STATEMENT

HEALTHY GROWTH & ONGOING INVESTMENTS

Sales up 6% y-o-y at constant exchange rates and 7% on an

organic basis

Negative FX impact of ~ 3 percentage points

Divestments impacting sales by ~ 3 percentage points

Acquisitions adding ~ 2 percentage points

EBIT margin (excl. associates) of 12.8%

OpEx up 9% at constant FX

Significant investments in Nordic & Emerging Markets pay-TV

businesses to drive future growth

Effective tax rate of 29%

Continue to expect FY13 rate to be in 25-30% range

Q2 in brief 2012 2013

Apr-Jun Apr-Jun

Sales (SEKm) 3,517 3,619

Organic growth (constant currency) 1% 7%

EBIT excl. associates 552 464

EBIT margin excl. associates 15.7% 12.8%

Total EBIT 684 578

Total EBIT margin 19.5% 16.0%

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CASH FLOW

80% CASH CONVERSION

Asset light model – high cash conversion

80% cash conversion (pre changes in WC) for wholly owned

operations

Dividend stream from CTC Media

SEK 64 (55) mn in Q2 & SEK 123 (107) mn in H1

Acquisition of DRG and Novemberfilm

Investments of SEK 155 (100) mn in Q2

Capex of SEK 72 (20) mn in Q2 = <2% of sales

Working capital under strict control but will increase

(SEK mn) 2012 2013

Apr-Jun Apr-Jun

Cash flow from operations 501 471

Changes in working capital 227 208

Net cash flow from operations 728 678

Cash flow used in investing activities -58 -227

Cash flow used in financing activities -582 -358

Net change in cash & cash equivalents 88 93

FINANCIAL POSITION

FIREPOWER & FLEXIBILITY

Net debt of SEK 206 mn

Paid out SEK 666 mn in May - highest ever annual

cash dividend

Available liquid funds of SEK 6 bn

SEK 2.1 bn book value of 37.9% CTC Media stake

Public equity market value of SEK 4.5 bn

Continuing to balance investment in future growth &

shareholder returns

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1,2 1,2 1,1

0,8 0,7

0,6 0,7

0,3 0,3 0,3 0,3

0,0 0,0

0,1 Q

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0

Q2

10

Q3

10

Q4

10

Q1

11

Q2

11

Q3

11

Q4

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Q1

12

Q2

12

Q3

12

Q4

12

Q1

13

Q2

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Net debt / Trailing 12 month EBITDA

Q2 2013 SUMMARY

POSITIVE MOMENTUM

Accelerated sales growth – up 6% (y-o-y) at constant exchange rates

Investments on track – our portfolio of content offerings for consumers is stronger than ever

Important strategic partnerships signed with leading third party distributors

Free-TV Emerging Markets delivered a quarter of exceptional growth

Free-TV Scandinavia - audience share gains in all 3 markets - we will continue to invest into this momentum

Pay-TV Nordic operators – accelerated sales growth and profitability in line with expectations

Pay-TV Emerging Markets delivered healthy sales growth and outperform profitability expectations

Studios M&A deals + launch of MTGx to accelerate pace of digital innovation and expansion

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MTG INVESTOR RELATIONS

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EMAIL: [email protected]

q2 2013 presentation

Investor Relations