MTG: “A year of transformation”
February 3, 2016
Modern Times Group (MTG) has reported that customer growth, its business transformation and the optimisation of its capital allocation enabled it to keep profits stable in 2015.
MTG reported Q4 Sales of SEK 4,545 million (4,371) and operating income of SEK 434 million (478) including M&A costs and adverse currency effects, but before SEK 63 million (0) of non-recurring items.
Net income from continuing operations of SEK 375 million (380) and basic earnings per share of SEK 5.30 (5.34). Total net income of SEK 375 million (471) and total basic earnings per share of SEK 5.30 (6.70).
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.
Jørgen Madsen Lindemann, President & CEO commented: “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 per cent pay-out ratio.
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 1 billion 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 600 million, of which the majority is being reinvested into the business and our future growth and development.”