Second Quarter Highlights

• Net sales up 8% year on year to SEK 3,870 (3,584) million – up 13% year on year at constant exchange rates
• Free-TV Scandinavia net sales up 13% year on year to SEK 1,116 (984) million – up 18% year on year at constant exchange rates  
• Operating income up 26% year on year to SEK 603 (478) million, with increased operating margin of 16% (13%) when excluding associated company income
• Total operating income up 23% year on year to SEK 726 (588) million when including SEK 123 (111) million of associated company income
• Pre-tax profit up 23% year on year to SEK 697 (566) million
• Net income up 20% year on year to SEK 522 (436) million
• Basic earnings per share up 17% year on year to SEK 7.58 (6.45)
• Dividend of SEK 363 million (SEK 5.50 per share) paid in May to shareholders for year ended 31 December 2009

Half Year Highlights 

• Net sales up 7% year on year to SEK 7,394 (6,920) million – up 12% year on year at constant exchange rates
• Free-TV Scandinavia net sales up 12% year on year to SEK 2,096 (1,870) million – up 17% year on year at constant exchange rates 
• Operating income up 30% year on year to SEK 1,018 (784) million, with increased operating margin of 14% (11%) when excluding associated company income
• Total operating income up 52% year on year to SEK 1,248 (822) million when including SEK 229 (38) million of associated company income
• Pre-tax profit up 53% year on year to SEK 1,165 (760) million
• Net income up 41% year on year to SEK 822 (582) million
• Basic earnings per share up 41% year on year to SEK 12.18 (8.65)

Hans-Holger Albrecht, President and Chief Executive Officer, commented: “Our record Q2 results again reflect particularly strong sales growth and healthy incremental margins for our free-TV operations in Scandinavia, with each country operation delivering year on year sales growth on the back of stable or higher target audience shares. Our Emerging Markets free-TV business returned to growth and was profitable in the quarter following advertising market share gains across all territories. The Nordic pay-TV business generated both IPTV subscriber and DTH premium ARPU growth, which resulted in higher margins, whilst the Emerging Markets pay-TV business also added subscribers and delivered a stable margin for the quarter. Overall, sales were up 13% year on year at constant exchange rates and profits were up 26% before associated company income, with an increased operating margin of 16%”.    

“We have paid out the increased 2009 dividend to shareholders and have received the second of the four anticipated dividend payments from CTC Media this year. We ended the quarter with a net debt to trailing twelve month EBITDA ratio of 1.2 times and SEK 3.5 billion of available liquid funds. We are also continuing to work towards the demerger and spin-off of our CDON Group Nordic internet retailing business to shareholders in the fourth quarter.” 

“Moving forward, advertising market conditions are improving across our markets and we aim to take further audience and market shares. We have also further strengthened our pay-TV offerings by becoming the only broadcaster to offer English Premier League football coverage across Scandinavia, by signing more virtual operator agreements with triple-play service providers, by adding to our online on demand content offering, and by investing in the development of our satellite platforms in the Baltics, Ukraine and Russia.” 

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 7136 2052
US: +1 212 444 0481
The access pin code for the conference is 7674485

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
Matthew Hooper
Tel: +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 a leading international entertainment broadcasting group with the largest geographical broadcast footprint in Europe. MTG's Viasat Broadcasting is the leading free-TV and pay-TV operator in Scandinavia and the Baltics, and has broadcasting operations in Bulgaria, Czech Republic, Hungary, Slovenia, Russia, Ukraine and Ghana. Viasat’s free-TV and pay-TV channels and pay-TV platforms attract a total of 125 million viewers in 31 countries. MTG is also the major shareholder in Russia’s largest independent television broadcaster (CTC Media – Nasdaq: CTCM), and the number one commercial radio operator and internet retailer of entertainment products in the Nordic region.  

Modern Times Group MTG AB Class A and B shares are listed on Nasdaq OMX Stockholm’s Large Cap market (‘MTGA’ and ‘MTGB’).

The information in this Interim Report is such which Modern Times Group MTG AB is required to disclose under the Securities Markets Act. This information was released for publication at 13.00 CET on 20 July 2010.