CTC Media, Inc. Investor Presentation. March 2015

Transcription

1 CTC Media, Inc. Investor Presentation March 2015

2 Contents Company Overview 2-8 A Leading Independent Broadcasting and Content Company in Russia Strategy Overview 9-10 Goal to Become a Leader in Content Creation, Management and Distribution Company s Market Position Growth Company Operating in a Dynamic Market Areas for Further Development Developing in Attractive CIS, International and Transmedia Markets Q4 & FY 2014 Financial & Operational Highlights Outperformance in 2014 on the Back of Challenging Market Environment Appendix

3 A Leading Independent Broadcasting and Content Company in Russia

4 From Private TV Network to Public Media Holding CTC Media was founded as Story First Communications Modern Times Group became a shareholder of CTC Media Initial Public Offering on NASDAQ Launch of CTCinternational in USA Launch of CTCinternational in Germany, North America and the Baltics Telcrest Investments Limited acquired a 25% stake in СTС Media from Alfa Group Launch of Domashniy.ru women s portal Development of inhouse creative production center Launch of Peretz International in Belarus Launch of mobile social network game based around TV show Molodezhka Acquisition of CarambaTV Launch of CTC Network Launch of Domashny Network Acquisition of DTV (rebranded to Peretz in 2011) Acquisition of Channel 31 in Kazakhstan and a TV company in Moldova Launch of CTCinternational in Israel Establishment of CTC Media s internal advertising sales house Everest Sales Launch of Videomore.ru online content portal Launch of CTCinternational in Kazakhstan, Kyrgyzstan, Armenia, Georgia, Azerbaijan, Thailand and uplink to HOT BIRD CTC and Domashny receive digital licenses Launch of CTC Love Channel on cable and satellite Launch of Sweet Me brand Launch of Russian TV series in the US on the HULU subscription service Launch of Second Screen App 3

5 We Fully Capture the Value Chain by Being an Integrated TV Broadcaster CTC target audience All BROADCASTING ( RUSSIA) Domashny target audience Females Peretz target audience All CTC Love target audience All FREE-TO-AIR (CIS) Kazakhstan Channel 31 AD SALES Free-to-air Internal TV ad maket advertising growthsales 1 house Everest CTC-INTERNATIONAL (PAY-TV) International version of CTC channel International version of PERETZ channel Ctc.ru, Domashniy.ru, Peretz.ru TRANSMEDIA Online video portal Videomore.ru Mobile, smart TV, second screen, transmedia projects 4

6 We Are the Largest Independent FTA-Broadcaster in Russia, with Premium Audiences Combined audience shares, % (all demographic) M 2014 Gazprom-Media СTС Media VGTRK (Rossiya) Channel One National Media Group UTV Russia Holding 5

7 We Operate in Attractive Markets Armenia, Georgia, Azerbaijan Russian-speaking population=10.4 mln Russia Population = million Belarus Russian-speaking population = 7 million Kazakhstan Russian-speaking population = 12.3 million North America Russian-speaking population = 3.5 million Germany Russian-speaking population = 6 million Moldova Population = 3.6 million Baltic states Russian-speaking population = 4 million Israel Russian-speaking population = 1.5 million Kyrgyzstan Russian-speaking population = 3.6 million Thailand Russian-speaking tourists = 1.3 million (2012) Since February 2012 CTC-International is available on the HOT BIRD 8 satellite (W/E Europe, North Africa, Middle East and Central Asia coverage) Sources: Video International, Russian Association of Communications Agencies, ZenithOptimedia, CIA World Factbook, Rosstat, Russkiy Mir Foundation 6

8 CTC Media Shareholder Structure CTC Media, Inc. Number of common shares outstanding (as of March 5, 2015) 155,762,166 39% 25% 36% Modern Times Group MTG AB Telcrest Investments Limited Free float Shareholder of CTC Media since 2002 Shareholder of CTC Media since 2011 IPO on NASDAQ in June 2006 Natasha Tsukanova Co-chairman Angelo Codignoni Co-Chairman Tamjid Basunia Director Board of Directors Kaj Gradevik Director Alexander Pentya Director Werner Klatten Director Irina Gofman Director Timur Weinstein Director Jean-Pierre Morel Director 7

9 Strong Management Team Yuliana Slashcheva Chief Executive Officer Joined CTC Media in years in high growth media related businesses Lilia Omasheva Chief of Operational Efficiency and Organizational Development Joined CTC Media in 2013 More than 10 years experience in advertising industry Stanislav Ploschenko Chief Financial Officer Joined CTC Media in 2014 More than 13 years experience in finance Julia Moskvitina Chief Commercial Officer Joined CTC Media in 1999 More than 15 years experience in advertising sales Sergey Petrov Chief Broadcasting Officer Joined CTC Media in years experience in TV industry Oleg Kuzmin Chief Strategic Communications Officer Joined CTC Media in years experience in communications and marketing Elmira Makhmutova Head of CTC Channel Joined CTC Media in 2008 More than 18 years experience in marketing and media business Lika Blank Head of Domashny Channel Joined CTC Media in 2014 More than 16 years experience in media business Ruben Oganesyan Head of Peretz Channel Joined CTC Media in 2014 More than 16 years experience in media business 8

10 Delivering on Strategic Priorities STRATEGIC GOAL: To become a leader in content creation, management and distribution on all potentially monetizable platforms Prioritize content and synergies Grow combined audience share Expand digital offerings Diversify revenue streams Centralized content purchases to secure synergies, longer content life span and sharing among platforms Centralized programming to avoid cannibalization Further steps towards more local content Launch of CTC Love to cover a complementary audience segment New Head of Domashny upgrades Channel s content and programming to attract younger audience New Heads of CTC and Peretz to strengthen channels market positions Channels' websites became full scale platforms Second screen App successfully launched in November 2014 Successful launch of a social network game based around TV show Molodezhka New approach to monetization through digital projects and partnerships Digital media revenue up almost 50% in RUB in 2014 and continues to grow Launch of the first e- commerce project by a TV company in Russia 9

11 Combination of Growth, Profitability and Dividend Yield GROWTH + + EFFICIENCY / PROFITABILITY RETURN CASH TO SHAREHOLDERS Operating in one of Europe s largest 1 TV ad markets ($4.1 bln in 2014) OIBDA margin of 29% in 2014 High Group power ratio of 1.75x due to attractive audience profiles Strong cash flow generation and net cash position Over 50% cash dividend payout in 2014 Aggregate cash dividends of $109 mln paid in 2014 Cash dividend of $ per share for the first quarter of The Board will consider further quarterly dividends in light of market conditions Source: (1) Zenith Optimedia and AKAR estimates. 10

12 Growth Company Operating in a Dynamic Market

13 Growing Audience Shares In All Most Commercially Attractive Demographic Q Audience shares 1, % Q Q TNT Channel One CTC NTV Russia 1 Channel 5 Ren TV TV-3 Pyatniza *** Disney * Russia 24 Russia 2 Peretz Domashny TV Centr 2X2 U ** Zvezda Russia K 2 Other (1) Source: TNS Russia, CTC Media s Research Department (2) Includes audience shares of regional and non-fta channels (*) Operated under Semerka brand before 31 December, 2011 (**) Operated under Muz-TV brand before 1 September, 2012 (***) Operated under MTV brand before 1 June,

14 Growing Audience Shares In All M 2014 Audience shares 1, % 12M M TNT Channel One CTC Russia 1 NTV Ren TV Channel 5 TV-3 Russia 24 Pyatniza *** Russia 2 Disney * Domashny Peretz TV Centr U ** 2X2 Zvezda Russia K 2 Other (1) Source: TNS Russia, CTC Media s Research Department (2) Includes audience shares of regional and non-fta channels (*) Operated under Semerka brand before 31 December, 2011 (**) Operated under Muz-TV brand before 1 September, 2012 (***) Operated under MTV brand before 1 June,

15 CTC Media Channels Viewership Position

16 Minutes per day Internet Is Growing But Not at the Expense of TV Viewing TV Usage (Minutes per day, All 16+) * TV Radio Internet Other Source: TNS Gallup Media, Russia * Change in TNS Measurement panel in 2012 increase proportion of 2+ Tv-sets per household 15

17 Fragmentation of Russian TV Market Presents Opportunity for Niche Channels to Grow Audience shares, all demographic 55% 2-nd Tier Channels audience share including Domashny, Peretz is growing intensively 50% Top 3 state-controlled channels 45% 40% 35% 1 st tier channels 30% 25% 2 nd tier channels 20% 15% Non-FTA and regional channels 10% Notes: top 3 state-controlled channels: Channel One, Rossiya 1, NTV; 1 st tier channels: CTC, TNT, Ren-TV; 2 nd tier channels: TV-3, Domashny, Peretz, Rossiya K, Channel 5, Rossiya 2, Euronews, Zvezda, Pyatniza, Rossiya 24, Ю, 2x2, TV Center, Disney, RU TV 16

18 Stable Consumer Goods Client Base with Large Multi-National and Local Advertisers Ad spending on CTC Media s Russian channels by category * 1 Food and beverages 26% 25% 2 Pharmaceuticals and vitamins 16% 19% 3 Cosmetics and personal care products 19% 18% 4 Other goods 14% 14% 5 Telecoms 7% 8% 6 Retail 4% 5% 7 Auto 4% 4% 8 Appliances 4% 3% 9 Detergents 4% 3% 10 Finance 2% 1% Vast majority of CTC Media s Russian advertisers are basic consumer goods focused Over 80% of CTC Media s advertisers budgets are coming from multinationals Notes: (*) National advertising sales for CTC, Domashny and Peretz Networks (**) Total Russian advertising sales for CTC, Domashny and Peretz Channels 17

19 Advertising Sales Structure Advertisers Advertising Agencies Internal Sales Houses External Sales Houses Everest Sales VGTRK Gazprom-Media / Alkasar Video International Consultancy services 18

20 Developing in Attractive CIS, International and Transmedia Markets

21 US$ mln Strong Market Positions in Kazakhstan Channel 31, Kazakhstan (all 6-54 demographics)* Kazakhstan revenue and OIBDA margin dynamics Power ratio up to 1.2x from 1.5x 14% 17% 18% 19% 30.4% 16.2% 31.0% 29.7% 11% 12% 17.4% 21.8% FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 Target audience share Market share Revenue OIBDA margin 20 Source: (*) TNS Central Asia

22 21 Transmedia: Significant Improvement in Financial Performance New customers share in total transmedia revenues in 2014, RUB mln 40.8 CTC Media Digital OIBDA 1 0 FY 2013 FY 2014 Partnerships (1.8) * * Total transmedia revenues Revenues from new clients (57.3) US $ mln RUB mln * - pending 2014 Highlights Key Projects Significant revenue growth exceeding the Company s own forecast OIBDA (including e-commerce revenues) reached breakeven level around 1 mln rubles (FY 2013: (57.3) mln rubles) Notable diversification of the customer base The new season of TV series Molodezhka (Youth League) - fully monetized through different digital platforms with total revenue of almost 26 mln rubles Original Second Screen App successfully launched with new series of the Youth League 10 special advertising projects on CTC Media s digital platforms successfully completed in 2014 Partnerships Odnoklassniki successfully launched in September 2014 GameInsight - successfully launched in December 2014 Yandex, Vkontakte under development; expected to be launched in H1 2015

23 Entering New Platforms to Be Wherever Our Viewers Are Average monthly users in Q4 2014: 10.7 mln WEB, 3.2 mln Mobile Total coverage in all digital platforms 13.9 mln unique monthly users 22

24 Market Outperformance on the Back of Challenging Market Environment

25 Q4 and 2014 FY Key Operational Highlights Group Total Revenue Russian TV Ad Market vs CTC Media s Russian channel television ad revenues YoY, Rubles* 2.3% 3.4% Group Market Share 17.1% 17.4% FY 2013 FY 2014 Q Q RUB Billion 2014 FY Key Operational Highlights Q Key Operational Highlights FY 2014 Russian TV Ad Market Total revenue up 3% in ruble terms despite audience share loss and sublicensing revenue slowdown due to the crisis in Ukraine Outperformed the market, which grew only 2.3% in 2014 Market share grew from 17.1% to 17.4% despite audience share loss Managed efficient cost control on the back of challenging market environment Adjusted OIBDA* margin in line with previously announced guidance 29% 100% of Group s inventory sold through the year Transmedia business reached OIBDA breakeven with total revenue of approximately 280 mln rubles, exceeding the Company s forecast Revenue was flat YoY with 8.5 bln Rubles Group s power ratio hit a record high of 1.86 CTC Media FY 2013 FY 2014 Market Share CarambaTV acquisition for further synergies between the Company s TV, digital and transmedia businesses (announced in January 2015) Management team significantly strengthened with new CFO, new head of strategic communications, new chief legal officer and new heads of CTC and Peretz channels Successful monetization of Molodezhka series through digital platforms, with overall revenue of almost 26 mln rubles for one season * Adjusted OIBDA is non-gaap financial measure that excludes impairment charges of million RUR arising from the impairment of goodwill related to the Company s production unit in the fourth quarter of 2013, and a 1,651.5 million RUR of charge in the fourth quarter 2014 related to the impairment of Peretz goodwill reflecting a more conservative outlook due to the prevailing economic uncertainty. Please see financial tables at the end of press release dated March 5, 2015, relating to the Company s financial results for the fourth quarter and full year ended December 31, 2014 for a reconciliation of operating income, OIBDA to adjusted OIBDA. 24

26 25 Audience Share Performance Q4'13 Q4'14 12M'13 12M'14 Q4'13 Q4'14 12M'13 12M'14 Q4'13 Q4'14 12M'13 12M'14 CTC Domashny CTC channel inventory was fully sold out in Q Launch of new premier series with audience shares higher than the channel s average for the season: Molodezhka (15.5%), Kitchen (15.2%), Uralskie Pelmeni (15.2%) #3 most watched FTA channel for the target audience (all 10-45) Set of new premieres and series scheduled for Q2 and Q Successful restyle with a new logo and updated visual format both launched in October Premier series of Real Vanga and Life after Vanga with audience share of 4.1% and 3.5% respectively in line with the Company s expectations Younger audience share growth YoY with share growth from 91% to 93% Peretz Ruben Oganesyan joins as Head of Peretz in Q CTC Love CTC Love has been part of the TNS ratings database since September 2014 and is now able to report its first quarterly ratings metrics In Q CTC Love reached 0.65% of its All target audience

27 The Company Responded Proactively to Key Market Challenges CTC Media s Digital Revenue % Channel 31 Audience Share 15.3% 13.9% 13.2% CTC Media Employees FY 2013 FY 2014 Q4'13 Q4'14 12M'13 12M'14 FY 2013 FY 2014 US $ mln RUB mln Audience share All 6-54 dempgraphic, % Number of Employees at year end Sublicensing revenues slowdown New legislation in Kazakhstan and national currency devaluation TV Ad Market Deterioration in Q Revenue diversification through Internet and digital projects E-commerce project (Sweet Me) revenue grew more than 9 mln rubles in 2014 Transmedia department performance significantly improved on OIBDA level Successful changes in the programming grid in prime time slots Target audience share grew from 13.2% to 13.9% YoY Adopted flexible and balanced approach to bilingual broadcasting (new legislation requires at least 50% broadcasting in Kazakh in each 6-hour timeslot) Undertook cost cutting initiatives, including optimization the number of employees Programming expenses to decline in 2015 due to more efficient content purchases and potential Russian content share growth Strengthened management team 26

28 Update on Response to Amendments to the Mass Media Law Challenge The Russian president signed an amendment to the Russian Mass Media Law in October 2014 The amendments restrict foreign ownership and control of Russian media companies to no more than 20% starting in January 2016 CTC Media s current corporate and shareholder structure will not be compliant Company s Response and Actions The Board of CTC Media established an advisory committee of non-executive directors The CTC Media executive team is working closely with the State Duma, the Government of Russia and other industry participants The international law firm Morgan, Lewis & Bockius LLP and the Russian law firm Egorov Puginsky Afanasiev & Partners have been engaged as legal advisers The American consultancy firm Habif, Arogeti & Wynne has been engaged as tax advisers CTC Media appointed international bank UBS as its financial advisor and professional services company KPMG LLP as its tax advisor The Company s Board of Directors, through its Advisory Committee, is working to identify, evaluate and implement an appropriate response for compliance while safeguarding the interest of all of the Company s stockholders The Board is considering alternatives that include corporate restructuring, franchising and licensing structures, capital reorganization and divestments. We have begun to evaluate a potential sale of all or a substantial portion of our Russian business or of the shares of common stock of CTC Media Target Complying with the law and protecting the interests of our stockholders 27

29 Total Revenue Composition FY 2013 vs FY 2014 mrub % +6.5% -6.3% +10.1% 48.9% -45.9% FY 2013 Transmedia Other FY 2014 mrub Q vs Q % +3.3% -13.8% +52.6% 42.4% % Q'13 Transmedia Other 4Q'14 Group Revenue Diversification across segments helped to withstand weakening market and keep revenue flat in Q4 Full year revenue up 3% with almost all segments contributing except Peretz 28

30 OIBDA Composition mrub FY 2013 vs FY ,5% -10,4% -30,5% +4,6% -85.3% -24.5% FY 2013 Transmedia Other FY 2014 mrub 4Q 2013 vs 4Q ,1% -82,5% -70,8% +41,6% 516.1% % Q'13 Transmedia Other 4Q'14 Group OIBDA Q4 numbers down on flat revenue and more expensive programming, aimed at protecting the audience share, driving the FY Adjusted OIBDA* down by 10% Source diversification across channels and growth of Kazakh and digital businesses helped to smooth down the negative Adjusted OIBDA* dynamics * Adjusted OIBDA is non-gaap financial measure that excludes impairment charges of million RUR arising from the impairment of goodwill related to the Company s production unit in the fourth quarter of 2013, and a 1,651.5 million RUR of charge in the fourth quarter 2014 related to the impairment of Peretz goodwill reflecting a more conservative outlook due to the prevailing economic uncertainty. Please see financial tables at the end of press release dated March 5, 2015, relating to the Company s financial results for the fourth quarter and full year ended December 31, 2014 for a reconciliation of operating income, OIBDA to adjusted OIBDA. 29

31 Cash Flow And Financial Position Group Dividends Group Free Cash Flow and Net Cash Position, US $ mln Cash & Deposits **, US $ mln FY 2013 FY Group Cash Currency Breakdown, at 2014 year end 22% 1% 0.63 FY 2013 FY % US $ mln $ per share Free Cash Flow * Net Cash Position Net cash and deposits at the Begining of the Period Operating activities Investing activities Financing activities Effect of exchange rate changes on cash Net cash and deposits at the End of the Period USD RUB Other Cash Flow Aggregate cash dividends of $109 mln paid in FY free cash flow of $100 mln 2014 operating cash flow down 44% to $105 mln, which together with investments in PPE, business acquisitions and dividends led to a reduction in Net Cash to $139 mln Most of cash balances exchanged into dollars to secure the value of cash during 2014 The FX position of the company is $ 57 mn long as of Adjusted net income attributable to CTC Media, Inc. stockholders down 8% to Rub 5,368 mln Cash dividend of $0.175 per share for the first quarter of The Board will consider further quarterly dividends in light of market conditions * Free cash flow = cash flow from operating activities - acquisitions of property and equipment and intangible assets ** Cash and deposits represent the amount of cash, cash equivalents and short-term deposits. 30

32 Operating Expenses as % of total operating expenses as % of total operating revenues Depreciation & amortization Stock-based compensation 5% 0% 7% 28% 5% 9% 30% 4% 4% 0% 6% 6% Direct operating expenses 21% 22% SG&A expenses 54% 57% 41% 42% Programming expenses 0% FY 2013 FY 2014 FY 2013 FY 2014 $624.4 mln $530.9 mln $711.4 mln $832.1 mln 0% 31

33 Appendix

34 Audience Shares In All 4+ Demographic Audience shares 1, % Q Q Channel One Russia 1 NTV TNT CTC Channel 5 Ren TV TV Centr TV-3 Zvezda Domashny Russia 24 Russia 2 Disney * Peretz Russia K Pyatniza *** U ** 2X2 Other 2 (1) Source: TNS Russia, CTC Media s Research Department (2) Includes audience shares of regional and non-fta channels (*) Operated under Semerka brand before 31 December, 2011 (**) Operated under Muz-TV brand before 1 September, 2012 (***) Operated under MTV brand before 1 June,

35 Audience Shares In All 4+ Demographic Audience shares 1, % 12M M Channel One 2 Rossiya 1 NTV TNT CTC Channel 5 Ren-TV TV Center Rossiya 24 TV-3 Domashny Zvezda Rossiya 2 Peretz Disney* Rossiya K Pyatnica*** U** 2x2 Other (1) Source: TNS Russia, CTC Media s Research Department (2) Includes audience shares of regional and non-fta channels (*) Operated under Semerka brand before 31 December, 2011 (**) Operated under Muz-TV brand before 1 September, 2012 (***) Operated under MTV brand before 1 June,

36 Consistent Growth in Technical Penetration Technical Penetration 1, % 87% 88% 91% 94% 95% 95% 95% 96% 65% 71% 76% 82% 85% 89% 90% 91% 54% 61% 68% 73% 80% 84% 85% 88% Note: (1) Technical penetration means the percentage of the population that has the technical ability to receive a particular broadcast signal. Measured annually by TNS Gallup Media in cities with populations of more than 100,000 35

37 36 Summary Income Statement (US$ million, RUB million except per share data) Q USD Q USD FY 2013 USD FY 2014 USD FY 2013 RUB FY 2014 RUB Total operating revenues $259.7 $182.2 $832.1 $ , ,250.0 Advertising revenues $250.0 $176.0 $806.5 $ , ,729.7 Total operating expenses (187.8) (162.2) (624.4) (560.3) (19,886.7) (22,087.6) Total operating expenses before impairment loss (157.9) (132.8) (594.5) (531.0) (18,909.1) (20,436.1) Adjusted OIBDA* , ,792.4 Adjusted OIBDA margin* 42.3% 29.9% 32.5% 29.0% 32.6% 28.6% Adjusted net income attributable to CTC Media, Inc. stockholders** , ,367.6 Adjusted diluted earnings per share** $1.16 $0.88 * Adjusted OIBDA is non-gaap financial measure that excludes impairment charges of million RUR arising from the impairment of goodwill related to the Company s production unit in the fourth quarter of 2013, and a 1,651.5 million RUR of charge in the fourth quarter 2014 related to the impairment of Peretz goodwill reflecting a more conservative outlook due to the prevailing economic uncertainty. Please see financial tables at the end of press release dated March 5, 2015, relating to the Company s financial results for the fourth quarter and full year ended December 31, 2014 for a reconciliation of operating income, OIBDA to adjusted OIBDA. * * All adjusted numbers are non-gaap financial measures reported before impairment losses of and 1,651.5 RUR mln for Q4 and 12M of 2013 and 2014, respectively.. Please see 8-K Form Press release filed on March 5, 2015 for a reconciliation of adjusted OIBDA to OIBDA

38 Summary Balance Sheet (US$ mln) AS OF DECEMBER 31, 2013 USD AS OF DECEMBER 31, 2014 USD Cash and cash equivalents Short-term investments Total assets including goodwill including broadcasting licenses including programming rights Working capital * Stockholders equity Net cash position ** * Working capital = current assets - current liabilities ** Net cash position = cash and cash equivalents + short-term investments - total debt 37

39 Summary Cash Flow Statement (US$ mln) FY 2013 USD FY 2014 USD Cash at beginning of period Net cash provided by operating activities including acquisition of programming and sublicensing rights (378.0) (364.4) Net cash used in investing activities (63.4) 33.2 including CapEx (6.3) (5.8) including receipts from/(investments in) deposits (56.6) 41.8 Net cash used in financing activities (143.9) (115.4) Cash at end of period CapEx (6.3) (5.8) CapEx as % of total revenue 0.8% 0.8% Free cash flow * * Free cash flow = cash flow from operating activities - acquisitions of property and equipment and intangible assets 38

40 Contact Information and Disclaimer For further information please visit or contact: Tel: +7 (495) DISCLAIMER The information contained in this presentation, including market data that are attributed to specific sources and have not been independently verified. No representation, warranty or undertaking, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or the opinions contained herein. None of the Company or any of its affiliates, advisors or representatives shall have any liability whatsoever (in negligence or otherwise) for any loss howsoever arising from any use of this presentation or its contents or otherwise arising in connection with the presentation. The presentation is not an offer of securities. This presentation is not a public offer or advertisement of securities in the Russian Federation, and is not an offer, or an invitation to make offers, to purchase any securities in the Russian Federation. Certain statements in this presentation that are not based on historical information are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of Such forward-looking statements include, among others, Russian advertising market growth, roll-out of digital broadcasting in Russia and modifications thereto, ability of Russian TV ad market to maintain its capacity, TV ad spend in Russia, guidance for FY2014 and etc. These statements reflect the Company's current expectations concerning future results and events. These forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of CTC Media to be materially different from any future results, performance or achievements expressed or implied by such forwardlooking statements. The potential risks and uncertainties that could cause actual future results to differ from those expressed by forward-looking statements include, among others, changes in the size of the Russian television advertising market; the roll-out of digital broadcasting in Russia; depreciation of the value of the Russian ruble compared to the US dollar; geopolitical events involving Russia and the other countries in which the Company operates, including any potential negative economic impact of such events; the Company s ability to deliver audience share, particularly in primetime, to its advertisers; free-to-air television remaining a significant advertising forum in Russia; and restrictions on foreign involvement in the Russian television business. These and other risks are described in the "Risk Factors" section of CTC Media's annual report on Form 10-K filed with the SEC on March 6, Other unknown or unpredictable factors could have material adverse effects on CTC Media's future results, performance or achievements. In light of these risks, uncertainties, assumptions and factors, the forward-looking events discussed herein may not occur. You are cautioned not to place undue reliance on these forward-looking statements. CTC Media does not undertake any obligation to publicly update or revise any forward-looking statements because of new information, future events or otherwise. 39