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2016-02-03

MTG: Q4 2015 Full year report January?December

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.

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http://news.cision.com/mtg/r/q4-2015-full-year-report-january-december,c...
http://mb.cision.com/Main/56/9906728/472042.pdf

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