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2014-04-25

MTG: Q1 - Record sales with double digit growth

Q1 2014 Highlights

· Net sales up 13% at constant FX & up 5% on an organic basis
· Winter Olympics coverage in Sweden drives accelerated organic
growth in Free-TV Scandinavia and Pay-TV Nordic revenues

· Double digit organic growth in Pay-TV Emerging markets & content
production businesses

· Operating income (EBIT) of SEK 118m (221) excluding associated
company & JV income following investments in Olympics coverage, new
channel launches and MTGx

· Total EBIT of SEK 301m (454) including associated & JV company
income of SEK 183m (233)

· Net income of SEK 159m (334) and basic earnings per share of SEK
2.43 (4.73)

· Cash flow from operations of SEK 195m (267) and net debt position
of SEK 738m (net cash of 17)

Financial Overview

+------------------------------+-------+-------+-------+
|(SEKm) | 2014| 2013| 2013|
| |Jan-Mar|Jan-Mar|Jan-Dec|
+------------------------------+-------+-------+-------+
|Net sales | 3,597| 3,209| 14,073|
+------------------------------+-------+-------+-------+
|Growth at constant FX | 13%| 1%| 8%|
+------------------------------+-------+-------+-------+
|Organic growth at constant FX | 5%| 2%| 5%|
+------------------------------+-------+-------+-------+
|EBIT before associates & JV | 118| 221| 1,309|
|income and non-recurring items| | | |
+------------------------------+-------+-------+-------+
|Margin before associates & JV | 3.3%| 6.9%| 9.3%|
|income and non-recurring items| | | |
+------------------------------+-------+-------+-------+
|Associated & JV company income| 183| 233| 576|
|* | | | |
+------------------------------+-------+-------+-------+
|EBIT before non-recurring | 301| 454| 1,885|
|items | | | |
+------------------------------+-------+-------+-------+
|Non-recurring items | -| -| -147|
+------------------------------+-------+-------+-------+
|Total EBIT | 301| 454| 1,738|
+------------------------------+-------+-------+-------+
|Net Income | 159| 334| 1,168|
+------------------------------+-------+-------+-------+
|Basic Earnings per Share (SEK)| 2.43| 4.73| 16.39|
+------------------------------+-------+-------+-------+
|Cash flow from operations | 195| 269| 1,348|
+------------------------------+-------+-------+-------+

* Including MTG's SEK 74m (USD 11.5m) Q1 2014 participation in USD
29.9m of non-recurring charges incurred by associated company CTC
Media in Q4 2013

Please note that MTG's 50% ownership interest in the Raduga has been
accounted for as an equity participation with effect from 1 January
2014 due to changes in the IFRS rules (IFRS 11 - Joint Arrangements).
Results for prior periods have been adjusted in the Group's reporting
for the purposes of comparison.

President & CEO's comments

An Olympic quarter
The highlight of the quarter was our coverage in Sweden of the Sochi
Winter Olympics. This was the most watched winter Olympics and most
successful for the Swedish team ever, and we showed every single
minute for the first time ever. We achieved record free-TV audience
shares of 60% in Sweden during the games and the subscriber intake at
Viaplay reached new all-time high levels.

Continued growth in volatile markets
We delivered 13% constant FX sales growth as the investments that we
made last year accelerated our development. This was driven by a mix
of organic growth in almost all of our businesses and the acquisition
of key new businesses such as Nice Entertainment. Advertising market
growth levels remain volatile across our 11 free-TV markets, but we
expect to increase our audience and market shares in almost all
territories in 2014. We are however running against tough comparisons
in the Czech Republic in particular, following the exceptionally high
levels of growth in 2013. We continue to see healthy subscriber
growth levels in both our Nordic and emerging market pay-TV
businesses and reported higher year on year profits for both
businesses. Overall Group profitability levels reflected the
investments that we have made in the Olympics coverage, new channels
in Norway and Tanzania and our Group wide digital ventures, as well
as the seasonality of our now much larger content production
business.

In terms of outlook, we continue to expect a higher Nordic pay-TV
operating margin in 2014 given the positive sales and profit momentum
that we are seeing. At the same time, we are carefully monitoring the
effects of the geopolitical situation in Ukraine but we remain
committed to our investments and operations in the region given the
substantial market opportunity and our well-established business
positions. Based on current exchange rates, we would not expect an
increase in pay-TV emerging markets profits in 2014 at this stage.

Building momentum
We have merged Viaplay and MTGx to create a leading digital
entertainment powerhouse that can drive and benefit from the ever
increasing levels of online video consumption. Our goal is clear - to
be the leading digital entertainment house in each of our markets,
which we will achieve through our organic development and
acquisitions. I am also excited about the new pan-Scandinavian
multi-platform content deal that we have signed with Sony Pictures,
because it is the first of its kind, demonstrates the benefit of our
integrated structure, and is another example of how we are shaping
the future of entertainment with our partners and for our customers.
We simply want to make fantastic content, channels and services
available as broadly as possible, which is why we have also signed
new long term deals with a wide range of third party operators.

We are balancing organic investments with cash returns to shareholders
and maintaining the flexibility to acquire attractive businesses. We
ended the quarter with SEK 6.3 billion of available liquid funds, a
0.4 times ratio of net debt to trailing twelve month EBITDA, and are
proposing our highest ever cash dividend. So we are well-positioned
to continue to invest in the growth of the business, in order to
drive future earnings and returns.

Jørgen Madsen Lindemann

President & Chief Executive Officer

"Next up is our planned acquisition of 75% of Trace - one of the
leading youth entertainment brands in Africa and present in 160
countries worldwide"

* * *

Conference Call

The company will host a conference call today at 15.00 Stockholm local
time, 14.00 London local time and 09.00 New York local time. To
participate in the conference call, please dial:

Sweden: +46 (0) 8 5065 3936
UK: +44 (0) 20 3427 1908
US: +1 646 254 3361

The access pin code for the call is 9161971. To listen to the
conference call online and for further information please visit
www.mtg.se

* * *

For further information, please visit www.mtg.se, or contact:

Jørgen Madsen Lindemann, President & Chief Executive Officer
Mathias Hermansson, Chief Financial Officer
Tel: +46 (0) 8 562 000 50

Investors & Analysts
Tel: +46 (0) 73 699 2714
Email: investor.relations@mtg.se

Journalists
Tel: +46 (0) 73 699 2709
Email: press@mtg.se

Stockholm, 25 April 2014

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

Modern Times Group (MTG) is an international entertainment group with
operations that span four continents and include free-TV, pay-TV,
radio and content production businesses. MTG's Viasat Broadcasting
operates free-TV and pay-TV channels, which are available on Viasat's
own satellite platforms and third party networks, and also
distributes TV content over the internet. MTG is also the largest
shareholder in CTC Media, which is Russia's leading independent
television broadcaster.

Modern Times Group is a growth company and generated net sales of SEK
14.1 billion in 2013. MTG's Class A and B shares are listed on Nasdaq
OMX Stockholm's Large Cap index under the symbols `MTGA' and `MTGB'.

The information in this interim report is that which Modern Times
Group MTG AB (publ) shall disclose in accordance with the Securities
Market Act and/or the law on Trading in Financial Instruments, and
was published at 13.00 CET on 25 April 2014.

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