Q3 2013 Interim report January – September

Investment plan on track with healthy sales growth
Q3 2013 Highlights

  · Net sales up 9% y-o-y (year-on-year) at constant FX & up 5% on an organic
basis
  · Free-TV Scandinavia sales growing again at constant FX with rising
investments
  · Pay-TV Nordic sales up 7% y-o-y at constant FX with an operating margin of
11.9%
  · Free-TV Emerging Markets sales up 21% at constant FX with ongoing
investments
  · Continued growth in Pay-TV Emerging markets and profitability in line with
expectations
  · Acquisition of Nice Entertainment Group – Nordic´s largest independent group
of production companies – expected to close this month
  · Operating income (EBIT) of SEK 162m (288), excl. associated company income
of SEK 127m (134)
  · Net income of SEK 196m (308) and a basic earnings per share of SEK 3.00
(4.65)
  · Cash flow from operations of SEK 210m (237) and net debt position of SEK
373m (634)

Financial Overview

+------------------+-----+------------+------------+------------+------------+
|(SEKm)            | 2013|2012 Jul-Sep|2013 Jan-Sep|2012 Jan-Sep|2012 Jan-Dec|
|                  |  Jul|            |            |            |            |
|                  | -Sep|            |            |            |            |
+------------------+-----+------------+------------+------------+------------+
|Net sales         |3,204|       2,940|      10,047|       9,716|      13,336|
+------------------+-----+------------+------------+------------+------------+
|Growth at constant|   9%|         -1%|          5%|          0%|          1%|
|FX                |     |            |            |            |            |
+------------------+-----+------------+------------+------------+------------+
|Organic growth at |   5%|          2%|          4%|          2%|          2%|
|constant FX       |     |            |            |            |            |
+------------------+-----+------------+------------+------------+------------+
|EBIT before       |  162|         288|         845|       1,181|       1,695|
|associated company|     |            |            |            |            |
|income            |     |            |            |            |            |
+------------------+-----+------------+------------+------------+------------+
|Margin before     | 5.0%|        9.8%|        8.4%|       12.2%|       12.7%|
|associated company|     |            |            |            |            |
|income            |     |            |            |            |            |
+------------------+-----+------------+------------+------------+------------+
|Associated company|  127|         134|         476|         467|         429|
|income *          |     |            |            |            |            |
+------------------+-----+------------+------------+------------+------------+
|Total EBIT        |  289|         422|       1,321|       1,648|       2,124|
+------------------+-----+------------+------------+------------+------------+
|Total EBIT margin | 9.0%|       14.4%|       13.1%|       17.0%|       15.9%|
+------------------+-----+------------+------------+------------+------------+
|Net Income        |  196|         308|         907|       1,216|       1,594|
+------------------+-----+------------+------------+------------+------------+
|Basic Earnings per| 3.00|        4.65|       12.72|       17.68|       22.93|
|Share (SEK)       |     |            |            |            |            |
+------------------+-----+------------+------------+------------+------------+
|Cash flow from    |  210|         237|         948|       1,072|       1,655|
|operations        |     |            |            |            |            |
+------------------+-----+------------+------------+------------+------------+

* Including MTG’s USD 20.5m Q4 2012 participation in USD 82.5m of non-recurring
charges incurred by associated company CTC Media (‘CTC Media’) in Q3 2012, and
USD 4.6m Q1 2012 participation in USD 89.5m of non-recurring charges incurred by
CTC Media in Q4 2011.

Forward Expectations
The Group expects its Nordic pay-TV business revenues to grow at constant
exchange rates in 2013, and to report an EBIT margin of between 11 and 12% for
the full year 2013, and a higher margin in 2014. MTG’s exclusive coverage in
Sweden of the February 2014 Sochi Winter Olympics will boost sales and adversely
impact Q1 2014 profits for both the Nordic pay-TV and Scandinavian free-TV
businesses.

The Group expects its Emerging Markets pay-TV business to achieve a better than
breakeven full year 2013 EBIT result, with rising profitability levels in 2014.

President and CEO’s comments

Sales growth across the board
The third quarter is the seasonally smallest advertising sales period but our
sales growth has now improved for the fourth consecutive quarter. All five of
our business segments reported local currency sales growth on a quarterly basis
for the first time since Q1 2011.

Our Scandinavian free-TV operations are growing on a combined basis again and
the Fall schedules have established further positive traction. Our free-TV media
houses have continued to take advertising market share in almost all of our
emerging market territories, but will now begin to face significantly tougher
comps in markets that remain soft. Viaplay is rapidly growing its subscriber
base in the Nordic region and our satellite business is generating higher ARPU
levels, while our emerging market mini-pay HD channels are now even more broadly
available. The pay-TV markets are becoming more and more competitive, but we
have strong consumer offerings and have early mover advantage in the online
space. Our MTG Studios content production and distribution business is also
expanding quickly, and MTGx is providing the digital acceleration platform for
the group.

Investing in momentum
The performance so far in 2013 clearly demonstrates that our investments in our
three key areas – content, digital and geographical expansion - are having the
desired effect and ensuring that our customer offerings are stronger than ever.
As an entertainment group committed to shaping the future of entertainment, our
primary objective is to create local, relevant and digital experiences that
engage and excite consumers. We are therefore constantly adding new products
such as new channels, more relevant content and innovative digital services, all
of which we are making available on as many distribution platforms as possible.
The upcoming launch of new free-TV channels in Norway and Tanzania, and the
preparations we are now making for our exclusive coverage of the Sochi Winter
Olympics in Sweden and the Baltics are clear evidence of this drive. We are also
waiting to complete the acquisition of the Nordic´s region’s largest independent
group of production companies - Nice Entertainment. This is a significant
milestone for us and follows hot on the heels of the acquisitions of DRG and
Novemberfilm. This is a key strategic focus area for us as we build MTG Studios
into a scale industry player and story teller.

We will continue to invest in this momentum, and MTGx will provide the
acceleration to ensure that our value for money products and services are
available as simply and widely as possible. These investments do impact short
-term profitability but are the building blocks of our future growth and cash
generation.

Cash generative & asset light
We continue to convert a high proportion of our earnings into cash flow due to
our ever present focus on operational excellence and financial efficiency. We
ended the quarter with a net debt to trailing twelve month EBITDA ratio of just
0.2 times, so we have the flexibility and firepower to continue to invest
organically and through M&A in the future growth of the business while, at the
same time, yielding healthy shareholder returns.

Jørgen Madsen Lindemann
President and Chief Executive Officer

“All five of our business segments are growing and we are continuing to invest
as planned to ensure that this growth continues, and that our customer offerings
are stronger than ever!”


* * *

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 5033 6538
UK:                         +44(0)20 3427 1910
US:                         +1646 254 3361

The access pin code for the call is 2199968. 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, 22 October 2013

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 13.3
billion in 2012. 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 Full 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 22
October 2013.