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Slovak Republic. Mark í za. Slovak Republic. Country and Economy Update 2006. Sources: ING, Informa, Global Insight. “Slovakia’s A rating is supported by rapid progress in public sector reform, strong growth prospects and the prospect of entry into the Eurozone by 2009.”
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Slovak Republic Markíza
Slovak Republic Country and Economy Update 2006 Sources: ING, Informa, Global Insight • “Slovakia’s A rating is supported by rapid progress in public sector reform, strong growth prospects and the prospect of entry into the Eurozone by 2009.” Standard & Poor’s Ratings Services (March 27, 2006)
Slovak Republic Country and Economy Update 2006 10 reasons why the Slovak Republic attracts foreign investors • Central European hub • Political and economic stability • 19% flat tax rate • Availability of highly skilled workforce • Low labor costs vs high labor productivity • Liberal Labor Code • Large selection of industrial land and offices available • Strong engineering tradition • Infrastructure growing steadily • Examples of foreign investments: Peugeot, Kia, US Steel, Whirlpool, Dell, IBM Slovakia has successfully implemented many structural reforms: Banking and Finance, New Pension reform, New Labor Code, Health Care System Reform, Social System Reform, Act on Commercial Registry, New Investment Incentives Program Risk: New government is socially oriented and its economic strategy is still unknown
Station’s All Day Audience Share (12+)Six months to June 30, 2006 TV Markíza 1996 80% 2019 86% 24 (from 5/7/2005) 39 % 49 % 32% 34% 65% Launched: Ownership: License expiry: Technical reach: Hours broadcast daily: Locally produced content: Prime-time locally produced content: All day audience share YTD June 2006: Prime time audience share YTD June 2006: TV advertising net revenue share 2005: Our operation Sources: CME Estimates, PMT / TNS SK • A leader in the media market for 10 years and one of the strongest Slovak brands • Positioned as friendly television for the whole family with a variety of programming genres targeting the 12-49 segment of the market
Competition Terrestrial • Public TV (two channels): • Technical coverage 100% • Funding: Strongly subsidized from the state budget, license fee (SKK 1.8 billion per year) and advertising (3% per day) • A well-built acquisition library • JOJ • Privately owned channel • Technical coverage: improving, currently at 82% • Funding: improved quality of own production and library • Strong schedule for autumn and winter 2006/2007 Cable and digital penetration • 26 cable channels in Slovak and Czech language, 6 Hungarian and 45 regional stations • Cable penetration1 is 53%, satellite penetration 3%, only 1.5 % is digital reception • Strong technical coverage by free to air terrestrial TV signals • Low penetration of digital satellites and cable in Slovak households, particularly in markets with less than 100,000 people 1 Source: TMT Establishment Survey 2006
Market leadership All day every day TV Markíza has the leading audience share in almost every spot Source: PMT / TNS SK
Prime time audience share trends 2005/2006 Prime Time Trends 12+ (August 2005-September 2006) TV JOJ’s VyVoleni 2 has not been able to replicate the ratings it achieved in the first season TV JOJ´s signal coverage enlarging - 82% Start of Fall Season HockeyChampionship Football World Cup Winter Olympic Games
Autumn Programming Schedule Continuation of successful locally produced fiction • Neighbours (weekly comedy sitcom with the 2 top Slovak comedians) - 18.7/48.6% (12-49 = 17.7/53.1%) • Clever (show based on a purchased format) 15.7/40.0% (12-49 = 13.0/41.6%) • Nora and Braňo (documentary soap about the life of a prominent couple) – 14.5/42.0% (12-49 = 11.5/42.8%) • Strictly Come Dancing – planned from 8 October Neighbours Nora and Braňo
Autumn Programming Schedule • TV News (19:00) – 21.8/76.9% (12-49 = 13.0/68.7%) • Vilomeniny (local reality competition with two teams) 15.4/39.5% (12-49 = 12.7/40.3%) • Wife Swap (based on a licensed format) 11.9/31.4% (12-49 = 10.3/35.9%) • Seven Ltd (weekly evening talk show) 6.0/36.5% (12-49 = 4.9/32.1%) Vilomeniny Wife Swap
Restructuring “New Markíza” able to expand its leadership, grow sales and margins • New organisation structure • Overhead optimization and dubbing production cost reduction • New sales strategy • Programming cost optimization – continuing process • Regional synergies
Slovak Republic Segment Net Revenues, EBITDA and EBITDA Margin For a reconciliation of non-GAAP financial measures presented here to the most comparable GAAP financial measures, please see the corresponding reconciliation slides on page 52 – 53 of our Q2 2006 results presentation on www.cetv-net.com.
Slovak Republic Looking Ahead • Maintain audience share and ratings • Target ratings 15-17% (prime time) and audience share of 33% all day • Increase the brand power • Improve the leadership factor • Strategy to increase sales and control cost. 2007 will form a solid cost base for future years • New channels development: • Potential new Czech-Slovak channel • Internet channel • Focus on the new business unit – “Interactivity” • Take active part in the digitalization process