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Second Quarter Highlights
Half Year Highlights
Forward ExpectationsThe Group continues to expect its Nordic pay-TV business to grow its revenues at constant exchange rates in 2013, and to report an operating (EBIT) margin of approximately 10-12% for the full year 2013. The margin is expected to increase in 2014.
The Group’s Emerging Market pay-TV operations have delivered a better than anticipated result in the second quarter and will therefore exceed the previously provided expectation for a breakeven EBIT result for the full year 2013. The Group is continuing to invest as previously indicated and there is no change to the expectation for rising profitability levels in 2014.
Comment from President & CEOJørgen Madsen Lindemann, President and Chief Executive Officer, commented: “The accelerated sales growth at constant exchange rates in the second quarter clearly demonstrated the positive momentum across the business. We are investing in this momentum in order to drive future growth and build our market positions for the long term.”
“Our free-TV operations in the Emerging Markets delivered another quarter of outstanding growth, with strong underlying growth and advertising market share gains despite the soft overall advertising environment. The performance was boosted by the sales co-operations that we put in place at the beginning of the year. The Czech operations in particular reported high levels of growth, and we were the largest media house in the country by advertising market share for the second quarter in a row. Our Baltic and Bulgarian businesses also continued to grow their sales, and our Ghanaian operation reported its first quarterly profit since launch, which is a significant milestone for the Group as we prepare to expand into Tanzania in East Africa. We will continue to invest in programming in the second half of the year, in order to grow our audience shares.”
“Our Emerging Markets pay-TV operations also reported healthy growth in the quarter, and the higher than anticipated profitability levels did include some positive one-off, timing and currency related items in the quarter. We will therefore outperform our previous profitability expectations but we are also continuing to invest as planned in the further development of the business.”
“Our Scandinavian free-TV operations reported stable revenues and delivered higher viewing shares, which reflected the long term measures that we have been taking to enhance our programming schedules, add new channels and extend our linear and online reach. We are investing in order to further increase our audience shares and gradually regain advertising market shares moving forward, and this will include the planned launch of our third channel in Norway during the second half of the year.”
“The accelerated growth of our Nordic pay-TV business reflected the inclusion of the TV3 Sport channels, the growth in the Viaplay subscriber base and rising premium satellite ARPU. We are delivering in line with our expectations for the business as we continue to invest in premium content and Viaplay.”
“We have continued to sign a number of long term distribution agreements with the leading third party networks in the Nordic region, in order to further enhance our cooperation and deepen our relationships with key industry partners. These agreements with companies such as Telenor, TDC, Boxer, TV2 Norway and Riks TV indicate the benefit of the content investments we have made, and will increase the penetration of our free and pay channels across the region.”
“We have made significant investments over the last year and the result is an even stronger portfolio of content offerings for consumers. This has been reflected in the signing of a number of long term and strategic agreements with major Nordic distribution partners including Telenor, TDC, Boxer, TV2 Norway and Riks TV.”
“We have now also launched our MTGx digital innovation and acceleration platform. Video viewing is growing and driving global consumer internet traffic and usage, which is why we are investing to drive the development of our existing and future digital entertainment services, as well as the addition of new capabilities through joint ventures and acquisitions. We have also added to our MTG Studios content and distribution business by acquiring DRG and Novemberfilm in the quarter, and are committed to further building this key part of MTG.”
“We have continued to convert a high proportion of our earnings into cash flow, and to benefit from the ongoing dividend stream from CTC Media. We have now paid out our highest ever annual cash dividend and still ended the quarter with very low gearing. We are therefore in a strong position to continue to balance our investment in the future growth of the business and shareholder returns.”
Conference CallThe 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 5033 6538UK: +44(0)20 3427 1913US: +1212 444 0481
The access pin code for the call is 4811435
To listen to the conference call online and for further information please visit www.mtg.se.
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For further information, please visit www.mtg.se, or contact:
Jørgen Madsen Lindemann, President & Chief Executive OfficerMathias Hermansson, Chief Financial OfficerTel: +46 (0) 8 562 000 50
Investors & AnalystsTel: +46 (0) 73 699 2714Email: investor.relations@mtg.se
JournalistsTel: +46 (0) 73 699 2709Email: press@mtg.se
Modern Times Group MTG ABSkeppsbron 18P.O. Box 2094SE-103 13 Stockholm, SwedenRegistration number: 556309-9158
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 expectation 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.
Modern Times Group (MTG) is an international entertainment broadcasting group with operations that span four continents and include free-TV, pay-TV, radio and content production businesses. MTG’s Viasat Broadcasting operates free-TV and pay-TV channels, which are available on Viasat’s own satellite platforms and third party networks, and also distributes TV content over the internet. MTG is also the largest shareholder in CTC Media, which is Russia’s leading independent television broadcaster.
Modern Times Group is a growth company and generated net sales of SEK 13.3 billion in 2012. 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 Full Year report 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 July 2013.
