Stable sales & increased cash flow in Q2

19 July 2012 – Modern Times Group MTG AB (publ.) (“MTG” or “the Group”) (Nasdaq
OMX Stockholm Large Cap Market: MTGA, MTGB) today announced its financial
results for the second quarter and six months ended 30 June 2012.
Second Quarter Highlights

  · Net sales of SEK 3,517 (3,531) million - stable year on year at reported and
constant exchange rates
  · Operating income of SEK 552 (593) million when excluding associated company
income
  · Total operating income of SEK 684 (688) million when including SEK 133 (95)
million of associated company income
  · Pre-tax profit of SEK 587 (681) million including SEK -88 (30) million
negative non-cash impact of change in value of option element of CDON
convertible bond
  · Net income of SEK 454 (479) million
  · Basic earnings per share of SEK 6.35 (6.84)
  · Receipt of SEK 55 (84) million (USD 8 (13) million) quarterly cash dividend
payment from associated company CTC Media, Inc. (‘CTC Media’)
  · Net cash flow from operations of SEK 728 (705) million
  · Net debt reduced by 55% year on year to SEK 778 (1,716) million despite
payment of increased SEK 600 (498) million annual dividend

Half Year Highlights

  · Net sales of SEK 6,776 (6,656) million - up 2% year on year at reported and
constant exchange rates
  · Operating income of SEK 892 (1,025) million when excluding associated
company income
  · Total operating income of SEK 1,226 (1,374) million when including SEK 334
(349) million of associated company income
  · Pre-tax profit of SEK 1,178 (1,352) million including SEK -6 (34) million
negative non-cash impact of change in value of option element of CDON
convertible bond
  · Net income of SEK 908 (969) million
  · Basic earnings per share of SEK 13.04 (14.19)
  · Receipt of SEK 107 (145) million (USD 16 (23) million) of quarterly cash
dividend payments from associated company CTC Media
  · Net cash flow from operations of SEK 793 (828) million

Hans-Holger Albrecht, President and Chief Executive Officer, commented: “The
second quarter results again demonstrate the benefit of our integrated business
model, with the long term growth in our subscription funded pay-TV businesses
offsetting the short term decline in our advertising funded free-TV businesses.

“We have further enhanced our content offering in 2012 with the addition or
extension of key Hollywood studio and sports broadcast rights, and we have also
launched a number of new SD and HD channels. Our satellite platforms in nine
countries have continued to grow, as have our wholesale, virtual operator and
online pay-TV businesses. At the same time, we have delivered margins of 18% and
21% for our Nordic and Emerging Market pay-TV businesses, respectively. We are
investing in our channels and the Viaplay online pay-TV platform in both the
Nordic region and the emerging markets to drive further growth. We have
therefore slightly reduced our anticipated full year Nordic pay-TV margin from
approximately 18% to approximately 17% and, while we continue to anticipate
higher Emerging Market pay-TV profits in 2012 than 2011, the growth in profits
for the second half of the year is expected to be significantly lower than the
217% increase for the first half of 2012.

“We did lose short term TV advertising market share in Sweden and Norway in the
quarter, which was primarily due to the ratings impact of key sports events
being shown on competing channels. However, we also reported lower cost growth
to deliver a margin of 23% for our Scandinavian free-TV business, with higher
profits in both Sweden and Denmark. The outlook for the remainder of 2012 is for
continued TV advertising market growth in Sweden and Norway, with a less clear
picture for Denmark. Our objective is to take back and increase our Scandinavian
advertising market shares but this is more to do with execution than incremental
investment. We therefore anticipate that full year operating expenditure for the
Scandinavian free-TV business will grow at the normalised mid-single digit
percentage point level, rather than the previously anticipated mid to high
single digit percentage point level.”

“The position in the emerging markets is quite different as we have taken
further TV advertising market shares in the majority of our territories in the
second quarter, but we are yet to see a sustained return to growth in Central
and East European advertising spending, which continues to be adversely affected
by the macroeconomic environment. We have reduced overall costs and reported an
increased margin of 16% for the emerging markets free-TV business in the
quarter, which is the highest level for more than 3 years. We do not see the
need to invest further ahead of the return to growth for these markets, but we
are now integrating and restructuring the currently loss-making LNT operations
in Latvia so the reduction in costs will be lower in the second half of the year
than in the first half of 2012.

“Our financial position is as strong as ever, with low gearing and substantial
available liquid funds. Our strong cash flows have enabled us to reduce our net
debt by 55% or almost SEK 1 billion since Q2 last year, despite the payment of
the SEK 600 million increased annual dividend this quarter. We have now disposed
of the non-core betting operations, and acquired the complementary LNT free-TV
business in Latvia and emerging market Paprika Latino content production studio.
We are reviewing a number of other organic and M&A investment opportunities
across the Group, in order to both consolidate our existing market positions and
expand into new territories and complementary business areas moving
forward.”

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 5853 6965
UK:                +44(0)20 7784 1036
US:                +1646 254 3360

The access pin code for the call is 6075849.
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:

Hans-Holger Albrecht, President & Chief Executive Officer
Mathias Hermansson, Chief Financial Officer
Tel: +46 (0) 8 562 000 50

Matthew Hooper, Head of Corporate Communications & Planning
Tel:      +44 (0) 7768 440 414
Email:  investor.relations@mtg.se / press@mtg.se

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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 broadcasting 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 record net sales of SEK
13.5 billion in 2011. 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 quarterly and half year report is that which Modern
Times Group MTG AB is required to disclose under the Securities Market Act
and/or the Financial Instruments Trading Act. It was released for publication at
13.00 CET on 19 July 2012.