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Czech RepublicTV Nova
2
Czech Republic
New foreign investments will bring additional ad spending:
Car manufacturers
Mobile operators – Telefonica, Vodafone
Banks – Unicredito, Non-banking institutions – consumer credits
Political environment - new Government not yet confirmed by Parliament
Key Statistics 2004 2005 2006 Forecast
Population 10.2 10.2 10.2
GDP per Capita (US$) 10,552 12,121 14,098
Real GDP Change (%) 4.2 6.1 6.1
Wage Inflation (%) 6.3 5.5 6.6
Inflation (%) 2.7 1.9 2.7
Unemployment (%) 9.5 8.9 8.0
FDI (US$ billion) 4.0 10.8 4.1
TV Households (million) 3.8 3.8 3.9Sources: ING, Informa, Global Insight
Country and Economy Update 2006
3
Background
20022
100%201412.6% CR19.2% SR24n/an/an/an/a0.2%
Galaxie Sport
TV Nova
19941
100%2017100%
2431%53%42%43%72%
Launched:Ownership:Licence expiry:Technical reach:
Hours broadcast daily: Locally produced content:Prime-time locally produced content:All day audience share YTD June 2006: Prime time audience share YTD June 2006:TV advertising net revenue share 2005:
Station’s All Day Audience ShareYear to Date to June 30, 2006
1 TV Nova was acquired in May 20052 Galaxie Sport was acquired in September 2005Sources: CME Estimates, ATO - Mediaresearch
General channel, market leader in the Czech Republic, high rated news, local series, internationally successful movies and series. Main target: 15-54 year old general audience
Sports cable channel with local and international sporting events, news and magazines. Main target: 15-54 year old male audience
CT211%CT1
21%
Others6%
TV Nova42%
Prima TV20%
4
Competition
Terrestrial TV stations with national coverage: CT1, CT2, TV Nova, Prima TV
Digital (DVB-T) channels: TBD
General channels with cable distributions: Foreign free to air and free to satellite channels (RTL, ZDF, TVP1, ORF, etc)
Specialized CATV local channels:
Movie Channels: Hallmark, CS Film, Romantica, AXN, Spectrum, Reality TV, Club, Minimax, Jettix, National geographics, Discovery, Animal Planet, new MGM channel planned
Sport channels: Eurosport, Sport 1
News channels: TA3, 24CZ
Music Channels: Ocko
Others: TV Paprika, TOP TV
Premium Channels: HBO, HBO2
Specialized foreign channels: MTV, VH1, Mezzo , Private Gold, Private Blue, Eurosport 2, Extreme sport, DSF, ESPN-classic sport, BBC, BBC Prime, CNN
5
Competition
4 terrestrial stations are dominant and have continued to retain share
Digital Update
DVB-T set-top boxes started sale in early 2006 due to Olympics and World Cup covered by CT4 (only distributed by DVB-T and DTH)
The decision of the Media Council to grant 6 new DVB-T licences was cancelled by the court on September 6, 2006
Only about 50,000 households equipped with DVB-T set-top boxes
Transition to Digital will take several years
Adults 15+, All Day Share2000 2001 2002 2003 2004 2005 2006YTD
4 Terrestrial Stations 94.2% 94.4% 94.5% 93.6% 94.2% 93.9% 93.0%Other TV Stations 5.8% 5.6% 5.5% 6.4% 5.8% 6.2% 7.0%
% Change of Terrestrial 0.2% 0.1% -0.9% 0.6% -0.3% -0.9%
6
Market leadership
The Leadership Map
Source: TV Nova
Czech Republic audience shares Jan 1 - Aug 31, 2006
Adults 15+
Adults 15-54
Adults 15-34
Time Mon Tue Wed Thu Fri Sat Sun Time Mon Tue Wed Thu Fri Sat Sun Time Mon Tue Wed Thu Fri Sat Sun06:00 06:00 06:0006:30 06:30 06:3007:00 07:00 07:0007:30 07:30 07:3008:00 08:00 08:0008:30 08:30 08:3009:00 09:00 09:0009:30 09:30 09:3010:00 10:00 10:0010:30 10:30 10:3011:00 11:00 11:0011:30 11:30 11:3012:00 12:00 12:0012:30 12:30 12:3013:00 13:00 13:0013:30 13:30 13:3014:00 14:00 14:0014:30 14:30 14:3015:00 15:00 15:0015:30 15:30 15:3016:00 16:00 16:0016:30 16:30 16:3017:00 17:00 17:0017:30 17:30 17:3018:00 18:00 18:0018:30 18:30 18:3019:00 19:00 19:0019:30 19:30 19:3020:00 20:00 20:0020:30 20:30 20:3021:00 21:00 21:0021:30 21:30 21:3022:00 22:00 22:0022:30 22:30 22:3023:00 23:00 23:0023:30 23:30 23:3000:00 00:00 00:00
1. TV Nova 1.TV Prima, 2.TV Nova 1.ČT1, 2.TV Nova 1.ČT 1, 2 TV Prima, 3 TV Nova 1 ČT 2
1.1.- 31.8.2006 1.1.- 31.8.2006 1.1.- 31.8.2006
7
Market Share Evolution
Winter Olympic Games (Czech National Ice Hockey Team won a bronze medal)
0
10
20
30
40
50
60
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35
ČT 1 ČT 2 TV Nova TV Prima Others2006 YTD
Hockey Championship
Football World Cup
Start of Fall Season
Prime time audience share trendsTarget group: 15 - 54
8
2006 New Sales Policy
We decided to implement a new sales policy to grow TV advertising market
New Sales Policy accepted by anti-monopoly office and the market
New sales model in place since the beginning of 2Q 2006
Going forward, the main characteristic of the sales strategy will continue to be transparency
Sales goal is to be recognized as the driver of the market
To underpin the long term approach of TV Nova, we will focus on building strong partnerships with agencies and clients, as a condition for future development
9
Autumn Programming Schedule
10
Autumn programming strategy: Continue with local fiction, news and entertainment formats and the best foreign product
Successful locally produced series
Hospital in the Rose Garden (Ordinace v ruzove zahrade) 2 (Ordinace 1 – 50.7% share in 15-54 Spring 2006). Fall season thus far 52.9% in 15-54
Insuring Happiness (Pojistovna Stesti) 1 and 2 (Pojistovna 1 first run – 70.2% share in 15-54 Fall 2004). Rerun performs better than 2 new series on Prima and Czech TV.
The Street (Ulice) (44.4% share in 15-54 Spring 2006). 50% thus far in Fall season
Entertainment formats
Pop Idol 3 (Pop Idol 1 – 72.2% share in 15-54 Spring 2004, Pop Idol 2 – 59.9% share in 15-54 Spring 2005). Performing in line with casting episodes of previous two series. 55.1% share in 15-54 and growing. Last episode 61.2%.
Autumn Programming Schedule
11
Autumn programming strategy (continued)
Highly rated news and current affairs programming
112 (58% share in 15-54)
TV News remains strong (27.4 rating, 70.4% share in 15+)
Internationally successful foreign product
LOST strong start (21.2 rating, 53.9% in 15+, 22.6 rating, 60.6% share in 15-54)
CSI growing (CSI – 43.8% share in 15-54 Spring 2006, CSI Miami – 42.6% share in 15-54 Spring 2006). CSI 51% share and CSI Miami 47.3% share thus far.
Increased focus on marketing and investment in our brand power
Autumn Programming Schedule
12
TV Nova Restructuring
Restructuring process initiated from Q2 2006. Outcome will be evident in 2007:
Changes in sales strategy
Organization
Efficiency
Programming and production
Growth in revenues is expected to come from:
Continuing increases of CPP under the new sales policy
Legislation eliminating advertising space on public Czech Television
More sophisticated sales techniques
New channels
Cost reduction driven by:
Introduction of strong cost control
More efficient program planning and production
Consolidation of operations
13
0
20
40
60
80
100
120
140
2004 2005 2006 Guidance
US
$ m
Czech Republic
99.4*
0
50
100
150
200
250
2004 2005 2006 GuidanceSegment Net Revenues¹
US
$ m
.
Segment Net Revenues, EBITDA and EBITDA Margin
For a reconciliation of non-GAAP financial measures presented here to most comparable GAAP financial measures, please see the corresponding reconciliation slides on pages 52 – 53 of our Q2 2006 results presentation on www.cetv-net.com
Czech Republic (US$ m)
FY2004* FY2005* Growth %
2006 Guidance
Growth %
Net Revenues 208.1 235.0 13% 200 (15%)
EBITDA 99.4 110.8 11% 95 (14%)
EBITDA Margin % 48% 46% 48%
208.1*
154.0
235.0*
* Including pre-acquisition data, based on management estimates for the periods prior to our May 2, 2005 acquisition. Reported results for our ownership in 2005 were: Net revenues US$ 154.0m and EBITDA US$ 71.5m
110.8*
95
71.5
48%
EBITDA MARGIN %
48%
0%
10%
20%
30%
40%
60%
50% 200
EBITDA¹
¹ Lighter colour denotes pre acquisition results
14
Looking Ahead
Development of Brand
Driven by Marketing expertise
Development of Product
Stronger News
More local content
More Channels
Development of Resources
Talent
Facilities
Multiple distribution (DTH, ADSL, Cable, IPTV, DVB-T)
Development Beyond TV
Internet
And transition into other new media…
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