Q2 2016 Highlights

  · Sales of SEK 4,328m (4,155) and operating income of SEK 472m (452)
  · Net income from continuing operations of SEK 328m (360) and basic earnings
per share of SEK 4.33 (4.98)
  · Total net income of SEK -674m (-58) and total basic earnings per share of
SEK -10.70 (-1.30), including net income from discontinued operations of SEK
-1,002m (-418)
  · Cash flow from continuing operations of SEK 310m (373)
  · Net debt of SEK 1,796m (913) equivalent to 1.2x trailing 12 month EBITDA
excl. IAC

Financial Overview

+-------------------------+------+-----+----------+----------+--------------+
|(SEKm)                   |Q2    |Q2   |First half|First half|Full year 2015|
|                         |2016  |2015 |year 2016 |year 2015 |              |
+-------------------------+------+-----+----------+----------+--------------+
|Continuing operations    |      |     |          |          |              |
+-------------------------+------+-----+----------+----------+--------------+
|Net sales                |4,328 |4,155|8,154     |7,855     |16,218        |
+-------------------------+------+-----+----------+----------+--------------+
|Change in reported net   |4.2%  |1.1% |3.8%      |1.9%      |3.0%          |
|sales                    |      |     |          |          |              |
+-------------------------+------+-----+----------+----------+--------------+
|   Organic growth        |2.1%  |-0.2%|2.7%      |0.3%      |0.7%          |
+-------------------------+------+-----+----------+----------+--------------+
|                         |3.5%  |0.4% |2.7%      |0.3%      |1.9%          |
|Acquisitions/divestments |      |     |          |          |              |
+-------------------------+------+-----+----------+----------+--------------+
|   Changes in FX rates   |-1.5% |0.9% |-1.6%     |1.3%      |0.4%          |
+-------------------------+------+-----+----------+----------+--------------+
|                         |      |     |          |          |              |
+-------------------------+------+-----+----------+----------+--------------+
|Operating income before  |472   |452  |632       |594       |1,268         |
|items affecting          |      |     |          |          |              |
|comparability            |      |     |          |          |              |
+-------------------------+------+-----+----------+----------+--------------+
|Margin before items      |10.9% |10.9%|7.7%      |7.6%      |7.8%          |
|affecting comparability  |      |     |          |          |              |
+-------------------------+------+-----+----------+----------+--------------+
|Items affecting          |-     |-    |-         |77        |-512          |
|comparability (IAC)      |      |     |          |          |              |
+-------------------------+------+-----+----------+----------+--------------+
|Operating income         |472   |452  |632       |672       |756           |
+-------------------------+------+-----+----------+----------+--------------+
|                         |      |     |          |          |              |
+-------------------------+------+-----+----------+----------+--------------+
|Net income               |328   |360  |448       |524       |533           |
+-------------------------+------+-----+----------+----------+--------------+
|Basic earnings per share |4.33  |4.98 |5.92      |7.59      |7.45          |
|(SEK)                    |      |     |          |          |              |
+-------------------------+------+-----+----------+----------+--------------+
|Cash flow from operations|310   |373  |385       |484       |1,051         |
+-------------------------+------+-----+----------+----------+--------------+
|                         |      |     |          |          |              |
+-------------------------+------+-----+----------+----------+--------------+
|Discontinued operations  |      |     |          |          |              |
+-------------------------+------+-----+----------+----------+--------------+
|Net income [1]           |-1,002|-418 |-1,072    |-264      |-282          |
|                         |      |     |          |          |              |
+-------------------------+------+-----+----------+----------+--------------+
|                         |      |     |          |          |              |
+-------------------------+------+-----+----------+----------+--------------+
|Total operations         |      |     |          |          |              |
+-------------------------+------+-----+----------+----------+--------------+
|Net income               |-674  |-58  |-624      |260       |251           |
+-------------------------+------+-----+----------+----------+--------------+
|Basic earnings per share |-10.70|-1.30|-10.16    |3.63      |3.22          |
|(SEK)                    |      |     |          |          |              |
+-------------------------+------+-----+----------+----------+--------------+
|Net debt                 |1,796 |913  |1,796     |913       |2,124         |
+-------------------------+------+-----+----------+----------+--------------+

[1] Comprises MTG’s interest in CTC Media, Inc, which has been divested and gave
rise to a non-cash charge due to the reclassification of accumulated currency
translation differences.

Alternative Performance Measures
With effect from the quarter, MTG has introduced the new European reporting
guidelines concerning Alternative Performance Measures. The purpose of APMs is
to facilitate the analysis of business performance and industry trends that
cannot be directly derived from financial statements. MTG is using the following
APMs: Operating income & margin before IAC; Change in net sales from Organic
growth, Acquisitions/divestments and Changes in FX rates; Net debt and Net
debt/EBITDA; Capital employed and Return on Capital Employed (ROCE); and Return
on Equity (ROE). The reconciliation of these APMs to lines in the financial
statements, with accompanying explanations, is provided in tables on pages 22-25
of this report.

President & CEO’s comments

On track
Our products are now more broadly available than ever before and showed further
good traction in Q2 with profitable growth for our Nordic and International
entertainment businesses, as well as for the whole Group. MTG Studios also
delivered a significant profit improvement. Video consumption continues to grow
and move more online, on mobile and on demand, and our group-wide digital sales
increased by 2.5 times. We are now not only the leading digital entertainment
player in most of our markets, but also a global leader in key digital
categories such as esports and MCNs.

Both our Nordic and International entertainment operations delivered organic
sales growth, with Bulgaria again top performing with over 20% total growth and
more than 60% digital growth. Furthermore, the increase in group profits
reflected the cost saving initiatives that we have implemented, and was achieved
despite the ongoing FX headwinds and content cost inflation. The performance of
our traditional businesses enables us to invest into the growth of our digital
products and services that are proving so popular with consumers.

We have adjusted prices as we have added even more content to our Viasat and
Viaplay offerings, and Viaplay delivered another high growth sales quarter. We
are commissioning more and more original productions for Viaplay; we are about
to launch the Viafree digital platform across Scandinavia and provide free
streamed video content; we will show exclusive coverage of the Rio Olympics in
Sweden next month on all our platforms, as well as in VR and Ultra-HD for the
first time; we are launching new premium sports channels in Sweden on the back
of the new sports rights we have acquired; and we have launched the world’s
first 24/7 dedicated eSports TV channel that we will make as widely available as
possible to the world’s 250 million esports fans and more than 2 billion gamers.
The multi-year partnerships deals that we have signed with leading distributors
like Telenor in the Nordic region demonstrate the relevance and value of our
products to consumers, and the importance of the investments that we are making
in the long term development of our offerings.

We completed the sale of our shareholding in CTC Media in Q2 and have now
withdrawn entirely from traditional broadcasting in the CIS region. As part of
our ongoing portfolio optimisation, we have also signed an agreement to sell our
free-TV and production businesses in Ghana and Tanzania, subject to local
regulatory approvals. We are instead focusing on investing further in the
expansion of our digital video businesses, while having also paid our highest
ever cash dividend in the quarter.

Outlook
Our objective remains to accelerate our sales growth and increase our operating
profits for the full year. Q3 sales are expected to be up again compared to the
same period of last year, but profits will be down as we see the impact of the
new and renewed sports rights in the Nordics in particular, as well as the
ongoing adverse FX effects.

Jørgen Madsen Lindemann
President & Chief Executive Officer

“We are executing on our strategy to deliver profitable growth and shareholder
returns by transforming MTG into a leading digital entertainment provider.
People are watching more and more video, and our products are more relevant,
more available   and more innovative than ever before.”

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 5033 6538
UK:          +44 (0) 20 3427 1905
US:          +1 646 254 3367

The access pin code for the call is 264200. To listen to the conference call
online and for further information, please visit www.mtg.com.


This information is information that MTG (Modern Times Group MTG AB (publ.)) is
obliged to make public pursuant to the EU Market Abuse Regulation and/or the
Securities Markets Act or the Financial Instruments Trading Act. The information
was submitted for publication at 07:30 CET on 19 July 2016. Our shares are
listed on Nasdaq OMX Stockholm (‘MTGA’ and ‘MTGB’).

Any questions?
mtg.com
facebook.com/MTGAB
@mtgab
press@mtg.com (or Tobias Gyhlenius +46 73 699 27 09)
investors@mtg.com (or Stefan Lycke +46 73 699 27 14)


Modern Times Group MTG AB
Skeppsbron 18
P.O. Box 2094
SE-103 13 Stockholm, Sweden
Registration number: 556309-9158