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1
1.
Born 1972
Joined MTG in 1999
What I love: The feeling of WINNING
What I hate: Surprises, especially financial
and negative…
Favourite quote: “Cash is Cash – Everything
else is just an opinion.”
Mathias
Hermansson
Chief Financial
Officer
Value creation the MTG way
3
Revenues & EBIT
SEKm
0%
3%
6%
9%
12%
15%
18%
21%
24%
27%
30%
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
Revenues EBIT EBIT-margin
6%
15%
21% 21%
29%
34% 31%
15%
25%
29%
Excluding non-recurring items
Total EBIT excluding discontinued operations and one-offs
Return on capital employed
4
Consistent outperformance
Source: Broker research, Factset
CTC Media MTG
TVN
ProSiebenSat1 BskyB
M6 ITV
TF1
Mediaset
Mediaset Esp Antena 3
CME
-35%
-30%
-25%
-20%
-15%
-10%
-5%
0%
5%
10%
15%
20%
-5% 0% 5% 10% 15% 20% 25%
EB
IT G
row
th C
AG
R 0
5-1
1
Revenue Growth CAGR 05-11
5
Innovation driving growth
Secondary channels Tango TV launched in Lithuania
The mini-pay wholesale channel business is launched in Eastern Europe
Launch of the first IPTV services in Europe, Launch of Viasat PVR
Viasat DTH platform launched in the Baltics
Launch of TV6 in Sweden, further expansion of the mini-pay business in CEE
Launch of the first DTH pay-TV platform in Ukraine, viasatondemand launched
Virtual IPTV Operator invented, Launch of free-TV in Ghana (W Africa)
Launch of several new channels (Viasat Hockey, TV3 PULS, Prima COOL)
Launch of TV10 in Sweden, 3D TV introduced in the Nordics
Launch of online streaming OTT offering Viaplay in the Nordics
Launch of the Viaplay set-top-box in Sweden…
Made To Grow... organically
6
Strict cost control
Underlying strict cost control, while balancing
organic investments to drive growth
0
2
4
6
8
10
12
14
16
Q1'09
Q2'09
Q3'09
Q4'09
Q1'10
Q2'10
Q3'10
Q4'10
Q1'11
Q2'11
Q3'11
Q4'11
Q1'12
Sales Costs
Y-o
-Y g
row
th a
t c
on
sta
nt
FX
ra
te
(%)
• <0.5% annual cost
increase last three
years when
excluding content
costs & variable
costs
7
Cash is king
Net operating cash flow (SEKm)
0%
20%
40%
60%
80%
100%
0
500
1,000
1,500
2,000
2,500
Net operating cash flow % of EBITDA converted
0
20
40
60
80
100
120
140
Dividends received from CTCM
(SEKm)
8
Managing working capital down
• Significant improvements
in inventory management
• Tighter management of
supplier payments terms
and collection routines
• Seasonal fluctuations
within calendar year
Working capital development
(% of revenues)
0%
2%
4%
6%
8%
10%
9
Asset light business model
• Capex has historically
represented a low
percentage of revenues
and this is expected to
continue
Capex development (SEKm)
0.0%
0.1%
0.1%
0.2%
0.2%
0.3%
0.3%
0.4%
0.4%
0
50
100
150
200
250
300
350
400
Capex % of sales
10
Deleveraging at the same time
0
1,000
2,000
3,000
4,000
5,000
Q1 '0
9
Q2 '0
9
Q3 '0
9
Q4 '0
9
Q1 '1
0
Q2 '1
0
Q3 '1
0
Q4 '1
0
Q1 '1
1
Q2 '1
1
Q3 '1
1
Q4 '1
1
Q1 '1
2
0
1,000
2,000
3,000
4,000
5,000
6,000
Q1 '0
9
Q2 '0
9
Q3 '0
9
Q4 '0
9
Q1 '1
0
Q2 '1
0
Q3 '1
0
Q4 '1
0
Q1 '1
1
Q2 '1
1
Q3 '1
1
Q4 '1
1
Q1 '1
2
(SEKm)
(SEKm)
Net Debt
Available Liquid Funds
• Net debt below SEK 750
million as at 31 March
2012
• SEK 6.5 billion revolving
credit facility matures in
2015
• More than SEK 5.5 billion
of liquid funds available
within less than a week
11
While creating greater flexibility
EBITDA excluding CDON Group, DTV, TV Shop and non-recurring items, inlcluding
associated income
Net debt / EBITDA
M6 -1,0
CTC Media -0,5
Mediaset Esp. -0,1
ITV -0,1
TF1 0,1
MTG 0,3
Antena 3 0,6
BskyB 0,7
ProSiebenSat.1 2,1
Mediaset 2,4
TVN 4,0
CME 6,8
Average 1,3
Net debt / EBITDA
(2011)
Source: Broker research, Factset
0.0
0.0
0.0
0.1
0.1
0.1
0.1
0.1
0.2
12
For investing in growth &
returning cash to shareholders
• Primary focus is on growth and reinvesting cash flow into operations
+ M&A
• Balanced with TSR commitment – reflected in newly adopted policy to
distribute at least 30% of recurring net profit as annual ordinary
dividend
Cash distribution
(SEK)
0.00
0.05
0.10
0.15
0.20
0.25
0.30
0.35
0.40
2006 2007 2008 2009 2010 2011
Buybacks (value per share)
CDON spin-off
Extraordinary dividend pershare
Ordinary dividend per share
Net cash flow per share
EPS adj (excluding one-offs)
30% of EPS adj (excludingone-offs)
13
Allocating capital to structurally
growing regions
Cash flows from Scandinavia invested into Emerging
Markets
2000: Acquisition of 95% of Hungarian operation
2001: Acquisition of 75% of DTV in Russia
2002: Acquisition of 36% of CTC Media in Russia
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
2010: Acquisition of 50% of pay-TV platform in Russia
2010: Acquisition of additional 35% of Viasat Ukraine
2012: Acquisition of 100% of LNT free-TV group in Latvia
M&A team of 4 professionals hired from Nordic & international
investment banks
• Focus on market consolidation opportunities across all existing
markets, acquisitions in additional CEE & African territories and
content production businesses.
14
And the show must go on
Key investment criteria
• Broadcasting or broadcasting related assets
• Markets / companies with structural growth opportunities
• Synergies with existing operations
• Strong incremental profitability model
• Ability to grow with the flow
• ROI hurdle rates
• Contrarian & Opportunistic strategy – now is the time
• Learn from previous successes & mistakes
X
X
X
X
X
15
So, what does the future hold?
Key focus is long term growth and value creation
…the MTG way
Strong cash generation to continue
• Continued low working capital and capex as percentage of sales
• Expected total CTC Media cash dividends of USD 80m during 2012
Commitment to continue to invest in future growth
• Re-investment in current businesses + new start-ups to ‘grow with the flow’
• Explore consolidation, new market and content production M&A opportunities
Commitment to deliver shareholder returns
• Dividend policy to distribute at least 30% of recurring net profit to shareholders
• Buy-back mandate in place for up to 10% of shares
16
CH
AP
TE
R N
AM
E