Q1 2016 Interim report January – March

Record Q1 sales & transformation on track

Q1 2016 Highlights

  • Sales of SEK 3,826m (3,701) and operating income of SEK 159m (142) before SEK 0m (77) of items affecting comparability (IAC)
  • Net income from continuing operations of SEK 119m (164) and basic earnings per share of SEK 1.59 (2.61)
  • Total net income of SEK 50m (318) and total basic earnings per share of SEK 0.55 (4.92)
  • Cash flow from continuing operations of SEK 75m (111)
  • Net debt of SEK 2,688m (396) equivalent to 1.8x trailing 12 month EBITDA excl. IAC

Financial Overview

(SEKm) 2016
Q1
2015
Q1
2015
Full year
Net sales 3,826 3,701 16,218
Growth at constant FX 5.1% 1.0% 2.6%
Organic growth at constant FX 3.3% 0.7% 0.7%
EBIT before items affecting comparability 159 142 1,268
Margin before items affecting comparability 4.2% 3.8% 7.8%
Items affecting comparability (IAC) * - 77 -512
Total EBIT 159 219 756
Net income, continuing operations 119 164 533
Basic earnings per share, continuing operations (SEK) 1.59 2.61 7.45
Net income, discontinued operations ** -70 154 -282
Total net income 50 318 251
Total basic earnings per share (SEK) 0.55 4.92 3.22
Net debt 2,688 396 2,124
Cash flow from continuing operations 75 111 1,051

* Items affecting comparability (IAC) refers to material items and events related to changes in the Group’s structure or lines of business, which are relevant for understanding the Group’s development on a like-for-like basis. This line was previously titled “non-recurring items”. IAC in Q1 2015 comprised the capital gain from the sale of Swedish cable-TV company Sappa.

** Comprises MTG’s interest in CTC Media, Inc, which is expected to be divested.

President & CEO’s comments
The transformation continues

Record Q1 sales reflected continued high Viaplay subscriber intake, the addition of the new eSports and multi-channel network businesses, and continued high underlying growth in our international entertainment operations. Operating profits before IAC were up as our cost transformation initiatives and the operating leverage in the international entertainment businesses mitigated the ongoing adverse FX effects, investments in the new MTGx businesses, and a material step-up in sports costs. Our strategic transformation is progressing well and according to plan, with further developments right across the group.

Our products are stronger than ever. Audience shares are up in almost all of our markets; we have more subscribers across the Nordic region than ever before; and online views are at record levels. We have not only added a number of high impact international sports rights but Viaplay is also commissioning a number of new original series from our own award winning studios.

The portfolio realignment has also continued with the sale of our Ukrainian pay-TV business, and we expect to exit CTC Media with the anticipated cash return to shareholders during Q2. In addition, we have a new financial reporting structure, which reflects the way in which the Group is now organised and managed, as well as the way in which we expect the business to develop moving forward.

eSports breakthrough
2015 was a breakthrough year for eSports. The industry continued its rapid growth in revenues, tournaments, players and viewers, and eSports has arrived as a challenger to traditional sports, both in terms of size of fan base and global potential. Turtle is now available on multiple streaming platforms, and the Turtle and DreamHack events so far in 2016 are breaking all records. eSports is not the only digital product with global potential in the Group, now that Zoomin.TV and Splay are creating new web stars and distributing content all around the world.

Outlook
Our objective remains to accelerate our sales growth and increase our operating profits in 2016, despite the anticipated SEK 250m of incremental adverse FX effects and the additional costs for the new or extended sports rights that we have acquired. This is made possible by our products being more relevant and popular than ever; the positive effects of the transformation process; and the strong performance in our international entertainment business.

Jørgen Madsen Lindemann
President & Chief Executive Officer               

“Our products are stronger than ever. Audience shares are up in almost all of our markets; we have more subscribers across the Nordic region than ever before; and our online views are at record levels. We are on track to accelerate our sales growth and increase our operating profits in 2016.” 

    
Conference call

The company will host a conference call today at 09.00 Stockholm local time, 08.00 London local time and 03.00 New York local time. To participate in the conference call, please dial:

Sweden: +46 (0) 8 5033 6539
UK: +44 (0) 20 3427 1904
US: +1 646 254 3361

The access pin code for the call is 7010074. To listen to the conference call online and for further information, please visit www.mtg.com.
     

Any questions?
www.mtg.com
Facebook: facebook.com/MTGAB
Twitter: @mtgab
press@mtg.com (or Jessica Sjöberg +46 76 494 09 13)
investors@mtg.com (or Stefan Lycke +46 73 699 27 14)

Stockholm, 20 April 2016

Jørgen Madsen Lindemann, President & Chief Executive Officer

Modern Times Group MTG AB
Skeppsbron 18
P.O. Box 2094
SE-103 13 Stockholm, Sweden
Registration number: 556309-9158

MTG (Modern Times Group MTG AB (publ.)) is a leading international entertainment group. Our shares are listed on Nasdaq OMX Stockholm (‘MTGA’ and ‘MTGB’). The information in this announcement is that which MTG is required to disclose according to the Securities Market Act and/or the Financial Instruments Trading Act, and was released at 07:30 CET on 20 April 2016.

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About Us

MTG (Modern Times Group MTG AB (publ.)) is a leading international digital entertainment group and we are shaping the future of entertainment by connecting consumers with the content that they love in as many ways as possible. Our popular entertainment brands span Content Production, TV, Radio and eSports, and are available around the world. Born in Sweden, our shares are listed on Nasdaq Stockholm (‘MTGA’ and ‘MTGB’).

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