Record Results – Double Digit Sales Growth & Higher Margins

First Quarter Highlights[1]

• Net sales up 10% year on year at constant exchange rates and up 2% year on year at reported exchange rates to SEK 3,125 (3,054) million
• Operating income up 15% year on year to SEK 432 (377) million, with increased operating margin of 14% (12%), when excluding SEK 253 (107) million of associated company income
• Total operating income up 42% year on year to SEK 684 (483) million
• Pre-tax profits up 54% year on year to SEK 671 (436) million
• Net income from continuing operations up 78% year on year to SEK 490 (275) million
• Total net income up 63% year on year to SEK 490 (300) million
• Basic earnings per share from continuing operations up 74% year on year to SEK 7.35 (4.22)
• Total basic earnings per share up 60% year on year to SEK 7.35 (4.60)
• Increased quarterly dividend payment of SEK 61 (28) million from CTC Media, Inc.

Hans-Holger Albrecht, President and Chief Executive Officer, commented: “Our Q1 sales and operating profits are at record levels following 10% sales growth at constant exchange rates and a 15% increase in operating income excluding associates. All of our business segments delivered sales growth at constant exchange rates and the group operating margin increased to 14% excluding associates.

“The Scandinavian TV advertising markets have continued their strong development with price increases in each country, which enabled us to generate 11% sales growth at constant exchange rates and a 25% operating margin for our free-TV business, whilst our Nordic pay-TV Nordic business grew its sales by 10% at constant exchange rates and delivered an increased margin of 19%. The recovery in advertising spending in the emerging markets is lagging and, with the exception of the Baltics, we are yet to see a return to sustained market growth, but we are taking market share in almost all of our operating territories. At the same time, the profits that we are making in our  emerging markets wholesale pay-TV channel business, which now has over 58 million subscriptions, are being reinvested into the development of our exciting new satellite platforms in Ukraine and Russia, which are developing according to plan.

“Our content is today more broadly available than ever and we have the largest geographical broadcast footprint in Europe. Our 28 free-TV channels in 11 countries, 38 pay-TV channels in 32 countries, and satellite platforms in 9 countries, attract a total of 125 million viewers. In the first quarter alone, we launched a new free-TV channel in the Czech Republic, introduced several new HD channels and produced the first live 3D broadcast of a sports event in Scandinavia, launched 4 new pay-TV channels in Africa, and fully introduced our Viaplay online on-demand video streaming service that is available to any web-connected device in Scandinavia.

“All in all then, we are on track with our strategic objectives and are maintaining our discipline of investing in long term and profitable growth. We have a healthy financial position and have used our cash flows to invest in our existing operations, expand into new areas, further reduce our already low gearing levels, and propose an increased annual dividend. We continue to review opportunities to enhance our competitive market positions and enter attractive new markets.”

***

The company will host a conference call today at 15.00 Stockholm local time, 14.00 London local time and 09.00 New York local time. To participate in the conference call, please dial:

Sweden:         +46 (0)8 5051 3785
International:   +44 (0)20 7138 0826
US:                +1 212 444 0481

The access pin code for the conference is 5877242

To listen to the conference call online, please go to www.mtg.se. 

*** 

For further information, please visit www.mtg.se, or contact:
Hans-Holger Albrecht, President & Chief Executive Officer
Mathias Hermansson, Chief Financial Officer
Tel: +46 (0) 8 562 000 50

Investor & Analyst Enquiries:
Jacob Waern / Matthew Hooper
Tel: +46 (0) 736 99 29 91 / +44 (0) 7768 440 414
Email: investor.relations@mtg.se

Press Enquiries
Bert Willborg  
Tel: +44 (0) 7912 280 850
Email: bert.willborg@mtg.se           

Modern Times Group is an international entertainment broadcasting group with the largest geographical broadcast footprint in Europe. MTG's Viasat Broadcasting operates 28 free-TV channels in 11 countries and  38 pay-TV channels in 32 countries. The pay-TV channels are distributed on Viasat’s own satellite platforms in 9 countries, as well as on third party broadcast networks (including cable, satellite and IPTV) and over the open internet. These free-TV and pay-TV channels and pay-TV platforms attract a total of 125 million viewers in 33 countries. MTG is also the largest shareholder in Russia’s leading independent television broadcaster (CTC Media – Nasdaq: CTCM).

Modern Times Group is a growth company and generated SEK 13.1 billion of sales and SEK 2.4 billion of operating income in 2010. MTG’s Class A and B shares are listed on Nasdaq OMX Stockholm’s Large Cap index under the symbols ‘MTGA’ and ‘MTGB’.

The information in this announcement is that which Modern Times Group MTG AB is required to disclose under the Securities Market Act and/or the Financial Instruments Trading Act. It was released for publication at 13.00 CET on 18 April 2011.
 

[1] This financial report includes the effects of the demerger and distribution of former MTG subsidiary CDON Group AB (‘CDON Group’) in December 2010. CDON Group’s results have been excluded from MTG’s operating results and cash flows for 2010, with the exception of the reported net income from discontinued operations in the Group’s income statements and the net cash flow to financing activities in the Group’s cash flow statements.