Acquisition q of the DTV group. Acquisition of Channel 31 in Kazakhstan. CTC Media enters Moldova free-to-air TV market

Transcription

1 di IInc. CTC M Media, Investor Presentation June 2012

2 From Private TV Network to Public Media Holding CTC Media was founded as StoryFirst Communications Launch of CTC Network Launch of Domashny Network Launch of CTCinternational in Israel Acquisition q of the DTV group Acquisition of Channel 31 in Kazakhstan CTC Media enters Moldova free-to-air TV market Acquisition of Costafilm and Soho Media production companies Establishment of CTC Media s internal advertising sales house Everest Sales Launch of Videomore online social television network Launch of CTCinternational in Kazakhstan, Kyrgyzstan, Armenia, Georgia Uplink of СTCinternational to the HOT BIRD satellite (Europe, Middle East, North Africa and Central Asia) Launch of CTCinternational in Germany and the Baltics TV broadcasting in Russia began Modern Times Group became a shareholder of CTC Media Initial Public Offering on NASDAQ Launch of CTCinternational in USA Telcrest Investments Limited acquired a 25% stake in СTС Media from Alfa Group Costafilm and Soho Media united into Story First Production DTV is rebranded to Peretz 1

3 We Fully Capture the Value Chain by Being a Vertically Integrated TV Broadcaster FREE-TO-AIR ( RUSSIA) CTC target audience All 6-54 Domashny target audience Females Peretz* target audience All FREE-TO-AIR ( CIS) Kazakhstan Moldova Channel 31 СTС/TV Dixi channel CONTENT PRODUCTION Story First Production AD-SALES Internal advertising sales house Everest CTC-INTERNATIONAL (PAY-TV) International version of CTC channel NEW MEDIA Various digital projects Social TV Network Videomore.ru Women s portal Domashniy.ru Note: (*) DTV Network operates under Peretz brand name & logo starting from October

4 We Operate in Attractive Markets Baltic States Russian-speaking population = 4 million Germany Russian-speaking population = 6 million Russia Population = 142 million 2011 TV Ad Market = US$ 4.4 billion* Kazakhstan Population = 16.3 million 2011 TV Ad Market = US$ 120 million* Russian-speaking speaking population = 12.3 million Moldova Population = 3.6 million 2011 TV Ad Market = US$ 16.6 million* Kyrgyzstan Russian-speaking population = 2.5 million Israel Russian-speaking population = 1.5 million USA Russian-speaking population = 3.5 million Since February 2012 CTC-International is available on the HOT BIRD TM 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 Note: (*) All TV Ad Markets figures are net of VAT 3

5 We Are the Largest Independent Broadcaster in Russia Combined audience shares, % (all 6-54 demographic) Q Q Gazprom-Media СTС Media VGTRK (Rossiya) Channel One National Media Group Prof-Media UTV Russia Holding Source: TNS Gallup Media 4

6 Russian Ad Market Has Significant Potential for Further Development Russian TV ad market was #9 in the world and #5 in Europe in Free-to-air TV ad market growth $ bln $ bln US US 1.4 USA Japan China Brazil Italy Germany France Russia and is expected to become # 5 in the world and #1 in Europe in TV Ad Market Total Ad Market Total Russian ad market forecast US $ bln RU UB bln USA Japan China Brazil Russia Germany Italy France Note: All TV Ad Markets figures are net of VAT Sources: (1) Zenith Optimedia, Company s estimates (2) Video International F 2020F 5

7 Due to Relatively Low Ad Spend as % of GDP and Underleveraged Consumer Ad spend as % of GDP¹ Retail and mortgage loans as % of GDP % % % 30% 14% 21% 9% 21% 5% 15% 19% 15% 13% 12% 12% 7% 14% 9% 6% 3% Slov venia lgaria Bul Au ustria USA lgium Bel UK Germ many CEE Ave erage ussia R Uk kraine Po oland Es stonia Latvia Po oland Czech Rep Lith uania Household loans excl mortgages, % of GDP Hun ngary Bu lgaria Rom mania Russia Mortgage loans, % of GDP Sources: (1) ZenithOptimedia, Company s estimates (2) Eurostat, National Central Banks,

8 TV Is the Most Attractive Advertising Medium in Russia TV is the only medium with truly national reach Important social and cultural platform More free-to-air networks than in other countries High quality free-to-air content offering H Cost per Thousand in Russia (US$)² TV 2.1 Radio 3.0 Internet % 50% 49% Ad spend in Russia by media segment 1 (%) Newspapers Magazines H TV Cost per Thousand (US$)² % Russia % 18% 16% 15% 14% 13% 11% 6% 4% 4% 04% 2% 3% 1% 0.4% Asia Western Europe Eastern Europe TV Internet Press Outdoor Radio Other F North America 17.0 Sources: (1) Russian Association of Communication Agencies, Video International (2) Initiative Media 7

9 Internet Consumption Is Growing 2011: Russia is #1 in Europe by number of Internet users Increase of time spend online (hours per day) Russia Germany France UK Italy Internet users, mln 2011: Internet Ad market growth in Russia (USD, mln) China Russia Brazil India USA Japan F Broadband penetration by country, 2010 (Russia 2011, 2020F) 1,419 96% 79% 70% 70% 69% % 46% 40% 37% South Korea Canada USA UK Russia 2020F Hungary Czech Rep Turkey Russia 2011 Sources: ComScore, Boston Consulting Group, Zenith Optimedia, AKAR, Mindshare Interaction 8

10 but Not at the Expense of TV Usage Average linear TV viewership globally is increasing Minutes per day Europe Russia 248 Minutes per day inutes per day Mi Q Q Source: Eurodata TV Worldwide 9

11 We Continue to Deliver Strong Top and Bottom-line Growth % 38% 41% % 38% % % 32% 45% 35% % 26% 27% 25% US $ bln US $ bln 50 22% 21% 16% 21% 20% ** ** ** 15% (Comparable-basis) total operating revenues*** OIBDA* OIBDA margin*, % Peers average OIBDA margin****,% Notes: (*) OIBDA is defined as operating income before depreciation and amortization (exclusive of amortization of programming and sublicensing rights. OIBDA margin is defined as OIBDA divided by total operating revenues. Both OIBDA and OIBDA margin are non-gaap financial measures (see reconciliations on page 38) (**) 2008 OIBDA and OIBDA margin are adjusted to exclude a $232.7 million charge arising from the impairment of the intangible assets of DTV Group in Russia, Channel 31 in Kazakhstan and a broadcasting group in Moldova; 2009 OIBDA and OIBDA margin are adjusted to exclude an $18.7 million charge arising from the impairment of the broadcasting licenses in Russia and a $28.6 million stock-based compensation expense recognized in conjunction with the previously announced settlement, DTV brand name by CTC Media of litigation brought by it against its former CEO, 2011 OIBDA and OIBDA margin are adjusted to exclude a $106.4 million charge arising from the impairment of several regional broadcasting licenses and the Peretz Network goodwill; (see reconciliations on page 36-37) (***) Comparable-basis operating revenues are non-gaap financial measures provided in order to facilitate period-to-period comparisons of CTC Media s results following the implementation of the new model of advertising sales starting from 2011 (see reconciliations on page 38) (****) Following companies are included in European peers average OIBDA margin calculations: CME, TVN, S.A. Modern Times Group, Antena3, ITV plc, Metropole Television, Mediaset, ProSiebenSat, Mediaset Espana, TF1 10

12 and to Diversify Our Lines of Business 2004 Q % 13% 9% Sublicensing 5% CIS 2% Russian FTA Broadcasting 100% Russian FTA Broadcasting 92% New Media 0.2% CTC- International 04% 0.4% 11

13 We Have Clear Strategic Priorities Content Broadcasting New Media Build library Develop in-house production Invest in ideas development Increase production volumes Create strong brands Stabilize audience share Improve audience profile Grow audience and market shares Distribution platforms: Enhance existing platforms female portal comedy portal Develop distribution Grow audience and market collaboration (VK, Youtube) Up to 20% shares Be available on all screens Expand to markets with of CTC Media channels Diversification: programming grid Russian-speaking ivas on existing platforms (from ~10% in 2011) audiences Games Transmedia branded entertainment content Content is king. Distribution platform is queen 12

14 We Focus on Developing and Creating Local Content Long-term Long term relationships with large independent producers Amedia Discover new third party partners In-house production Karo Production YBW Good Story Media / Lean-M Stable and predictable pricing Right of first look for new products Proven track record Sputnik Vostok Production Diversification of content suppliers Discovering new creative talents & ideas Securing all rights to the own content Full control over production costs & processes ~ 60 projects currently under development 13

15 More Original Ideas Are Generated by Our Enhanced Internal Creative Team Totally 60 titles in development Titles in full scale production titles have been presented to channels Pilots in production 10 Pilots to be confirmed 3 Titles under development 28 7titl titles under initial iti development During Costafilm produced 8 titles and 4 pilots, Soho Media 9 titles 14

16 CTC Improves Its Audience Profile in the Most Commercially Attractive Demographic 25% 20% 15% 10% 5% 0% 76% of advertisers budgets 22% 19% 17% 15% 15% 14% 13% 12% 12% 10% 10% 10% 9% 7% 8% 9% 7% 7% 8% 7% 7% 7% 7% 7% 7% 2% 3% Advertisers' demand FY 2010 CTC audience demographic profile Q CTC audience demographic profile Q % 8% 5% 5% 4% 0% % of total ad spending is concentrated in audience 58% is a share of audience in CTC channel total viewership in Q1 2012, up from 51% in Q We continue working on improving demographic profile of CTC s audience to better match advertiser demand Sources: TNS Gallup Media, Video International 15

17 Domashny and Peretz Are Benefiting from Fragmentation of Russian TV Market Audience shares, all 6-54 demographic Channels target demographics, % % % Top 3 state-controlled channels FY 2011 Q FY 2011 Q % 30% 1 st tier channels 20% 2 nd tier channels 10% Q 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, MTV, Rossiya 24, Muz TV, 2x2, TV Center, 7TV 16

18 Positive Audience Share Momentum in Q1'11 Q2'11 Q3'11 Q4'11 Q1'12 Q1'11 Q2'11 Q3'11 Q4'11 Q1'12 Q1'11 Q2'11 Q3'11 Q4'11 Q1'12 All All 6-54 W All Boarding School 3 (on air since ) Average share % (12.0% in All 14-44) Maximum share 13.6% (13.7% in All 14-44) Painfully Funny Average share 4.0% 3 Maximum share 8.4% Doctor Zaytseva s Diary ( ) Average share 15.3% (18.6% in All 14-44) Maximum share 17.4% (21.2% in All 14-44) It s a Shame to Show! Average share 3.7% Maximum share 4.9% The 80 s ( ) Average share 16.9% (20.7% in All 14-44) Maximum share 20.1% (23.8% in All 14-44) KVN. Standup comedy game show Average share 2.6% Maximum share 4.7% Detka ( ) Average share 13.1% (14.9% in All 14-44) Maximum share 15.5% (18.1% in All 14-44) Average share 9.4% 2 Maximum share 13.8% Mad Video Average share 3.0% Maximum share 5.4% Note:(1) in CTC target demographic All 6-54 Note:(2) in Domashny target demographic All Note:(3) in Peretz target demographic All

19 We Continue to Increase Our Technical Penetration Technical Penetration 1, % 94% 95% 91% 87% 88% 85% 82% 76% 71% 65% 80% 73% 68% 61% 54% 68% network We continue to improve the signal distribution through regional stations acquisitions and expanding our affiliate t k % of technical penetration is provided by CTC Media s owned-and-operated stations and repeater transmitters 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 18

20 Stable Consumer Goods Client Base with Both Large Multi-National and Local Advertisers Ad spending on CTC Media s channels by category * Vast majority of CTC Media s advertisers are basic 1Q Q 2012 consumer goods focused 1 Food and beverages 23% 27% 2 4 Other goods Pharmaceuticals and vitamins 16% 14% 17% 15% 3 5 Cosmetics and personal care products Telecoms 20% 6% 16% 6% CTC Media s advertisers budgets split: 80% multinationals, 20% local companies 6 8 Detergents t Appliances 3% 5% 4% 3% 7 9 Auto Retail 2% 5% 4% 3% Ad revenue concentration is declining: 38% of budgets came from top 10 clients vs 10 Beer 6% 3% 42% in Q Finance 1% 2% Growth from auto and finance categories in Q Notes: (*) National advertising sales for CTC, Domashny and Peretz Networks 19

21 Our Evolving Business Model Advertising sales structure since 2011 Advertisers Advertising Agencies Internal Sales Houses: External Sales Houses: Everest Sales RTR-Media Gazprom-Media / Alkasar Consultancy services 20

22 Enables Us to Capture Further Opportunities More control over the sales process Mastering internal expertise in direct sales Lower cost of sales as % of revenues Bundling sales Individual with additional approach to options, each client and including non- customized FTA offerings Working directly with advertisers and media agencies 21

23 We Are Strengthening Our Market Positions in the CIS 31 Channel, Kazakhstan (all 6-54 demographics) Ta arget audience share, % Significant growth in CIS Segment revenue and OIBDA margin 17.8 Q Q Q CTC/TV DIXI, Moldova (urban 6-54 demographics) 5.5 US$ mln % % 20.2% ce Target audien share, % FY 2009 FY 2010 FY 2011 Revenue OIBDA margin Q Q Q

24 Plus We Continue to Expand Internationally Increasing CTC Media s international brand awareness & value through CTC-international December 2009 Dish USA May 2011 Time Warner; RMG October 2011 Cablevision 3.5 mln Israel June 2011 Hot; Yes 1.5 mln Germany Baltic States Kazakhstan Europe North Africa Middle East Central Asia March 2011 Kartina TV IPTV October 2011 Viasat Broadcasting February 2012 Digital TV; Icon TV February 2012 uplink service HOT BIRD TM Russ sian-speak king popula ation 6 mln 4 mln 12.3 mln Kyrgyzstan April 2012 Europe-Asia cable and satellite network 2.5 mln Armenia Georgia Azerbaijan May 2012 Caucasus cable networks 10.4 mln Total Russian-speaking speaking population 40.2 mln 23

25 and Enter New Platforms to Be Wherever Our Viewers Are Videomore Domashny portal Channels websites Web + Partnership with social networks Smart TV & IPTV Mobile platforms 24

26 on the Way to Become a Leading New Media Player among Russian TV Companies # 2 legal video portal in Russia by audience In TOP-10 Russian most visited women portals 7 mln unique monthly visitors* More than 11,000 units of content Registered users spend 40 min on VideoMore daily up 180% y-o-y 1.5 mln unique monthly visitors* Highest affinity in female audience 150% (among TOP-10 women portals) vs 107% Unique niche focused on traditional family values Combination of video content streaming & social network functionality Competitive advantage due to video content library and production capabilities Plus over a million unique monthly visitors on our other New Media platforms Note: (*) Videomore average monthly unique visitors in Q1 2012; Domashniy portal average monthly unique visitors in March

27 Q Financial Highlights 9pp above market REVENUES +19% in Rub OIBDA +38% +4.7pp OIBDA MARGIN $ mln $55.1 mln 28.8% +50% EPS NET CASH POSITION $0.21 $111.0 mln CASH INVESTMENTS IN CONTENT $85.2 mln +10% DIVIDEND PAID IN Q1 $0.13 per share EXPECTED DIVIDEND PAYOUT IN % of 2011 net income Investing in quality content and returning excess cash to shareholders 26

28 To Conclude The largest independent and the only publicly listed broadcaster in Russia Growth company offering unique play on growing Russian & CIS TV advertising markets Targeting audiences which are most attractive to advertisers Controlling the whole value chain by vertically integrating content production, distribution and advertising sales High margins by industry standards & strong cash flow generation Commitment to returning surplus cash to shareholders 27

29 Q Balance Sheet and Cash Flow Highlights Consolidated Balance Sheet Highlights Consolidated Cash Flow Highlights (US$ mln) As of December 31, 2011 As of March 31, 2012 (US$ mln) Three months ended March 31, 2011 Three months ended March 31, 2012 (US$ mln) Cash and cash equivalents Cash at beginning of period Short-term investments Total assets including goodwill including broadcasting licenses including programming rights Working capital Total debt (Bank overdraft) Stockholders equity Net cash position Net cash provided by operating activities including acquisition of progr. and sublic. rights (77.4) (85.2) Net cash used in investing activities including acquisition of busineses (7.7) - including CapEx (4.0) (3.0) including receipts from/(investments in) deposits (38.6) (26.3) Net cash used in financing activities (21.4) (15.8) Cash at end of period CapEx (4.0) (3.0) CapEx as % of total revenue 2.4% 1.6% Free cash flow Notes: (1) Working capital = current assets - current liabilities (2) Net cash position = cash and cash equivalents + short-term term investments - total debt (3) Free cash flow = cash flow from operating activities - acquisitions of property and equipment and intangible assets 28

30 FY 2011 Income Statement Highlights (US$ 000 s except per share data) as reported Twelve Months Twelve Months Ended December 31, Ended December 31, comparablebasis, non- GAAP as reported as reported Change comparablebasis, non- GAAP Total operating revenues $601,285 $680,418 $766,360 27% 13% Total operating expenses (before nonrecurring items) (394,167) (473,300) (537,293) 36% 14% Total operating expenses (394,167) (473,300) (643,675) 63% 36% Adjusted OIBDA 220, , ,715 12% 12% Adjusted OIBDA margin 36.7% 32.5% 32.2% OIBDA 220, , ,334-36% -36% OIBDA margin 36.7% 32.5% 18.3% Adjusted net income attributable to CTC Media, Inc. stockholders 145, , ,561 5% 5% Adjusted diluted earnings per share $0.93 $0.93 $0.97 4% 4% Net income attributable to CTC Media, Inc. stockholders 145, ,731 53,118-64% -64% Diluted earnings per share $0.93 $0.93 $ % -63% 29

31 FY 2011 Balance Sheet and Cash Flow Highlights Consolidated Balance Sheet Highlights Consolidated Cash Flow Highlights Twelve months Twelve months As of December 31, As of December 31, ended ended December (US$ mln) December 31, 31, 2011 (US$ mln) 2010 (US$ mln) Cash at beginning of period Cash and cash equivalents Net cash provided by operating activities Short-term investments including acquisition of progr. and sublic. rights (250.5) (358.6) Total assets Net cash used in investing activities (130.5) (54.6) including goodwill including acquisition of busineses (23.8) (25.0) including broadcasting licenses including CapEx (29.9) (19.8) including programming rights Net cash used in financing activities (79.8) (115.0) Working capital Cash at end of period Total debt Stockholders equity CapEx (29.9) 9) (19.8) CapEx as % of total revenue 4.4% 2.6% Net cash position Free cash flow Notes: (1) Working capital = current assets - current liabilities (2) Net cash position = cash and cash equivalents + short-term term investments - total debt (3) Free cash flow = cash flow from operating activities - acquisitions of property and equipment and intangible assets 30

32 Appendix Voroniny y sitcom,, CTC Network ((Everybody y y loves Raymond y format)) Doctor Zaytseva s y Diary y sitcom,, CTC Network (Doctor s ( Diary y format)) 31

33 Audience Shares In All Most Commercially Attractive Demographic Audience shares 1, % Q Q TNT Channel lone CTC NTV Rossiya 1 Ren-TV Channel l5 Peretz TV-3 Disney* Domashny Rossiya 2 TV Center Muz-TV Zvezda 2x22 MTV Rossiya 24 Rossiya K Euronews Other (1) Source: TNS Gallup Media, CTC Media s Research Department (2) Includes audience shares of regional and non-fta channels (*) Operated under Semerka brand before 31 December,

34 Audience Shares In All 6-54 Demographic Audience shares 1, % Q Q Channel One NTV CTC TNT Rossiya 1 Ren-TV Channel 5 Disney* Peretz TV-3 Domashny TV Center Rossiya 2 Zvezda Muz-TV 2x2 Rossiya K MTV Rossiya 24 Euronews Other (1) Source: TNS Gallup Media, CTC Media s Research Department (2) Includes audience shares of regional and non-fta channels (*) Operated under Semerka brand before 31 December,

35 Operating Expenses as % of total operating expenses as % of total operating revenues Depreciation & amortization Stock-based compensarion Direct operating expenses 3% 4% 5% 2% 8% 8% 29% 30% 2% 3% 4% 6% 2% 6% 23% 22% SG&A expenses Amortization of programming & sublicensing rights and own production cost 55% 56% 43% 41% Q Q Q Q $141.5 mln $129.6 mln $141.5 mln $129.6 mln 34

36 Reconciliation of Non-GAAP Measures Reconciliation of consolidated adjusted OIBDA and other adjusted financial measures to consolidated OIBDA and other corresponding GAAP financial measures (US$ 000 s except per share data) OIBDA Total operating expenses Operating income Income before income tax Fully and diluted noncontrolling Income tax Net earnings interest expense income per share Three Months Ended December 31, 2011 Adjusted non-us GAAP results $ 92,757 $ (148,725) $ 88,033 $ 93,830 $ (28,604) $ 61,434 $ 0.39 Impact of impairment loss (89,539) (89,539) (89,539) (89,539) 3,570 (85,969) (0.55) Results as reported (under US GAAP, except for OIBDA which is a non-gaap financial measure) $ 3,218 $ (238,264) $ (1,506) $ 4,291 $ (25,034) $ (24,535) $ (0.16) (US$ 000 s except per share data) OIBDA Total operating expenses Operating income Income before income tax and noncontrolling interest Income tax expense Net income Fully diluted earnings per share Twelve Months Ended December 31, 2011 Adjusted non-us GAAP results $246,716 $ (537,293) $ 229,067 $ 243,301 $ (83,342) $ 152,561 $ 0.97 Impact of impairment loss (106,382) (106,382) (106,382) (106,382) 6,939 (99,443) (0.63) Results as reported (under US GAAP, except for OIBDA which is a non-us GAAP financial measure) $140,334 $ (643,675) $ 122,685 $ 136,919 $ (76,403) $ 53,118 $

37 Reconciliation of Non-GAAP Measures Reconciliation of consolidated adjusted OIBDA and other adjusted financial measures to consolidated OIBDA and other corresponding GAAP financial measures (US$ 000 s except per share data) OIBDA Total Operating Expenses Operating income Net Income Before Tax Income Tax Expense Net Income EPS (fully diluted) Year ended December 31, 2008 Adjusted non-us GAAP results $ 280,241 $ (373,307) $ 266,864 $ 237,077 $ (50,205) $ 176,133 $ 1.11 Impact of non-cash impairment of intangible assets of DTV, Kz and Moldova (232,683) (232,683) (232,683) (232,683) 30,331 (153,679) (0.97) Results as reported (under US GAAP, except for OIBDA) $ 47,558 $ (605,990) $ 34,181 $ 4,394 $ (19,874) $ 22,454 $ 0.14 (US$ 000 s except per share data) OIBDA Total operating expenses Operating income Income tax expense Income before income tax and non- Noncontrolling interest Net income attributable to CTC Media, Inc. stockholders Fully diluted earnings per share Year ended December 31, 2009 Adjusted non-us GAAP results $ 211,256 $ (306,311) $ 199,802 $ 195,972 $ (49,374) $ (2,630) $ 143,968 $ 0.91 Impact of non-cash intangible asset impairment charge (18,739) (18,739) (18,739) (18,739) 3,748 - (14,991) (0.10) Impact of Stock-based compensation expense related to settlement of litigation against former executive (28,588) (28,588) (28,588) (28,588) - - (28,588) (0.18) Results as reported (under US GAAP, except for OIBDA, which is a non-gaap financial measure) $ 163,929 $ (353,638) $ 152,475 $ 148,645 $ (45,626) $ (2,630) $ 100,389 $

38 Reconciliation of Non-GAAP Measures (continued) Reconciliation of consolidated OIBDA to consolidated operating income USD mln Q Q FY 2011 FY 2010 FY 2009 FY 2008 FY 2007 FY 2006 FY 2005 FY 2004 Operating income 49,971 35, , , ,475 34, , ,313 90,187 62,559 Add: depreciation and amortization 5,157 3,936 17,649 13,736 11,454 13,379 27,361 19,651 13,920 7,962 OIBDA 55,128 39, , , ,929 47, , , ,107 70,521 Reconciliation of consolidated OIBDA margin to consolidated operating income margin USD mln Q Q FY 2011 FY 2010 FY 2009 FY 2008 FY 2007 FY 2006 FY 2005 FY 2004 Operating margin 26.1% 21.7% 16.0% 34.4% 30.1% 5.3% 40.9% 41.6% 38.0% 40.2% Add: depreciation and amortization as percentage of revenue 2.7% 2.4% 2.3% 2.3% 2.3% 2.1% 5.8% 5.3% 5.8% 5.1% OIBDA margin 28.8% 24.1% 18.3% 36.7% 32.4% 7.4% 46.7% 46.9% 43.8% 45.3% Reconciliation of comparable-basis, non-gaap total operating revenues to total operating revenues USD mln Comparable-basis total operating revenues 180, , , , , , ,418 Agency commission fees payable to Video International ti in connection with Russian advertising sales (25,072) (35,875) (56,257) (60,087) (89,458) (67,994) (79,133) (excluding commissions for regional advertising sales to local clients) Total operating revenues 155, , , , , , ,285 37

39 Contact Information and Disclaimer For further information please visit or contact: Ekaterina Ostrova Director, Investor Relations Tel: +7 (495) Irina Klimova Investor Relations Manager 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 for sale in the United States. Neither the presentation nor any copy of it may be taken or transmitted into or distributed in the United States of America or to any U.S. person within the meaning of Regulation S under the United States Securities Act of 1933, as amended (the Securities Act ). 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, statement regarding Russian advertising market growth; statements regarding share trends in changing audience in 2012; statement regarding Russian Internet consumption growth; developments in the volume and pricing of television advertising in the Company s target markets; the Company s anticipated advertising sellout; the Company s anticipated operating expenses and capital expenditures and others. These statements reflect the Company's current expectations concerning future results and events. These forward-looking statements involve known and unknown risks, uncertainties ti and other factors which h 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 forward-looking 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 continued successful operation of the Company s own internal sales house structure; depreciation of the value of the Russian ruble compared to the US dollar; 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 February 28, 2012 and our recently report on Form 10-Q filed with the SEC on May 3, 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. 38