120327 modern times group corporate presentation

1

Modern Times Group MTG AB

“A Modern Media Group

for Modern Times”

March 2012

0

500

1,000

1,500

2,000

2,500

3,000

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

2

MTG = Made To Grow

+ Operationally Geared

Intr

oductio

n

Revenues (SEK million)* EBIT (SEK million)*

*Continuing operations excluding associated company income &

non-recurring items

3

Operating 28 free-TV channels in 10 countries &

38 pay-TV channels in 34 countries

Unrivalled Broadcast Footprint

Spanning 4 continents

Intr

oductio

n

Four Broadcasting Segments

Sweden

Norway

Denmark

Estonia

Latvia

Lithuania

Bulgaria

Czech

Hungary

Ghana

• 4 satellite platforms

• Virtual operator in 3rd

party networks

• 18 channels • 5 satellite platforms –

Baltics, Ukraine & Russia

• 20 channels on 3rd party

networks

• 9 channels

Free-TV

Scandinavia

Pay-TV

Nordic

Free-TV

Emerging Markets

Pay-TV

Emerging Markets

4 Intr

oductio

n

5

2011 revenue mix Segmental revenue mix

• Balanced revenue mix of cyclical advertising sales & linear subscription sales

• Unparalleled efficiency due to control of content, packaging, pricing & distribution

Balanced Revenue Mix

Integrated Operator Benefits

Intr

oductio

n

0%

20%

40%

60%

80%

100%

2006 2007 2008 2009 2010 2011

Free-TV Scandinavia Pay-TV Nordic Emerging Markets

44%

47%

9%

Advertising Subscription B2B / B2C

6 Fre

e-T

V S

candin

avia

Market Position

Macro Profile

TV as % of total Ad market TV viewing minutes per day (3+)

TV Ad spend per capita (USD) GDP growth

7 Fre

e-T

V S

candin

avia

-10.00%

-5.00%

0.00%

5.00%

10.00%

2009 2010 2011

0

50

100

150

200

Sweden Norway Denmark UK US

2009 2010 2011

10.0%

20.0%

30.0%

40.0%

50.0%

Denmark Sweden Norway UK US

2009 2010 2011

110.0

160.0

210.0

260.0

310.0

Sweden Norway Denmark UK US

2009 2010 2011

8

Market Position

Digitalisation Complete

Sweden – 1 Feb 2008

Denmark – 1 Nov 2009

Norway – 1 Dec 2009

Fre

e-T

V S

candin

avia

Scandinavian TV landscape

(2010)

Cable; 52% Satellite;

19%

DTT; 19%

IPTV; 9%

Cable; 55%

Satellite; 19%

DTT; 7%

Analogue Terrestrial;

20%

Scandinavian TV landscape

(2005)

Sweden Norway Denmark

Position #2 #3 #2

National penetration

Combined commercial

audience share (15-49) 35.8 22.4 24.1

Catch-up services Yes Yes Yes

Sold on ’bundled’ basis Yes Yes Yes

9

Market Position

Primary Challenger

Fre

e-T

V S

candin

avia

The Opportunity

Breaking the Monopoly

10 Fre

e-T

V S

candin

avia

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2003 2011

11

Seizing the Opportunity

The “Media House” Model (Sweden)

Fre

e-T

V S

candin

avia

Source: MMS

Complementary channel profiles Average weekly reach (15-49)

-1%

+22%

+8%

Old & Male Old & Female

Young & Male Young & Female

TV4; 87% MTG; 7%

Other; 6%

Print; 63% Direct advertising,

14%

Internet; 14%

Radio; 4% TV; 5%

The Next Phase

Untapped Potential

Regional share of total advertising

(NOK / DKK / SEK billion)

50% 40% 60%

Source: IRM Media, Regional market report, April 2011

0

5

10

15

12 Fre

e-T

V S

candin

avia

Total regional advertising

Regional TV advertising

SEK 14 bn

SEK 700 mn

• Expansion of number of regional broadcast zones from

6 to 19 in Q1 2012

• Bundled TV, Radio & Internet Ad sales package with

dedicated sales force of 120 people

• Local Ad prices as much as 2x national prices

13

Free-TV Scandinavia

Operating Results

• Overall shortage of inventory supply driving up

annual contract & spot prices

• Sales only down 1% at constant exchange rates in

2009 recession & up 16% again in 2010 recovery

• Sales up 6% at constant exchange rates in 2011,

with EBIT margin of 25%

Fre

e-T

V S

candin

avia

(SEK million)

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

2006 2007 2008 2009 2010 2011

Revenue EBIT EBIT margin

14 Fre

e-T

V E

merg

ing M

ark

ets

Market Position

Macro Profile

TV viewing (minutes per day)

Fre

e-T

V E

merg

ing M

ark

ets

GDP growth

TV ad spend per capita (USD)

TV ad spend development

0

5

10

15

20

25

30

35

40

45

50

CzechRepublic

Hungary Estonia Lithuania Latvia Bulgaria

2009 2010 2011

-20%

-15%

-10%

-5%

0%

5%

10%

15%

Czech R

epu

blic

Hu

nga

ry

Esto

nia

Lithu

ania

La

tvia

Bulg

aria

2009 2010 2011-50%

-40%

-30%

-20%

-10%

0%

10%

20%

Czech R

epu

blic

Hu

nga

ry

Esto

nia

Lithu

ania

La

tvia

Bulg

aria

2009 2010 2011

0

50

100

150

200

250

300

350

CzechRepublic

Hungary Estonia Lithuania Latvia Bulgaria

2009 2010 2011

16

Market Position

Incumbent or Primary Challenger

Estonia Latvia Lithuania Czech

Republic Bulgaria Hungary Ghana Russia

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

Combined

commercial

audience share

(target

demographic)

42.0%

(15-49)

37.2

(15-49)

44.0%

(15-49)

27.7%

(15-54)

28.1%

(18-49)

8.1%

(18-49)

18.8%

(15-49)

16.1%

(6-54)

Catch-up services Yes Yes Yes No Yes No No Yes

Sold on ’bundled’

basis Yes Yes Yes Yes Yes Yes N/A N/A

Fre

e-T

V E

merg

ing M

ark

ets

Scale Operations in Key Markets

Baltics, Czech Republic, Bulgaria

17

Financial performance (SEK million) Commercial Audience Share

• Clear market leadership in Baltics with >43% pan-Baltic target group share of viewing as advertising

spending returned to growth in 2011

• Investments in schedule & new Prima Love channel boosted target audience share in Czech

Republic & enabled advertising market share gains in low growth environment in 2011

• Stable combined audience share in Bulgaria but no recovery in advertising spending in 2011

Fre

e-T

V E

merg

ing M

ark

ets

-5%

0%

5%

10%

15%

20%

25%

30%

0

400

800

1,200

1,600

2,000

2008 2009 2010 2011

Revenue EBIT EBIT margin

0%

10%

20%

30%

40%

50%

2006 2007 2008 2009 2010 2011

Czech Republic (15-54) Bulgaria (18-49)

Hungary (18-49) Pan-Baltic (15-49)

18

Free-TV Emerging Markets

Operating Results

• Sales up 8% at constant exchange rates in 2011 &

profits for the full year

• Ongoing investments in Hungary, Ghana &

Slovenia off-set profits in Baltics, Czech Republic

& Bulgaria

• Anticipated return to high growth & high margins

but recovery currently lagging W Europe

• Well-positioned overall in often duopolistic markets

Fre

e-T

V E

merg

ing M

ark

ets

(SEK million)

-500

0

500

1,000

1,500

2,000

2,500

2006 2007 2008 2009 2010 2011

Revenue EBIT

0%

5%

10%

15%

20%

25%

19

Participating in Russian Growth

CTC Media

Operating results (USD millions)

• 38.1% shareholding in Russia’s leading

independent TV broadcaster

• Equity stake acquired for USD 83 million -

equity market value of ~ USD 0.7 billion

• Co-Chairmanship & total of 4 Board seats

• 3 national Russian TV networks & 1.5x combined

power ratio = ~19% TV advertising market share

• Sales up 9% y/y in ruble terms to USD 766 million

in 2011 with OIBDA margin of 32.5%

• Cash dividend payments of USD 130 million in

2011 & USD 80 million in 2012

CTC Media Russian Ad sales growth

(RUB)

Audience share (4+)

Fre

e-T

V E

merg

ing M

ark

ets

0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

2007 2008 2009 2010 2011

Ad sales EBIT

48%

19%

32%

-3%

16%

33%

2006 2007 2008 2009 2010 2011

20 Pay-T

V N

ord

ic

21

Market Position

Premium Content Provider of

Choice

• MTG & 3rd party Free-TV channels

• MTG thematic sports channels – Viasat Football, Viasat Hockey, Viasat Motor,

Viast Golf, Viasat Sport HD

• MTG thematic movie channels – Viasat Film, Viasat Film Action, Viasat Film Nordic, Viasat

Film Family, Viasat Film Drama & Viasat Film Classic

• MTG thematic documentary channels – Viasat History, Viasat Nature,

Viasat Explorer, Viasat Crime

• Leading 3rd party premium channels – music, news, documentaries, kids, nature etc

• MTG & 3rd party HD channels

Pay-T

V N

ord

ic

22

The Evolving Opportunity

Technology Changes Consumer

Behaviour

Owned & Operated

Satellite Platform

Viasat Channels in

3rd Party Networks

Virtual Operator

in 3rd Party B’band Networks

Gatekeeper

Independent

Internet

Environment

Pay-T

V N

ord

ic

0

200

400

600

800

1,000

1,200

2006 2007 2008 2009 2010 2011

DTH Satellite 3'rd party network

23

Seizing the Opportunity

The “Platform Agnostic” Approach

Pay-T

V N

ord

ic

Premium subscriber development (000’s)

*IPTV subscribers only for 2006-2008; total 3’rd party network subscribers for 2009 and 2010

Jun 2008 Oct 2009 Mar 2010 Jun 2010 1991

24

Seizing the Opportunity

Growing Viasat...ellite

Pay-T

V N

ord

ic

Premium satellite ARPU (SEK)

Value-added services (000’s)

Premium satellite subscribers (000’s)

• Operating in Europe’s most competitive &

digitalised pay-TV market

• Satellite gradually losing share to other

distribution forms BUT Viasat gaining market

share in the satellite environment

• Clear premium pay-TV market leader

• Low churn levels following acquisition of key

sports rights + new channel launches

• Steadily rising premium satellite ARPU due to

price rises & increasing penetration of VAS

0

1,000

2,000

3,000

4,000

5,000

6,000

2006 2007 2008 2009 2010 2011

0

200

400

600

800

1,000

2006 2007 2008 2009 2010 2011

0

50

100

150

200

250

300

350

dec-11dec-10dec-09dec-08dec-07

Multi-room PVR HD

25

Seizing the Opportunity

Entertainment “at your Command”

First to Market with Full Service

‘Over-The-Top’ Solution

• Anytime Access all services ‘on demand’

• Anywhere Access subscription online

• Any Device Enjoy subscription on multiple

devices in and out of home

Pay-T

V N

ord

ic

Set -Top Box

PC/Mac

Mobile

Tablet Media

Players

OTT Set-Top box

Game consoles Embedded

TV Set

Applications

26

Pay-TV Nordic

Operating Results

• Top line growth driven by 3rd party subscriber

acquisition & rising satellite premium ARPU

• Margins stable due to combination of underlying

improvement with investments in sports rights,

new technologies & additional channels

• Highly cash generative & proven resilience to

economic cycle

• Revenues up 8% at constant exchange rates in

2011 with increased operating margin of 20%

Pay-T

V N

ord

ic

(SEK million)

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

2006 2007 2008 2009 2010 2011

Revenue EBIT EBIT margin

27 Pay-T

V E

merg

ing M

ark

ets

Market Position

Pioneering New Frontiers

28

2003 2004 2005 2006 2007 2008 2009 2010 2011

Countries 7 11 15 22 23 24 25 25 28

Channels 2 3 5 6 7 8 10 15 19

Satellite

platforms Baltics Ukraine Russia

29

Seizing the Opportunity

Growing the Subscriber Base

• Viasat is the only satellite Pay-TV operator in the

Baltics – premium offering with stable subscriber

base & ARPU

• Includes Ukrainian platform since Q1 2008 &

Russian platform since Q1 2010

Pay-T

V E

merg

ing M

ark

ets

Mini-pay subscriptions (millions) Satellite subscribers (000’s)

• Business launched in 2003 with sale of Viasat

movie & documentary channels to

3rd party networks in C&E Europe

• Nearly 65 million subscriptions to

19 Viasat movie, documentary and sports

channels to ~2,500 3rd party networks in

28 countries including US

• Launch of 4 pay-TV channels in Africa &

2 HD channels in CEE, Russia & CIS

0

100

200

300

400

500

600

2006 2007 2008 2009 2010 201110,000

20,000

30,000

40,000

50,000

60,000

70,000

2006 2007 2008 2009 2010 2011

30

Pay-TV Emerging Markets

Operating Results

• Top line growth currently driven by volume

(addition of satellite subscribers & mini-pay

subscriptions) rather than value (low prevailing

ARPU levels)

• Profitability of mini-pay channels business

supports ongoing investments in Ukrainian &

Russian satellite platforms

• Profitability impacted by full consolidation &

ongoing investments in Ukrainian platform from

July & inclusion of Russian platform from February

• Business highly geared to subscriber growth &

ARPU increases

• Revenues up 13% at constant exchange rates in

2011, with operating margin of 5%

Pay-T

V E

merg

ing M

ark

ets

(SEK million)

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

0

100

200

300

400

500

600

700

800

900

1,000

2006 2007 2008 2009 2010 2011

Revenue EBIT EBIT margin

31

32

Financial Performance

Flexible Position

SEK millions FY 2010

Sales 13,473

EBIT (incl. Associates) 2,544

Pre-tax profit -727

Net income from

continuing operations -1,289

Total net incl

discontinued ops -1,289

SEK millions FY 2011

Net cash flow from

operations 1,797

Cash flow to investing -115

Cash flow to financing -1,737

Net change in cash &

cash equivalents -55

SEK millions FY 2011

Total debt 1,592

Cash & equivalents 795

Net debt 797

Net debt / LTM

underlying EBITDA 0.3x

Available liquid funds 5,528

Income Cash flow Financial position

• FY2011 results impacted by SEK -

3,182 million of non-recurring items

• Annual tax rate of 25-30%

• Cash flow from operations stable y/y in

2011

• Receipt of USD 49 mn (SEK 319 mn)

of dividends from CTC Media in 2011

& intention to pay USD 80 mn in 2012

• SEK 1.5 billion of SEK 6.5 billion

unsecured 5 year revolving multi-

currency credit facility drawn as at

31 December 2011

• CAPEX running at <1% of sales

33

Capital Allocation

Reinvesting in Growth

Cash flows from Scandinavia invested into

Emerging Markets

• 1997: Launch of Baltic Free-TV operations

• 2000: Acquisition of 95% of Hungarian operation

• 2001: Acquisition of 75% of DTV in Russia

• 2002: Acquisition of 36% of CTC Media in Russia

• 2003: Launch of Mini-Pay business

• 2004: Launch of Baltic Pay-TV platform

• 2005: Acquisition of 50% of Prima TV in Czech Republic

• 2006: Acquisition of 100% of Slovenian operation

• 2007: Acquisition of 50% of Diema channels in Bulgaria

• 2008: Acquisition of 50% of pay-TV platform in Ukraine

• 2008: Acquisition of 100% of Nova TV in Bulgaria

• 2008: Launch of channel in Ghana (W Africa)

• 2010: Acquisition of 50% of pay-TV platform in Russia

• 2010: Acquisition of additional 35% of Viasat Ukraine

- Combined with ongoing launch of Free-TV & Pay-TV

channels every year

Fin

ancia

l R

esourc

es

34

Capital Allocation

Shareholder Returns

• 29% Return On Capital Employed for 2011

• 30% Return On Equity for 2011

• Increased cash dividend of SEK 9.00 per

share proposed to AGM in May 2012

• Board of Directors has adopted dividend

policy to distribute at least 30% of recurring

net profit to shareholders as annual

ordinary dividend

Fin

ancia

l R

esourc

es

Annual Cash dividends (SEK)

0

2

4

6

8

10

12

14

16

2007 2008 2009 2010 2011

Ordinary Extraordinary Proposed

35

36

The Lean & Mean

Broadcasting Machine

• Operationally geared growth company with balanced & diversified revenue mix

• Driving growth primarily through organic expansion & start-ups

• Challenger to incumbents in structurally evolving markets

• Successful multi-channel, multi-platform, multi-territory media house model

• Efficient integrated operating structure yields competitive advantage & synergies

• Investing healthy cash flows from Nordic region into emerging markets

• Strict cost control, cash management & capital allocation

• Strong & flexible financial position

• Delivering enhanced shareholder returns

Sum

mary

37

For Further Information, please visit www.mtg.se or contact:

MTG Investor Relations

Tel: +44 7768 440 414 / +44 759 009 8188

Email: investor.relations@mtg.se

Nasdaq OMX: ‘MTGA’, ‘MTGB’

Conta

ct

info

rmatio

n