3. MTG - A MEDIA HOUSE WITH SCALE
REACH
OUR CONTENT REACHES MORE THAN
100 MILLION PEOPLE
THROUGH OUR ON AND OFFLINE FREE-TV AND PAY–TV
SERVICES IN 36 COUNTRIES
THROUGH A PORTFOLIO OF VERY STRONG, AND WELL
ESTABLISHED BRANDS
3
4. WE HAVE A GROWTH STRATEGY
BASED ON 3 PILLARS, WITH A RENEWED FOCUS
ON COST
GROWTH + VALUE CREATION
GEO
EXPANSION
DIGITAL
Growth in
emerging markets
Growth in online
M&A opportunities
Consumption
moving online
Main medium in
the future
Digital opportunities
beyond video
CONTENT
Value shifting to
content
Key differentiator
Value & growth
driver across
platforms
COST FOCUS / OPERATIONAL EXCELLENCE
4
5. OUR STRATEGIES IN EACH AREA
SUPPORT THE JOURNEY TO ACCELERATE IN
EACH PILLAR
GEO EXPANSION
DIGITAL
CONTENT
Content
Acq & OP
MTG
Content
Strategy
OTT TV
MTG
Studios
Africa FTA expansion
Mini-pay new markets
Free-TV expansion CEE
MTG Studios expansion
No1 in Viaplay & further expansion
AVOD expansion in Nordic s
AVOD rollout in CEE
MTGx: new services and expansion
Further Online growth in EM
Sports
MTGx
Creations
Multi-platform content acquisition
and monetization strategy
Premium sports rights to support
local strategies
Growth and M&A in Studios
MTGx studios/talent program
5
7. SPORTS AND OWN PRODUCTIONS
IS BECOMING INCREASINGLY IMPORTANT
HOURS OF CONTENT, SPLIT BY TYPE - LINEAR
> 20 YEARS
AGO
Sport
OP
ONLINE
MTG TODAY
(NORDIC ONLY)
THE FUTURE
4%
6%
Sport
OP
30%
?
Sport
10%
Acquisition
OP
90%
Acquisition
?
60%
Acquisition
?
Growth used to come from acquisition, but has now changed to more premium and locally produced content
7
8. WE ARE UNIQUELY POSITIONED
TO CAPITALIZE ON OUR CONTENT INVESTMENTS
Pay-TV
Free-TV
Channel
distr.
SVOD
AVOD
TVOD
8
9. STRONG TSR RECORD
FOCUS ON SUSTAINABLE STAKEHOLDER VALUE
Sales: +10% CAGR
EBIT: +24% CAGR
Average ROCE: 25%
15% TSR
CAGR (10Y)
Total distribution to
shareholders: SEK 8.1 bn
DRIVEN PRIMARILY BY STRONG GROWTH AND HIGH
RETURNS
9
10. OUR WORK TOWARDS LONG-TERM
RESPONSIBILITY & PERFORMANCE
Launch of Modern
Responsibility
Third party assurance of
modern responsibility
report
Publication of
first MR Report
2008
2004
2011
2005
Introduction of Code of
Conduct and Whistle
Blower Policy to all
employees
2010
•
Corporate Responsibility
report in accordance with
GRI framework
•
2013
2012/2013
Reporting CDP 88/100
(2013)
Included in DJSI
World
Europe
10
12. MODERN RESPONSIBILITY
SAVING THE WORLD & MAKING A PROFIT IS NOT AN
EITHER/OR PROPOSITION, IT IS A BOTH/AND PROPOSITION
Improved relationships with stakeholders
Enhanced Employee Relations
Enhanced Productivity and Innovation
Improved Reputation and Branding
Improved sustainable shareholder value
12
13. WE LISTEN, LEARN & ADAPT
TRANSPARENCY & MEASURING HAVE BEEN IN FOCUS
Transparency being honest not only
CUSTOMERS
about what we’re doing well but also where we
have room for improvement
Measuring and reporting on our
performance has helped us see where we can
improve, and enabled us to set targets and
action plans for those areas
SHAREHOLDERS
SUPPLIERS
NGO’s
EMPLOYEES
REGULATORS
13
14. MTG STUDIOS
“THE KINGDOM OF CONTENT”
PATRICK SVENSK, EVP OF CONTENT & CHAIRMAN OF MTG
STUDIOS
JENS ERIKSSON, PRESIDENT & COO OF MTG STUDIOS
JEREMY FOX, CEO OF DRG
5 NOVEMBER 2013
14
16. A GREAT BUSINESS
WITH A BRIGHT FUTURE
1
2
3
MEDIA CONSUMPTION GROWING, NEW
PLATFORMS REQUIRE CONTENT
PRODUCED
INCREASED NUMBER OF
CUSTOMERS/BROADCASTERS BUYING
CONTENT
LOCALLY PRODUCED CONTENT
BECOMING INCREASINGLY
IMPORTANT
Average time/day (US Adults, hh:mm)
Programming spend (EURm)
300
10:00
OTT
08:00
06:00
250
200
150
04:00
100
02:00
50
00:00
2010
2011
TV
2012
Digital (computer+mobile)
2013
Time
Linear
0
TV4 SE
TV2 NO
2006
MTV FI
2011
16
TV2 DK
17. A GREAT BUSINESS
MACRO TRENDS IN FAVOUR
Production
revenues
Number of
productions
Revenue per
production
+
Distribution/
IP revenues
and R&D ROI
Content
production
EBIT
Costs
Tech costs
Other costs
17
18. A GREAT BUSINESS
HEALTHY MARGINS AND GREAT RETURNS
(2012,
SEKM)
FREMANTLEMEDIA
ITV STUDIOS
RED ARROW
Owner
RTL Group
ITV
ProSiebenSat.1
Revenue
14,892
7,643
830
EBITA
1,201
1,149
37
Margin
8%
15%
3%
MARGIN BRIDGE EXAMPLE
Base case
Hit production Hit distribution Boosted margin
18
19. CURRENT LOOK OF THE STUDIOS
Denmark
PRODUCTION HOUSE
Norway
Holland
Bulgaria
Slovenia
Romania
Serbia
Czech Rep.
Costa Rica
Hungary
Sweden
Latvia
Estonia
Lithuania
19
20. WE ARE NOW A SCALE PLAYER
FOLLOWING RECENT ACQUISITIONS
REVENUES OF SEK 1.7 BN (PROFORMA 2012)…
…GENERATED FROM 30 COMPANIES…
…BASED IN 15 COUNTRIES
PRODUCING >3,500 HOURS OF CONTENT ANNUALLY…
…WITH 60 FORMATS SOLD TO >80 COUNTRIES WORLDWIDE
Produced formats
Recurring series
Revenue split by
business type
49%
FULL YEAR 2012
proforma figures
51%
No. in-house formats
No. 3rd party formats
5%
18%
35%
Revenue split by
geographic area
14%
14%
65%
No. recurring sales
No. new sales
68%
TV-production
Distribution
Non-broadcast
81%
Scandi
CEE
UK (distribution only)
20
21. …THAT IS WELL POSITIONED
TOP 5 TV CONTENT PRODUCERS (RANKED BY SALES) IN
THE NORDICS (2012)
TOP 10 CONTENT DISTRIBUTORS AS RATED BY UK
INDEPENDENT TV PRODUCERS
HIGHEST RATED DISTRIBUTOR
1
BBC WW
1
BBC WW
2
ITV Global
2
DRG
3
DRG
3
Zodiak Rights
3
Zodiak Rights
4
ITV Global
3
Shine
5
Fremantle Enterprises
6
Fremantle Enterprises
6
Endemol WW
6
Endemol WW
7
Electric Sky
6
DCD Media
8
Passion Distribution
6
+
MOST USED DISTRIBUTOR
All3Media
9
All3Media
10
Passion Distribution
9
Sky Vision
Source: Televisual Distributor Poll, September 2013
21
22. WHERE ARE WE, AND HOW DO WE
OPERATE?
CONTENT
ORIGINATION &
CREATION
RELATIONSHIPS
WITH ALL MAJOR
BROADCASTERS
GLOBAL CONTENT
DISTRIBUTION
THE FARM
THE BAR
FAME
FACTORY
25%
75%
External sales
Internal sales
22
23. KEY FOCUS AREAS
MARKET ATTRACTIVENESS
Reality/Lifestyle
Studio ent. &
quiz shows
Humour
Market attractiveness
High
Medium
Children
High
Reality/Lifestyle
Current affairs,
infotainment
Documentary
Medium
Humour,
entertainment
Scripted
News
Low
MTG Studios strength
Sport
Current affairs
& infotainment
Low
Quiz game show
News
Sport
MTG STUDIOS STRENGTH
Scripted
Children
Documentary
23
24. BOLT-ON ACQUISITIONS
TO TURBO-FUEL GROWTH
DRG and Nice has transformed our business
Nice – adding scale
DRG – adding reach
However we are still in expansion mode
With a lot of focus on risk management
Content portfolio management
People’s business – or is it?
MTG Studios current footprint.
24
25. MAJOR SCALE ADVANTAGES
Local scale advantages
Organization designed for expansion
Multiple brands for independency
Local cost synergies
SYNERGIES EXAMPLE FROM AN ACQUISITION
Global scale advantages
Combined catalogues
Combined customers
REVENUE SYNERGIES
•
Allocation of production staff
to other companies
•
MTG Studios producing a
target’s IP outside Scandi.
•
Cost savings on
administration and format
acquisitions
•
Target gaining new
productions from MTG IP
(DRG)
•
DRG distributing target’s IP
Scale synergies in portfolio
COST SYNERGIES
High volume global hits
MTG
GROUP
SYNERGIES
•
Internalization of target’s production margins on
orders from MTG TV.
25
26. STRATEGIC INVESTMENTS
FOUR STRATEGIC CORNERSTONES
Investing in creation
of IP content
Investing in access to
3rd party content
Exploitation of portfolio
Exploitation of portfolio
through production
in other territories
through distribution
to other territories
Filling the creative
pipeline
Tapping the creative
pipeline
Building
the product
portfolio
Monetizing
the product
portfolio
26
27. STRATEGIC INVESTMENTS
THE CORNERSTONES AND PIPELINE FLOW
Access to 3rd
party IP
Exploitation
through
production
FOUR STRATEGIC CORNERSTONES
THE PIPELINE
Creation of IP
Exploitation
through
distribution
27
30. STRATEGIC INVESTMENTS
THE IP FLOW MODEL
Access to 3rd
party IP
Exploitation
through
production
Exploitation
through
distribution
30
FOUR STRATEGIC CORNERSTONES
Increasing the pipeline
flow volume is key,
as it is the way to finding
new global hits
THE PIPELINE
Creation of IP
32. CASE 1: DEVELOPMENT & PRODUCTION
WHAT IS A FORMAT?
A show built on a
”recipe” is IP
IP (Intellectual Property) can be sold and
exploited. Ingredients can be e.g.
characters, activities, rules and a goal in
the show
Coming up with a
global hit - Robinson,
Idol, X-factor - can be
extremely lucrative
THE FARM – A GREAT SUCCESS
3600 episodes produced since launch
100 licenses sold in total
50 territories worldwide have aired the format
12 consecutive years on air (and counting)
PROMO
32
33. CASE 2: DRG ADDS KEY CAPABILITIES
Content acquisition by territory (2013)
Broad brand concentration (2013)
Australia RoW
5%
4%
Top 10 brands
47%
US
29%
UK
62%
Diverse catalogue
Fiction (43%)
Factual (43%)
Formats (14%)
Note: As a % of revenues in 2013
33
34. CASE 2: DRG ADDS KEY CAPABILITIES
1
ACQUIRE PROGRAMMES FROM
PRODUCERS AND OTHER CONTENT
OWNERS – BUILD PORTFOLIO
2
SELL TO BROADCASTERS AND
OTHER DISTRIBUTION OUTLETS
Etcetera…
34
35. CASE 2: DRG ADDS KEY CAPABILITIES
BEING A PART OF THE MTG STUDIOS GROUP
DRG used to do business in the acquisitions/marketing/sales part of the creative process.
Now backed by MTG – able to fund and enable early stage project development
+
New business area
Previous business area
35
36. CASE 2: DRG ADDS KEY CAPABILITIES
PROMO: Never Ever Do This at Home
36
37. CASE 3: SCRIPTED PRODUCTION
INCREASING EFFORTS IN A GROWING SEGMENT
Different model than the “general” ecosystem
Boosted by the acquisition of Nice
Upsides for MTG Studios
DRG
Scale synergies
TRAILER:
The Hundred-Year-Old
Finance
Cost/
Profit
COST
Production
lifespan
Scripted
C2
PROFIT
PROFIT
C1
MTG Studios becoming a major player
CUSTOMER
Entertainment TV
COST
Finance
Cost/
Profit
BACKEND
37
38. CASE 4: ”CUSTOMER 2.0”
BRANDS ARE BECOMING BROADCASTERS
And many more…
An additional growth pocket
Broader and more diverse customer base
In-house competence for full-service
communication
PROMO:
The Last Big Adventure
Storytellers
Editors
Commercials
Event
38
39. CASE 5: LCC/HUB PRODUCTIONS
Paprika Latino is an important corner stone
Provides us with a footprint in CEE
Provides us with a LCC alternative
Potential LC Hub productions
TRANSFERABLE COSTS
”THE CEE EFFECT”
Up to 35% lower production
costs than Scandinavia
SHAREABLE COSTS
”THE HUB EFFECT”
Up to 30% cost reduction with
back-to-back or co-production
THE IDEAL PRODUCTION IS 50%
CHEAPER BOTTOM LINE
39
40. SUMMARY:
HOW TO RULE THE KINGDOM OF CONTENT
Satisfying macro level
market conditions
Leading position in a
globally strong IP center
– Content is without a doubt the key to the future
– Coming from the right angle
”Gold panning” for hits
through large-scale IP flow
– Hunting for hits to boost margins
Extensive network to exploit
all great IP worldwide
– Paving ground for global presence
We have laid a strong foundation for higher growth and increasing returns,
as we will grow to become a true and successful global player
40