GRUPO ANTENA 3 PRESENTATION TO INVESTORS JP Morgan Cazenove CEO Media Conference 2010 June 2010
2010 MARKET IN NEGATIVE ANALOGUE SWITCH OFF? STRUCTURAL CHANGES PENDING Reducing uncertainties MARKET IN POSITIVE SMOOTH TRANSITION TO DIGITAL STRUCTURAL CHANGES IN PROCESS ANTENA 3 ADVERTISING BUNDLING FAMILY OF CHANNELS FLEXIBILITY IN COSTS DIVERSIFICATION ANTENA 3.0 2 Antena 3 JP Morgan Cazenove CEO Media Conference_June 2010
2010 MARKET IN NEGATIVE ANALOGUE SWITCH OFF? STRUCTURAL CHANGES PENDING Reducing uncertainties MARKET IN POSITIVE SMOOTH TRANSITION TO DIGITAL STRUCTURAL CHANGES IN PROCESS ANTENA 3 ADVERTISING BUNDLING FAMILY OF CHANNELS FLEXIBILITY IN COSTS DIVERSIFICATION ANTENA 3.0 3 Antena 3 JP Morgan Cazenove CEO Media Conference_June 2010
Advertising market in Spain After several years of significant growth, advertising market has moved back to 2003 levels, but Conventional Advertising Market In million OTHERS INTERNET 5,400 5,575 CAGR: +8% 6,150 6,720 7,300 7,985 7,100 CAGR: -16% 5,620 PRESS RADIO 2,172 2,317 2,677 2,951 3,180 3,469 3,082 2,368 TV CAGR: +10% CAGR: -17% 2002 2003 2004 2005 2006 2007 2008 2009 Source: Infoadex. 4 Antena 3 JP Morgan Cazenove CEO Media Conference_June 2010
Advertising market in Spain: TV, leading position...tv has even increased its market share within conventional advertising TV consumption has steadily risen Market share by media 02 vs 09 TV consumption in Spain 5,400 M 5,620M In min/viewer OTHERS INTERNET 8.4% -0.9 pc 7.5% 1.3% +10.4 pc 11.7% CAGR: +1% PRESS 41.2% -12.0pc 29.2% 223 227 227 218 217 217 RADIO 9.0% +0.5pc 9.5% 211 213 TV 40.1% +2.0pc 42.1% 2002 2009 2002 2003 2004 2005 2006 2007 2008 2009 Source: Infoadex Source: Kantar media 5 Antena 3 JP Morgan Cazenove CEO Media Conference_June 2010
TV advertising market in Spain: Key variables Prices have dropped to 2004 levels and inventory remained close to sold out levels TV sector prices evolution TV sector inventory 2009= 100 122 125 138 128 89% 96% 85% 79% 92% 87% 84% 90% 100 100 86 91 2002 2003 2004 2005 2006 2007 2008 2009 2002 2003 2004 2005 2006 2007 2008 2009 Source: Internal estimates. Prices in nominal terms Inventory in 13h-25h slot. 6 Antena 3 JP Morgan Cazenove CEO Media Conference_June 2010
TV, clear competitive position among the media TV is currently the most competitive media by coverage and prices 89 Coverage by media 55 50 39 35 In % TV Radio Magaz. Newsp. Internet 13.3 CPT by media In 2.5 2.7 7.4 7.9 7 Antena 3 JP Morgan Cazenove CEO Media Conference_June 2010 TV Radio Newsp. Internet Magaz. Source: Coverage: EGM 1st survey 2010 / Prices: Internal estimates 1Q10
Advertising market in Spain: 2010 estimates 1H10 TV advertising, clearly positive Current consensus forecasts flat growth in 2010 TV Advertising by quarter yoy TV FY2010 estimates 2% 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10e -3% -6% -11% 2,368 M Consensus* +1% -17% -19% -1% -23% -26% FY08= -11% -34% FY09=-23% 2009 2010e Source: Infoadex and Internal estimates A3 * Consensus: Average of the most recent research report 8 Antena 3 JP Morgan Cazenove CEO Media Conference_June 2010
Antena 3: Market share & power ratio Antena 3 Current Antena 3 s power ratio at its highest level Antena 3 s power ratio Market share Power ratio 26.8% 1.3x 29.6% 1.4x 27.1% 1.4x 24.9% 23.1% 25.1% 28.7% Audience share 20.8% 21.3% 19.4% 1.4x 1.3x 1.5x 1.9x 17.8% 17.0% 16.6% 15.1% DTT channels A3 s advertising bundling 2004 2005 2006 2007 2008 2009 1Q10e Source: Infoadex 9 Antena 3 JP Morgan Cazenove CEO Media Conference_June 2010
Antena 3: Market share & power ratio Antena 3 New market structure without TVE boosted market share and power ratio Market share & Power ratio 1.9x Antena 3 s adv. revenues in 1Q10 1.5x +31% 13.0% In % 0 20 24 +5pc 29 6.4% OTHERS 56 +15pc 71 GRPs Prices Revenues +20% A3 1Q09 T5 1Q10 Antena 3 s power ratio Source: Infoadex 1Q10 + Kantar Media Source: Antena 3 s 1Q10 results 10 Antena 3 JP Morgan Cazenove CEO Media Conference_June 2010
TV advertising market outlook TV ad market expected to grow over GDP in coming years TV Ad spend vs GDP Perfect correlation GDP = TV Ad Overreaction GDP> TV Ad Closing the gap TV Ad > GDP Avg. 2010-2012 forecasts Nominal GDP +1.6% Consensus TV Ad market +3.6% 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Source: Nominal GDP: Banco de España (2002-09); Funcas 2010-11, Ernest & Young 2012 TV ad market: Infoadex (2002-09); Consensus 2010-12: Zenith Media & Most recent research reports 11 Antena 3 JP Morgan Cazenove CEO Media Conference_June 2010
2010 MARKET IN NEGATIVE ANALOGUE SWITCH OFF? STRUCTURAL CHANGES PENDING Reducing uncertainties MARKET IN POSITIVE SMOOTH TRANSITION TO DIGITAL STRUCTURAL CHANGES IN PROCESS ANTENA 3 ADVERTISING BUNDLING FAMILY OF CHANNELS FLEXIBILITY IN COSTS DIVERSIFICATION ANTENA 3.0 12 Antena 3 JP Morgan Cazenove CEO Media Conference_June 2010
Analogue switch off Analogue switch off successfully completed by April 2010 Fragmentation has increased thematic channels audience share Penetration & Audience by distribution Audience by type of channel In % In % Others (cable,sat,.) 2 0 2 1 2 2 7 7 1 0 0 0 7 7 7 3 5 4 7 1 3 1 9 Pay TV Others Thematics 2 6 Analogue 4 3 5 8 5 3 7 9 8 3 7 6 7 0 Generalists Digital 2 2 D e c -08 D e c -09 J un 1 0 e D e c -08 D e c -09 J un 1 0 e DTT Penetration Source : Kantar Media Jun10e: 20 th June Source : Impulsa TDT Jun10e: 20 th June 13 Antena 3 JP Morgan Cazenove CEO Media Conference_June 2010
Audience share evolution Audience erosion in core channels offset by complementary channels In % 19.1 Core channel audiences In % Complementary channel audiences 16.6 16.1 16.8 14.7 14.1 12.2 11.6 9.3 6.9 6.8 5.1 1H08 1H09 1H10* 4.6 3.0 3.0 2.2 0.8 1.0 0.8 0.2 0.2 0.8 0.2 0.0 1H08 1H09 1H10* -3.9-4.4-2.5-2.4 +1.7 +0.2 +2.2 +2.0 +3.0 +0.8 +0.6 +3.8 Source: Kantar Media 24h Total individuals: 4+ *1H10: Jan-20 th June 14 Antena 3 JP Morgan Cazenove CEO Media Conference_June 2010
Audience share in 1H10: 24h Antena 3, solid second position among commercial FTA players Total individuals 1H10 Commercial Target 1H10 Complementary Channels Core channel 24.8 Complementary Channels Core channel 21.1 15.1 16.9 16.0 17.7 11.6 7.8 6.8 7.1 8.5 10.1 8.8 8.7 3.0 1.0 5.0 2.1 0.8 5.4 NET TV PAY TV OTHER NET TV PAY TV OTHER Source: Kantar Media Audience share 24h, Jan-20 th June; Total Individuals: 4+ & Commercial Target:16-54 yr 15 Antena 3 JP Morgan Cazenove CEO Media Conference_June 2010
Audiences: Advertising bundling to face fragmentation Antena 3 Unique simultaneous advertising across the three channels, as of 1st February 2009 No bundling Bundling 15.1% 15.1% Low audience Low prices High audience High prices 2.9 12.2 15.1 More attractive for advertisers (+GRPs) Wider coverage Higher frequency Better Day part mix Premium prices 1H 10 1H 10 Source: Kantar Media. 24h, Total individuals 4+, Jan-20 th June 2010 Revenues 09: 10x 16 Antena 3 JP Morgan Cazenove CEO Media Conference_June 2010
Audiences: Facing fragmentation Antena 3 Antena 3 currently sells advertising not only for its own family of channels but also for third player s channels In % 1H10 Total Individuals by channel A3 advertising sales (17.9%) 16.8 Antena 3 (15.1%) + Veo (0.7%) + Disney Channel (2.1%) 15.1% 14.7 12.1 11.6 6.9 6.8 3.4 2.9 1.0 0.7 1.8 1.2 1.1 1.1 0.6 0.3 2.1 1.0 0.7 0.4 Source : Kantar Media: 24h, Total individuals 4+, Jan-20 th June 2010 17 Antena 3 JP Morgan Cazenove CEO Media Conference_June 2010
2010 MARKET IN NEGATIVE ANALOGUE SWITCH OFF? STRUCTURAL CHANGES PENDING Reducing uncertainties MARKET IN POSITIVE SMOOTH TRANSITION TO DIGITAL STRUCTURAL CHANGES IN PROCESS ANTENA 3 ADVERTISING BUNDLING FAMILY OF CHANNELS FLEXIBILITY IN COSTS DIVERSIFICATION ANTENA 3.0 18 Antena 3 JP Morgan Cazenove CEO Media Conference_June 2010
Changes in the sector: TVE New role for the state-owned television (TVE): 2009 2010 1,100 M 1,200 M Public Budget 55% Public Budget+ Radiowave toll 60% Others 5% Others 5% Advertising Revenues 40% 420 M Freed up to the market Tax on revenues 35% 0.9% on telecoms 1.5% on pay TVs 3.0% on FTA TVs 19 Antena 3 JP Morgan Cazenove CEO Media Conference_June 2010
Changes in the sector: New Audiovisual Law New Audiovisual Law: Timing: Into force by 1st May 10 (except for advertising time which is only valid from 1st August) Previous regulation New Audiovisual Law TV licences Advertising time Product placement DTT Pay TV 10 years 12 min/hour (spot + teleshopping) 5 min/h (autopromotion + telepromotion) Sponsorship Not allowed One channel per player 15 years + automatic renewal under certain conditions 12 min/hour (spot+ teleshopping) 3 min/h (telepromotion) 5 min/h (autopromotion) Sponsorship Allowed 50% of channels per player European production Regulator Obligation to invest 5% of annual TV revenues in European Films, TV movies and others (at least, 60% in spanish language) No Council Obligation to invest 5% of annual TV revenues in European Films, TV Movies and TV Series. Two conditions: * Minimum 60% in spanish language * TV Movies and Series, no more than 2% Creation of a Council for Audiovisual Media (CEMA) 20 Antena 3 JP Morgan Cazenove CEO Media Conference_June 2010
Changes in the sector: Consolidation Number of players reduced by two in one year 2009 2010 MAIN COMPETITORS 4 Commercial FTA TV players 2 State-owned TV players MAIN COMPETITORS 2 or 3 Commercial FTA TV players? 48% 36% Audience share 48% 36% 70% 30% Market share 88% 12% 1.5x 0.8x Power ratio 1.8x 0.3x Source: Audience share: Kantar Media. Total Individuals:4+.2009 / Market share: Infoadex 21 Antena 3 JP Morgan Cazenove CEO Media Conference_June 2010
Changes in the sector: Consolidation Spanish future outlook similar to other European markets Private Public Private Public 1.5x 0.9x Power ratio 1.3x 0.5x Private Public Private Public 1.9x 0.1x Power ratio 1.5x 0.8x Source: Internal estimates from several sources 22 Antena 3 JP Morgan Cazenove CEO Media Conference_June 2010
Changes in the sector: DTT (Pay TV) Is Pay TV DTT a market opportunity? Stagnant pay TV penetration throughout the last decade Pay TV market penetration In million households In million households Penetration Pay TV DTT Pay TV 0.1 m Satellite 1.9 m 15.0 16.1 Cable 1.3 m 12.3 IPTV 0.7 m 28% 23% 25% Market opportunity? 12.1m non Pay-TV households... 2001 2005 2009 Source: CMT 2009 Source: CMT, Antena 3 23 Antena 3 JP Morgan Cazenove CEO Media Conference_June 2010
Changes in the sector: TV contents & advertising TV contents and advertising need to adapt to structural changes Product definition Production & Contents Programming Grid Distribution Advertising 1990 One-channel products Acquisitions & in house productions One FTA channel Traditional spot Multichannel products Acquisitions & internal productions commisioned to third parties Multichannel FTA / Pay TV Integrating ads into the content 2010 24 Antena 3 JP Morgan Cazenove CEO Media Conference_June 2010
Structural changes in the sector Facing structural changes: FAMILY OF CHANNELS CONCEPT INCREASING COST FLEXIBILITY DIVERSIFICATION ANTENA 3.0 MULTIPLATFORM STRATEGY 25 Antena 3 JP Morgan Cazenove CEO Media Conference_June 2010
Family of channels Antena 3 Providing a unique full spectrum of targets which will be reinforced with a new complementary channel in 2H10 April 10 2H10 2013 Analogue Switch off New frequencies to be allocated / Interim multiplex Allocation of A3 s own multiplex 55-64 Age 4º 4-12 Male Female 26 Antena 3 JP Morgan Cazenove CEO Media Conference_June 2010
Flexibility in costs Antena 3 Changes in the industrial area of the business A3 s TV business in 2009 A3 s TV business in 2010 Product definition Product definition Content purchase Content purchase Programming Programming Production services Externalization process 2009-2010 Outsourced services 400 employees (30% TV workforce) 10% avg cost reduction in next years 3 years payback on severance pay 27 Antena 3 JP Morgan Cazenove CEO Media Conference_June 2010
Proved discipline in costs Antena 3 Rigorous cost control bottomed out operating expenses at the lowest level in last years Total OPEX evolution (M ) 657 654 682 669 623 539 551 569 574 536 2005 2006 2007 2008 2009 2010 * Spanish GAAP Group OPEX TV OPEX 28 Antena 3 JP Morgan Cazenove CEO Media Conference_June 2010
Geographical diversification: Colombia Antena 3 Colombia TV future market outlook FTA Pay TV Others Caracol RCN Canal 3 Cable Local 40% 40% 20% Antena 3 Colombia 55% Antena3 Other local investors CEETV 40% Grupo Planeta 2007 23rd June 10 27th July 10 2011 Project milestones Public offer announcement Technical bid Canal 3, sole bidder Financial bid Minimum bid: 60 MU$ Starting operations 29 Antena 3 JP Morgan Cazenove CEO Media Conference_June 2010
Geographical diversification: Colombia Antena 3 A unique opportunity to implement Antena 3 s know-how Market evolution (mill US$) Market structure by player CAGR: +9% 473 470 453 +5%-10% Others 7% 8% 5% 364 416 Pay TV 39% 43% 248 282 317 Caracol RCN 28% 26% 44% 2002 2003 2004 2005 2006 2007 2008 2009 2010e Audience share M arket share Source: Asomedios; 2010e: CEETV Average exchange rate at 1Q10 Source: IBOPE 30 Antena 3 JP Morgan Cazenove CEO Media Conference_June 2010
Business diversification: Multimedia Group Antena 3 Using cross-media promotion capabilities TV RADIO INTERNET CINEMA Coverage Frequency Segmentation Exclusivity MULTIMEDIA GROUP 31 Antena 3 JP Morgan Cazenove CEO Media Conference_June 2010
Radio business Antena 3 Radio business increased listeners by 12% over the last three years In a falling ad market scenario, radio division increased its market share Listeners evolution Market share 17.3% +12% A3 s radio Market share 15.9% 15.7% -11% 2,608 2,921 3,255 Radio Ad market 678 642 537 2007 2008 2009 2007 2008 2009 Source: EGM Surveys Monday to Friday (.000) (moving average) Source: Infoadex 32 Antena 3 JP Morgan Cazenove CEO Media Conference_June 2010
Antena 3.0 Antena 3 Developing Antena 3.0 strategy Television Agreements with main TV manufacturers: A3 to have privileged position in connected TV s Distribution agreements with digital platforms. Mobile Development of apps for smartphones and tablets Internet New web launched in June 10 New contents: 30% exclusive web content Exploitation of library. VoD in test period Last 7-days catch-up service 33 Antena 3 JP Morgan Cazenove CEO Media Conference_June 2010
Internet division Antena 3 Developing strategy in Internet Video is king (HD) 30% exclusive web content 10 h/day live contents Content Container Content policy Explotaiton of library VOD in test period Last 7-day catch-up Internet, previous model New web launched June 10 Internet, new model Advertising Commercial policy Advertising Pay Monthly data Jan-May 10 Unique users: 4 mill (+38%) Visited pages:66 mill (+41%) Served videos:27 mill (+62%) 1st-15th Jun 10 (% yoy) Served videos >25% 34 Antena 3 JP Morgan Cazenove CEO Media Conference_June 2010
35 Antena 3 JP Morgan Cazenove CEO Media Conference_June 2010 Back Up Slides
Consolidated Group (IFRS) 1Q10 Results in mill. 1Q10 1Q09 YoY Net Revenues 192.9 174.9 +10.3% OPEX 167.9 152.2 +10.3% EBITDA 25.0 22.8 EBITDA Margin 13.0% 13.0% Net profit 15.9 8.1 Net profit Margin 8.2% 4.6% +10.0% +95.8% 36 Antena 3 JP Morgan Cazenove CEO Media Conference_June 2010
Television (IFRS) 1Q10 Results in mill. 1Q10 1Q09 YoY Net Revenues 169.2 149.6 +13.1% OPEX 144.9 130.2 +11.3% EBITDA 24.3 19.4 EBITDA Margin 14.3% 13.0% Net profit 14.0 7.8 Net profit Margin 8.3% 5.2% +25.0% +80.4% 37 Antena 3 JP Morgan Cazenove CEO Media Conference_June 2010
Radio (IFRS) 1Q10 Results in mill. 1Q10 1Q09 YoY Net Revenues 21.6 21.7-0.2% OPEX 16.5 17.2-4.3% EBITDA 5.2 4.5 EBITDA Margin 23.9% 20.6% Net profit 3.1 2.6 Net profit Margin 14.2% 11.9% +15.8% +19.2% 38 Antena 3 JP Morgan Cazenove CEO Media Conference_June 2010
Additional information Investor Relations Department Phone: +34 91 623 46 14 E-mail: ir@antena3tv.es Web: www.grupoantena3.com Legal Notice The information contained in this presentation has not been independently verified and is, in any case, subject to negotiation, changes and modifications. None of the Company, its shareholders or any of their respective affiliates shall be liable for the accuracy or completeness of the information or statements included in this presentation, and in no event may its content be construed as any type of explicit or implicit representation or warranty made by the Company, its shareholders or any other such person. Likewise, none of the Company, its shareholders or any of their respective affiliates shall be liable in any respect whatsoever (whether in negligence or otherwise) for any loss or damage that may arise from the use of this presentation or of any content therein or otherwise arising in connection with the information contained in this presentation. You may not copy or distribute this presentation to any person. The Company does not undertake to publish any possible modifications or revisions of the information, data or statements contained herein should there be any change in the strategy or intentions of the Company, or occurrence of unforeseeable facts or events that affect the Company s strategy or intentions. This presentation may contain forward-looking statements with respect to the business, investments, financial condition, results of operations, dividends, strategy, plans and objectives of the Company. By their nature, forward-looking statements involve risk and uncertainty because they reflect the Company s current expectations and assumptions as to future events and circumstances that may not prove accurate. A number of factors, including political, economic and regulatory developments in Spain and the European Union, could cause actual results and developments to differ materially from those expressed or implied in any forward-looking statements contained herein. The information contained in this presentation does not constitute an offer or invitation to purchase or subscribe for any ordinary shares, and neither it nor any part of it shall form the basis of or be relied upon in connection with any contract or commitment whatsoever. 39 Antena 3 JP Morgan Cazenove CEO Media Conference_June 2010