Record sales driven by digital transformation Q4 2015 Highlights · Sales of SEK 4,545m (4,371) and operating income of SEK 434m (478) including M&A costs and adverse currency effects, but before SEK 63m (0) of non-recurring items · Net income from continuing operations of SEK 375m (380) and basic earnings per share of SEK 5.30 (5.34) · Total net income of SEK 375m (471) and total basic earnings per share of SEK 5.30 (6.70) · Cash flow from continuing operations of SEK 290m (256) · Net debt of SEK 2,124m (362) equivalent to 1.5x trailing 12 month recurring EBITDA · Board of Directors to propose increased annual cash dividend of SEK 11.50 (11.00) per share, representing pay-out ratio of 86% (57) of net income from continuing operations excluding non-recurring items Financial Overview +--------------------------+-------+-------+-------+-------+ |(SEKm) | 2015| 2014| 2015| 2014| | |Oct-Dec|Oct-Dec|Jan-Dec|Jan-Dec| +--------------------------+-------+-------+-------+-------+ |Net sales | 4,545| 4,371| 16,218| 15,746| +--------------------------+-------+-------+-------+-------+ |Growth at constant FX | 4%| 6%| 3%| 11%| +--------------------------+-------+-------+-------+-------+ |Organic growth at constant| 0%| 2%| 1%| 4%| |FX | | | | | +--------------------------+-------+-------+-------+-------+ |EBIT before non-recurring | 434| 478| 1,268| 1,290| |items | | | | | +--------------------------+-------+-------+-------+-------+ |Margin before non | 9.5%| 10.9%| 7.8%| 8.2%| |-recurring items | | | | | +--------------------------+-------+-------+-------+-------+ |Non-recurring items (NRI) | 63| 0| -512| -155| |* | | | | | +--------------------------+-------+-------+-------+-------+ |Total EBIT | 497| 477| 756| 1,135| +--------------------------+-------+-------+-------+-------+ |Net income, continuing | 375| 380| 533| 816| |operations | | | | | +--------------------------+-------+-------+-------+-------+ |Basic earnings per share, | 5.30| 5.34| 7.45| 11.75| |continuing operations | | | | | |(SEK) | | | | | +--------------------------+-------+-------+-------+-------+ |Net income, discontinued | 0| 91| -282| 357| |operations ** | | | | | +--------------------------+-------+-------+-------+-------+ |Total net income | 375| 471| 251| 1,172| +--------------------------+-------+-------+-------+-------+ |Total basic earnings per | 5.30| 6.70| 3.22| 17.10| |share (SEK) | | | | | +--------------------------+-------+-------+-------+-------+ |Net debt | 2,124| 362| 2,124| 362| +--------------------------+-------+-------+-------+-------+ |Cash flow from continuing | 290| 256| 1,051| 1,040| |operations | | | | | +--------------------------+-------+-------+-------+-------+ * Comprising a net capital gain from the sale of subsidiaries and revaluation of acquisition related liabilities in the fourth quarter; and a net capital gain from the sale of subsidiaries (including revaluations) and restructuring charges for the full year. Comprising in 2014 a non-cash net impairment charge, organisational restructuring charges and other related costs, and a net capital gain from the sale of a subsidiary. ** Comprising MTG’s interest in CTC Media, Inc, which is expected to be sold. President & CEO’s comments A year of further growth and improved underlying profitability 2015 was another record year for us. We have better products, more customers and higher sales than ever before. The combination of this growth, our ongoing transformation and the optimisation of our capital allocation, has enabled us to deliver almost stable profits for the year despite the near SEK 400m combined impact of FX headwinds and M&A costs. This clearly highlights that our products are performing very well, and that the transformation is working. We are proposing an increased dividend of SEK 11.50 per share, which is equivalent to an 86% pay-out ratio. A year of transformation We substantially transformed the Group in 2015, as part of our journey from a traditional broadcaster to a broad based digital entertainment company. This is built on the solid foundations of our core broadcasting businesses, which we have further strengthened by adding new sports, series and movie programming; investing in our technical platforms; and adding new channels and services. Viaplay, our streaming service, continues to perform above expectations following the investments that we have made. We have substantially enhanced the consumer product offering, and have now adjusted prices to reflect this. We have also taken leading global market positions in the eSports and MCN spaces, and these newly acquired businesses generated a near doubling of full year revenues to almost SEK 1bn on a pro forma basis. We have delivered on our commitment to review and optimise our business portfolio. We bought majority ownership in a number of digital businesses in the second half of the year, but also sold a cable-TV asset in Sweden, our free-TV operations in Hungary and our Russian & international pay-TV channels businesses, and we are in the process of exiting our investment in CTC Media. We have also changed the way that we are organised, our cost structure and the way that we buy content. We have moved from a product to a country based organisation, in order to bring ourselves closer to the customer, and have significantly improved the flexibility in our agreements to move programming between products, in order to improve monetisation levels. The reshaping of the organisation has involved painful but necessary decisions, and is expected to generate savings of approximately SEK 600m, of which the majority is being reinvested into the business and our future growth and development. Outlook Our aim is to accelerate our sales growth and increase our operating profits in 2016, due to the positive effects of the transformation process; the high level of operational gearing in our emerging market free-TV operations; and the positive sales impact of the content investments that we have made. These benefits will gradually compensate during the year for the anticipated SEK 250m of incremental adverse FX effects, and the additional costs for the new or extended sports rights that we have acquired. Jørgen Madsen Lindemann President & Chief Executive Officer “Our performance during 2015 clearly demonstrates that the transformation is working. Our products have never been stronger and we aim to grow both our sales and 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 5065 3938 UK: +44 (0) 20 3427 1914 US: +1 212 444 0481 The access pin code for the call is 1170425. 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 Matthew Hooper +44 7768 440 414) investors@mtg.com (or Stefan Lycke +46 73 699 27 14) London, 3 February 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 3 February 2016. This report has not been reviewed by the Group’s auditors.
Q4 2015 Full year report January−December
| Source: Modern Times Group MTG AB
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