Q Investor Presentation

Transcription

1 Q Investor Presentation

2 Cautionary Language This presentation contains forward-looking statements, including those relating to our capital needs, business strategy, expectations and intentions. Statements that use the terms believe, anticipate, trend, expect, plan, estimate, forecast, intend and similar expressions of a future or forward-looking nature identify forward-looking statements for purposes of the U.S. federal securities laws or otherwise. For these statements and all other forward-looking statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of Forward-looking statements are inherently subject to risks and uncertainties, many of which cannot be predicted with accuracy or are otherwise beyond our control and some of which might not even be anticipated. Forward-looking statements reflect our current views with respect to future events and because our business is subject to such risks and uncertainties, actual results, our strategic plan, our financial position, results of operations and cash flows could differ materially from those described in or contemplated by the forward-looking statements contained in this report. Important factors that contribute to such risks include, but are not limited to, those factors set forth under "Risk Factors in our most recent Quarterly Report on Form 10-Q as well as the following: the effect of changes in global and regional economic conditions and the extent, timing and duration of the recovery in our markets; levels of television advertising spending and the rate of development of the advertising markets in the countries in which we operate; the extent to which our debt service obligations and covenants may restrict our business; our exposure to additional tax liabilities as well as liabilities resulting from regulatory or legal proceedings initiated against us; our ability to refinance our existing indebtedness; our success in continuing our initiatives to diversify and enhance our revenue streams; our ability to make cost-effective investments in our television businesses, including investments in programming; our ability to develop and acquire necessary programming and attract audiences; our ability to consummate the sale of our operations in Croatia and Slovenia; and changes in the political and regulatory environments where we operate and in the application of relevant laws and regulations. The foregoing review of important factors should not be construed as exhaustive and should be read in conjunction with other cautionary statements that are included in our filings. For a more detailed description of these uncertainties and other features, please see the Risk Factors section in our most recent Quarterly Report on Form 10-Q filed with the U.S. Securities and Exchange Commission. Forward-looking statements speak only as of the date on when they were made and we undertake no obligation to publicly update or revise any forwardlooking statements, whether as a result of new information, future developments or otherwise. Non-GAAP Financial Measures While CME reports its results in accordance with generally accepted accounting principles in the United States ( GAAP ), this presentation also refers to several non-gaap financial measures, including OIBDA, OIBDA margin, free cash flow and unlevered free cash flow. These non-gaap financial measures are used in managing the business, and as such management believes they may provide meaningful information to investors about underlying trends in our business. While our reporting currency is the dollar, our consolidated revenues and costs are divided across a range of European currencies and CME Ltd. s function currency is the Euro. Given the significant movement of the currencies in the markets in which we operate against the dollar, we believe that it is useful to provide percentage movements based on actual ( % Act ) percentage movements, which includes the effect of foreign exchange, as well as like-for-like percentage movements ( % Lfl ). The like-for-like percentage movement references reflect the impact of applying the current period average exchange rates to the prior period revenues and costs. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, CME s reported results prepared in accordance with GAAP. Please see the attached Financial Review for a description of non-gaap financial measures and reconciliations to the most directly comparable GAAP financial measures. 2

3 Leading Television Broadcaster in CEE 2017 Market information (Continuing operations) Combined population: more than 40 m Combined TV ad market size: approx. $807m (an increase of 6% at constant rates compared to 2016) TV ad market size by geography Bulgaria $105m Czech Republic $313m 1 1 Slovak Republic $144m Romania $245m 1 On July 9, 2017, we agreed to sell our Croatia and Slovenia operations, subject to obtaining regulatory approvals and other customary closing conditions. Accordingly, these operations are classified as held for sale and they are presented as discontinued operations for all periods in this presentation; and the discussion herein relates to our continuing operations in the four remaining operating segments. Source: International Monetary Fund ("IMF"), CME estimates Source: 2017 CME estimates at average 2017 exchange rates 3

4 Why invest in CME? Our Strategy: Leveraging popular content to maintain or increase our television audience share leadership and advertising market shares; Driving growth in television advertising revenues through our pricing strategies; Increasing carriage fees and subscription revenues to provide more diversified and predictable income; Expanding our online content offerings to further diversify revenues; and Maintaining a strict cost discipline and identifying cost synergies while safeguarding our brands and competitive strengths. Our Competitive Strengths: Market leading reach in television audience; Popular media brands; Our people; and Strong local content production and program library. 4

5 Leading Media Brands In 2017, btv was the strongest brand among the television stations in Bulgaria. For the last five years, TV Nova has been the most recognized brand for television audiences in the Czech Republic. The Nova Group won an award for set design and was recognized for its brand design in the Promax BDA Europe Awards. In 2017, PRO TV was reconfirmed for the 15th year, as the primary source of information for Romanians, both on television and online. Ever since its launch, Markíza has been the most recognizable TV brand in Slovakia. Markíza broadcasts one of the most trustworthy news among the Slovak broadcasters. Sources: btv - "My Love Marks" national ranking, Superbrand contest, TV Nova - Kantar TNS; TV Brand tracking, ProTV - Reuters Institute 2017 report, Markiza - Median 5

6 Net Revenues for Continuing Operations by Quarter Constant Exchange Rates 1 Actual Exchange Rates US$ m Q1 +5% +8% +1% +13% % +3% % +8% +9% +13% +5% % +5% % +11% % +14% Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q2 Q3 Q4 Q Q Q Q Q Q Q US$ m Q1 Q2 Q3 Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q ¹ Reflects the impact of applying the most recent quarterly period average exchange rates to the prior period revenues. 6

7 OIBDA Margin for Continuing Operations by Quarter 40% 35% 35% 35% 30% 33% 30% 31% 30% 29% 26% 25% 20% 22% 19% 21% 22% 15% 16% 18% 10% 9% 11% 5% 0% Q1 Q2 Q3 Q4 FY For a reconciliation of OIBDA to Operating Income, see Non-GAAP Financial Measures beginning on slide 42. 7

8 Last Twelve Months (LTM) OIBDA Trend by Quarter actual rates (14) (66) (49) Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q For a reconciliation of OIBDA to Operating Income, see Non-GAAP Financial Measures beginning on slide 42. 8

9 Audience Performance Overview Bulgaria Czech Republic Q Q Q Q Q Q Q Q Q Q Romania Slovakia Q Q Q Q Q Q Q Q Q Q Prime Time Audience Share All Day Audience Share Sources: GARB (Bulgaria), ATO Nielsen Admosphere; Mediaresearch (Czech Republic), Kantar Media (Romania), PMT/ TNS SK (Slovakia), all shares in main TV sales target group. 9

10 Pro Forma Reduction of Long-term Debt and Related Obligations Improvement in operating results and expected proceeds from divestitures and warrant exercises should deliver a significant reduction in our leverage and debt service obligations. Gross long-term debt ($ millions) 1 : Debt service obligations ($ millions): 1,200 $1,124 $186 $ $ $70 $70 $290 $290 $705 $94 80 $45 $10 $85 $25 $10 $ $578 $578 $578 $54 $50 $42 0 March 31, 2018 Actual Pro forma for proceeds Pro forma for debt repayment from warrant exercises 2 with sale proceeds Euro Term Loan 2019 Euro Term Loan 2021 Euro Term Loan Accrued Guarantee and Commitment Fees e Interest and Guarantee Fees paid in kind Cash paid for Guarantee Fees that may be paid in kind (excluding cash payments for amounts previously paid in kind) Cash paid for interest (including mandatory cash-pay Guarantee Fees) 5 1 Based on March 31, 2018 exchange rates, excludes lease obligations million warrants outstanding as of March 31, 2018, including million warrants held by Time Warner, Inc. that were exercised on April 25, We will use the proceeds from warrant exercises and excess cash on hand to repay EUR million of debt. 3 On July 9, 2017, we agreed to sell our operations in Croatia and Slovenia, subject to obtaining regulatory approvals and other customary closing conditions. The repayment of debt with sale proceeds is expected to reduce our current borrowing cost to approximately 3.2% under new pricing grids in respect of our senior debt effective April 26, Debt service obligations in 2016 and 2017 not adjusted for discontinued operations. 5 Pro forma for debt repayment with proceeds from warrant exercises and divestitures and applicable cost of borrowing, and excludes any incremental cash generated by the business used to repay debt. Not adjusted for discontinued operations. Source: Reported figures, CME estimates 10

11 Declining Net Leverage Ratio and Debt Service Obligations $113 $110 $114 $115 $129 $104 $100 $100 Q Pro Forma $92 $77 $83 $68 $ $ $49 $ $ Q Q Q Q Q Q Q Q Q Q Q Q Q Q Annualized run-rate debt service obligations 2 Net leverage ratio 3 Q PF Q PF Q PF Warrants 4 Repricing 5 Divestitures 6 Wtd. average costs of 10.50% 10.58% 10.72% 10.72% 11.74% 9.45% 9.21% 9.21% 8.75% 7.25% 7.25% 6.00% 6.00% 5.00% 5.00% 4.06% 3.21% borrowing 1 Gross debt 1 $1,072 $1,042 $1,067 $1,073 $1,102 $1,104 $1,090 $1,088 $1,051 $1,065 $1,150.0 $1,128 $1,155 $1,123 $988 $988 $704 1 Based on published quarterly data and end of period exchange rates. Gross debt excludes lease obligations. 2 Calculated as gross debt multiplied by weighted average cost of borrowing, not adjusted for discontinued operations. 3 As defined in the reimbursement agreement with Time Warner. 4 On April 25, 2018, Time Warner exercised 100,926,996 warrants and we will apply the proceeds along with excess cash on hand, to repay EUR million of the outstanding principal balance of the 2018 Euro Term Loan. 5 On April 25, 2018, we entered into a series of amendments (which are effective April 26, 2018) that modify certain terms of our senior debt, including a reduction in the rates payable under the pricing grids. The new weighted average cost of borrowing is applicable from the beginning of May On July 9, 2017, we agreed to sell our operations in Croatia and Slovenia for EUR million, subject to obtaining regulatory approvals and other customary closing conditions, and proceeds will be used to repay debt. 11

12 Consistently High Power Ratios 2015 All Day Audience Share and Market Share 2016 All Day Audience Share and Market Share 2017 All Day Audience Share and Market Share 70% 1.4x 1.7x 2.4x 2.0x 70% 1.3x 1.8x 2.4x 2.1x 70% 1.2x 1.6x 2.1x 2.2x 60% 60% 60% 50% 50% 50% 40% 40% 40% 30% 30% 30% 20% 20% 20% 10% 10% 10% 0% 0% Bulgaria Czech Republic Romania Slovak Republic Bulgaria Czech Republic Romania Slovak Republic 0% Bulgaria Czech Republic Romania Slovak Republic Power ratio = Market share / Audience share The power ratio indicates a company s ability to convert ratings to revenue Our strong content and leadership positions enable us to generate more revenues from TV advertising. Sources: GARB (Bulgaria), ATO - Nielsen Admosphere; Mediaresearch (Czech Republic), Kantar Media (Romania) and PMT / TNS SK (Slovak Republic) for audience share; CME estimates for market share. 12

13 Increasing Carriage Fees and Subscription Revenues Year ended Constant Exchange Rates (Lfl) 1 Actual Exchange Rates (US$ m) (US$ m) Bulgaria Czech Rep. Romania Slovak Rep Bulgaria Czech Rep. Romania Slovak Rep Total: US$ Total: US$ Total: US$ Total: US$ Total: US$ Total: US$ Total: US$ Total: US$ Total: US$ Total: US$ Like-for-Like currency variance reflects the impact of applying the current period average exchange rates to the prior period revenues. In 2017, carriage fees and subscription revenues represented 25% of total segment net revenues in Bulgaria and 23% in Romania. From January 2017 our channels in Slovakia have been available exclusively on cable, satellite and IPTV platforms. Remaining future growth in consolidated carriage fees and subscription revenues is expected to come from contract renewals and growth in subscribers. Increases in carriage fees and subscription revenues reflects the appeal of our channels. 13

14 Questions and Answers Questions and Answers 14

15 What are the macro-economic trends? Real GDP Year-on-Year Change, % CME 2018F Average: 4.1% Total TV Ad Market (nominal) Year-on-Year Change, % CME 2017E Average: 6.2% YTD 2018 Source: Eurostat, CME forecast based on market consensus mainly from Erste, JPM, Deutsche Bank, The Economist, Citi, OECD, IMF, Unicredit, European Commission, Raiffeisen Bank YTD Source: CME internal estimates at constant currency exchange rates Real Private Consumtion Year-on-Year Change, % CME 2018F Average: 4.6% Consumer Price Index Average Year-on-Year Change, % CME 2018F Average: 2.8% YTD Source: Eurostat, CME forecast based on market consensus mainly from The Economist, OECD, Unicredit, Eurostat. Note: Consensus analyst forecast and estimates are subject to change and comparative data may differ from those previously published. * Romania market excludes Moldova YTD 2018 Source National Statistical Offices. Bulgaria Czech Republic Romania* Slovak Republic CME Total 15

16 What are CME's leading programs? Bulgaria Czech Republic 45% 43% 37% 38% 36% 36% 31% 21% 20% 23% 24% 25% 10% 14% 16% 11% The Voice Dear Heirs Home Main News Makeover Romania Second The Street Survivor Main News Chances Slovakia 48% 34% 34% 27% 29% 22% 31% 32% 15% 15% 16% 17% 14% 16% 21% 7% Got Talent The Farm Las Fierbinti Main News In the Middle Dear Daddies Neighbours of Nowhere Main News CME 2018 Q1 actual audience share Competition 2018 Q1 actual audience share for the same time slot Data Source: Local TV data providers; All audience shares in channel's main sales target group. 16

17 What is your multichannel philosophy? BG CZ RO SK Main general entertainment TV channels 5 Other thematic TV channels

18 What is the leading advertising medium in your markets? Split of advertising expenditure among different media in CME markets 100% 16% 16% 17% 19% 18% 17% 17% 16% 15% 15% 13% 13% 80% 60% 29% 26% 24% 21% 19% 18% 17% 16% 7% 7% 9% 12% 12% 14% 17% 6% 14% 13% 18% 19% 12% 11% 19% 20% 40% 20% 49% 51% 52% 51% 51% 53% 52% 51% 53% 53% 56% 56% 39% 38% 38% 39% 40% 40% 40% 40% 40% 39% 39% 39% 0% TV Internet Print Other % TV as percentage of total advertising in the Developed Markets Source: Group M, December The Developed Markets are a combined group of 11 countries from within the European Union, predominantly in Western Europe, and the United States. TV continues to have the broadest reach and capture the highest share of advertising budgets in our markets. 18

19 What is the convergence potential of CME s markets? 2017 Total ad spend per capita and ad intensity US$ % 400 $ Ad intensity 0.38% 0.37% 0.34% 0.17% 0.30% 100 $77.4 $65.5 $39.9 $26.8 $ Czech Republic Slovak Republic Bulgaria Romania CME average Developed markets average Ad intensity is the ratio of total ad spend to GDP. Source: IMF, Group M December 2017 and CME estimates. Mix of advertised products CME markets Developed Markets Premium 40% 64% Basic 58% 32% Other 2% 4% Source: CME estimates, Group M The Developed Markets are a combined group of 11 countries from within the European Union, predominantly in Western Europe, and the United States. A shift toward more advertising of premium products would help drive convergence. 19

20 What is the convergence potential of CME s markets? (cont'd) Nominal GDP per capita US$ CME markets 13,401 12,645 12,003 11,308 10,821 10,476 10,177 9,706 9,392 9,644 Growth rate 6% 5% 6% 5% 3% 3% 5% 3% (3)% 13% Developed Markets 47,976 46,528 45,525 44,152 42,822 41,987 41,142 40,087 38,987 40,299 Growth rate 3% 2% 3% 3% 2% 2% 3% 3% (3)% 1% Source: IMF, CME estimates Ratio of nominal GDP at PPP per capita CME markets as a % of Developed Markets 54% 53% 51% 50% 49% 49% 48% 48% 48% 48% Source: IMF, CME estimates Total advertising spend per capita CME markets Growth rate 7% 13% 6% 7% (6)% (5)% 0% (5)% (27)% 14% Developed Markets Growth rate 2% 3% 2% 3% 1% 1% 1% 1% (9)% (3)% Source: CME estimates, Group M, IMF Ad intensity CME markets 0.30% 0.29% 0.28% 0.28% 0.27% 0.29% 0.32% 0.33% 0.36% 0.48% Developed Markets 0.78% 0.80% 0.79% 0.80% 0.81% 0.82% 0.83% 0.84% 0.85% 0.90% Source: IMF, CME estimates The Developed Markets are a combined group of 11 countries from within the European Union, predominantly in Western Europe, and the United States. Growth in CME markets is again outpacing the Developed Markets. 20

21 How was linear television distributed in CME s markets in Q1 2018? Households 1 2 Q Penetration DTT DTH Cable IPTV Bulgaria 2.9 million 8% 41% 40% 11% Czech Republic 4.3 million 53% 21% 19% 7% Romania 7.0 million 1% 3 23% 76% 0% Slovak Republic 1.7 million 9% 45% 26% 20% 1 Sources: National Statistical Institute, GARB (Bulgaria), Nielsen Admosphere (Czech Republic), Kantar Media Audiences (Romania) and TNS (Slovak Republic). 2 Sources: CME estimates for the penetration of the primary source of viewing of TV households for 2017 based on country data available. 3 Refers to analogue terrestrial since the transition to DTT is not complete. Consumption of linear television from DTH, Cable and IPTV platforms in Slovakia has increased since early

22 Segment Review 22

23 Czech Republic: Segment Results US$ m Q Q % Act % Lfl¹ TV ad market & Audience Performance 80% TV advertising revenues % 5.5% 60% Carriage fees & subscription revenue % 21.2% 40% Other revenues % 4.8% 20% Q Q Q Q Q Net revenues % 6.5% TV Ad Market Share Prime Time Audience Share Costs charged in arriving at OIBDA % 2.7% OIBDA % 16.6% 8% 6% All Day Audience Share Total TV Ad Market Year-on-Year Change 6% 6% OIBDA Margin 27.2% 29.8% 2.6p.p. 2.6p.p. ¹ Like for-like currency variance reflects the impact of applying the current period average exchange rates to the prior period revenues and costs. Sources: Audience share, ATO - Nielsen Admosphere; Mediaresearch (all audience share data is for the target group). TV ad market and TV ad market share represents CME s internal estimates at constant currency exchange rates. 4% 2% 0% Q Q

24 Channel Portfolio Czech Republic Category / genre Main channel Secondary channel General cinema Series Male oriented Retro entertainment Sport Content type General entertainment General entertainment Foreign movies / series Foreign series Local library Sport events Core target All All, slight female skewing All males 45+ Male 2017 AD PT % 27.9% 3.0% 2.6% 6.4% 5.7% 2.8% 2.5% 0.9% 0.8% N/A-carriage fee driven Distribution DTT, Cable, IPTV, DTH DTT, Cable, IPTV, DTH DTT, Cable, IPTV, DTH DTT, Cable, IPTV, DTH DTT, Cable, IPTV, DTH Cable, IPTV, DTH Description Full-format general entertainment, flagship station geared towards mainstream audience Full-format, general entertainment, secondary channel geared towards younger, more urban audience Cinema channel with library blockbuster, classics and other library movie and series titles Male-oriented series channel Retro channel for older target groups Pay sports channel, carriage agreements with all of the largest carriers in the Czech Republic and Slovakia Defining brands Source: ATO Nielsen Admosphere; Mediaresearch 24

25 Romania: Segment Results US$ m Q Q % Act % Lfl¹ TV ad market & Audience Performance TV advertising revenues % 6.1 % 70% 50% Carriage fees & subscription revenue % 5.0 % 30% % Other revenues (7.0)% (17.1)% Q Q Q Q Q TV Ad Market Share Net revenues % 5.4% Prime Time Audience Share Costs charged in arriving at OIBDA % (1.3)% OIBDA % 16.7 % 40% 30% 32% All Day Audience Share Total TV Ad Market Year-on-Year Change OIBDA Margin 37.1% 41.1% 4.0 p.p. 4.0 p.p. ¹ Like for-like currency variance reflects the impact of applying the current period average exchange rates to the prior period revenues and costs. Sources: Audience share, Kantar Media (all audience share and leadership data is for the Urban target group).tv ad market share represents CME s internal estimates at constant currency exchange rates. 20% 10% 0% 11% Q Q

26 Channel Portfolio Romania Category / genre Main channel Romance General cinema Male entertainment Music / lifestyle Romance Content type General entertainment Telenovelas Foreign movies Sport news Foreign series Music / series Classic telenovelas Core target Urban Urban Urban Urban Urban Urban 2017 AD Urban* 2017 PT Urban* 23.3% 27.0% 1.6% 1.3% 1.5% 1.1% 0.6% 0.6% 0.0% 0.0% 0.4% 0.3% Distribution Cable, DTH, IPTV Cable, DTH, IPTV Cable, DTH, IPTV Cable, DTH, IPTV Cable, DTH, IPTV Cable, DTH, IPTV Description Full-format, general entertainment, flagship station targeting active urban audience Female-oriented channel with Turkish series, Indian series and Latin American novelas. Cinema channel with library classics and other library movie and series Male-oriented sport and entertainment channel Music channel broadcasting music, urban culture, R&E and inter music events Female-oriented channel broadcasting classic telenovelas and local library Defining brands * Source: Kantar Media 26

27 Slovak Republic: Segment Results US$ m Q Q % Act % Lfl¹ 75% TV ad market & Audience Performance TV advertising revenues % 7.5 % 55% Carriage fees & subscription revenue % 28.8 % 35% 15% Other revenues % (7.1)% Q Q Q Q Q TV Ad Market Share Net revenues % 8.6 % Prime Time Audience Share Costs charged in arriving at OIBDA % 7.8 % OIBDA % 27.2 % OIBDA Margin 4.1% 4.8% 0.7 p.p. 0.7 p.p. ¹ Like for-like currency variance reflects the impact of applying the current period average exchange rates to the prior period revenues and costs. 2 Number is not meaningful. Sources: Audience share, PMT / TNS SK (all audience share and leadership data is for the target group). TV ad market share represents CME s internal estimates at constant currency exchange rates. 16% 12% 8% 4% 0% -4% -8% (4)% All Day Audience Share Total TV Ad Market Year-on-Year Change 12% Q Q

28 Channel Portfolio Slovakia Category / genre Main channel Romance / Relax / Emotions Action / Adrenalin Content type General entertainment Foreign movies / series, archive local fiction series Foreign movies / series Sport events Core target All Female Male AD 12-54* 2017 PT 12-54* 19.5% 20.3% 3.7% 4.1% 3.8% 3.9% Distribution Cable, IPTV, DTH Cable, IPTV, DTH Cable, IPTV, DTH Description Full-format, general entertainment, flagship station geared towards mainstream audience Female-oriented channel built on romance, relationships and relaxation Turkish and Latin-American soap operas and romantic movies Male-oriented channel using library action and sci-fi series and sport content Defining brands * Source: PMT/ TNS SK 28

29 Bulgaria: Segment Results US$ m Q Q % Act % Lfl¹ TV ad market & Audience Performance 60% TV advertising revenues % 16.6 % Carriage fees & subscription revenue % (1.4)% 50% 40% % Other revenues % 0.0% Q Q Q Q Q TV AD Market Share Net revenues % 10.2 % Prime Time Audience Share All Day Audience Share Costs charged in arriving at OIBDA % 1.6 % 15% Total TV Ad Market Year-on-Year Change OIBDA % % 10% 10% OIBDA Margin 8.2% 15.3% 7.1 p.p. 7.1 p.p. ¹ Like for-like currency variance reflects the impact of applying the current period average exchange rates to the prior period revenues and costs. Sources: Audience share, GARB (all audience share and leadership data is for the target group). TV ad market share represents CME s internal estimates at constant currency exchange rates. 5% 0% 6% Q Q

30 Channel Portfolio Bulgaria Category / genre Main channel General cinema Comedy / family Romance Action / adrenalin Sport Content type General Movies Series, animation, movies Soap operas / series Movies / series / sports Sport events Core target All All All Female Male Male 2017 AD 18-49* 2017 PT 18-49* 31.8% 34.8% 3.1% 4.1% 3.1% 2.6% 0.5% 0.5% 3.1% 3.2% 0.3% 0.3% Distribution DTT, Cable, IPTV, DTH Cable, IPTV, DTH Cable, IPTV, DTH Cable, IPTV, DTH Cable, IPTV, DTH Cable, IPTV, DTH Description Full-format, general entertainment, flagship station geared towards mainstream audience Cinema channel with library blockbuster, classics and other library movies Family-oriented comedy channel using library sitcoms, animation and comedy films Female-oriented channel broadcasting soap operas (local and foreign) and romantic series Male-oriented channel using library action and sci-fi series and sport content Male-oriented main sport channel Defining brands * Source: GARB 30

31 Financial Review 31

32 Revenues by Segment Net Revenues US$ m Variance Q Q Actual % Lfl % 1 Bulgaria % 10.2% Czech Republic % 6.5% Romania % 5.4% Slovak Republic % 8.6% Intersegment revenues (0.3) (0.7) NM 2 NM 2 Total net revenues % 6.8% ¹ Like-for-Like currency variance reflects the impact of applying the current period average exchange rates to the prior period revenues. ² Number is not meaningful. The percentage growth figures have been derived from data included in our Form 10-Q for the period ended March 31,

33 OIBDA by Segment US$ m OIBDA Variance Q Q ¹ Like-for-Like currency variance reflects the impact of applying the current period average exchange rates to the prior period revenues. ² Number is not meaningful. The percentage growth figures have been derived from data included in our Form 10-Q for the period ended March 31, See also Non-GAAP Financial Measures beginning on slide 42. Actual % Lfl % 1 Bulgaria % % Czech Republic % 16.6 % Romania % 16.7 % Slovak Republic % 27.2 % Eliminations NM 2 NM 2 Operations sub-total % 21.3 % Central costs (6.1) (7.7) (25.8)% (4.4)% Total % 26.4 % 33

34 FY Revenues & OIBDA by Segment from Continuing Operations Total net revenues (US$ m) Three months ended, Year ended, March 31, 2017 June 30, 2017 September 30, 2017 December 31, 2017 December 31, 2017 Bulgaria Czech Republic Romania Slovak Republic Intersegment revenues (0.3) (0.4) (0.1) (0.2) (1.1) Total net revenues OIBDA & Operating income Three months ended, Year ended, (US$ m) March 31, 2017 June 30, 2017 September 30, 2017 December 31, 2017 December 31, 2017 Bulgaria Czech Republic Romania Slovak Republic Eliminations Total Operating Segments Corporate (6.1) (6.2) (7.8) (10.5) (30.6) Total OIBDA Depreciation of property, plant and equipment (6.0) (6.5) (6.9) (7.6) (27.0) Amortization of broadcast licenses and other intangibles (2.1) (2.1) (2.2) (2.2) (8.6) Operating income Please refer to our Form 10-K for the year ended December 31, 2017 for the financial statements and related notes and disclosures. 34

35 Consolidated Revenues by Type Consolidated Revenues US$ m Three months ended March 31, Variance Actual% Lfl% TV advertising revenues % 7.2 % Carriage fees & subscription revenue % 7.8 % Other revenues % (9.1)% Net revenues % 6.8 % Please refer to our Form 10-Q for the period ended March 31, 2018 for the full financial statements and related notes and disclosures. 35

36 Summary Consolidated Statements of Operations US$ m (except per share data) Three months ended March 31, Net revenues Content costs Other operating costs Depreciation and amortization Selling, general and administrative costs Operating income Interest expense (19.0) (15.0) Loss on extinguishment of debt (0.1) Non-operating income, net Provision for income taxes (2.2) (3.9) (Loss) / income from continuing operations (6.0) 6.1 (Loss) / income from discontinued operations, net of tax (5.3) 1.0 Net (loss) / income (11.3) 7.1 Net loss attributable to noncontrolling interests Net (loss) / income attributable to CME Ltd. (11.1) 7.3 Continuing operations basic (0.05) 0.01 Continuing operations diluted (0.05) 0.01 Discontinued operations basic (0.04) 0.01 Discontinued operations diluted (0.04) 0.00 Net (loss) / income attributable to CME Ltd. per share - basic (0.09) 0.02 Net (loss) / income attributable to CME Ltd. per share - diluted (0.09) 0.01 Please refer to our Form 10-Q for the period ended March 31, 2018 for the full financial statements and related notes and disclosures. 36

37 Summary Consolidated Balance Sheet US$ m As at December 31, 2017 As at March 31, 2018 Current assets Current assets held for sale Non-current assets 1, ,181.2 Total assets 1, ,649.9 Current liabilities Current liabilities held for sale Non-current liabilities 1, ,151.9 Total liabilities 1, ,369.3 Series B Convertible Redeemable Preferred Stock CME Ltd. shareholders' (deficit) / equity (5.8) 14.1 Noncontrolling interests 0.0 (0.4) Total liabilities and equity 1, ,649.9 Cash & cash equivalents Gross debt 2 (1,164.3) (1,133.2) Net debt (1,109.4) (1,058.9) 1 On July 9, 2017, we agreed to sell our Croatia and Slovenia operations, subject to obtaining regulatory approvals and other customary closing conditions. Accordingly, these operations are classified as held for sale. 2 Gross debt is the full face value of all outstanding debt and related payables. Please refer to our Form 10-Q for the period ended March 31, 2018 for the full financial statements and related notes and disclosures. 37

38 Summary Cash Flow US$ m Three months ended March 31, Net cash generated from continuing operating activities Net cash used in continuing investing activities (5.9) (4.1) Net cash used in continuing financing activities 0.0 (60.4) Net cash provided by discontinued operations Impact of exchange rate fluctuations (0.2) 2.5 Net increase in cash and cash equivalents Supplemental disclosure of cash flow information and non-cost items from continuing operations: Cash paid for interest (including mandatory cash-pay Guarantee Fees) Cash paid for income taxes, net of refunds Accretion on Series B Convertible Redeemable Preferred Stock Please refer to our Form 10-Q for the period ended March 31, 2018 for the full financial statements and related notes and disclosures. 38

39 Debt Maturity Profile and Cash Flow Maturity as at March 31, (US$ m) Maturity as at April 26, (US$ m) Euro Term Loan 2019 Euro Term Loan 2021 Euro Term Loan 1 Translated at FX rates as at March 31, Pro forma for EUR million repayment of debt using proceeds from warrant exercises and cash on hand. 3 On April 25, 2018, we entered into a series of amendments (effective April 26, 2018) which modify certain terms of our Euro Term Loans, including an extension to the maturity date of the 2019 Euro Term Loan, the 2021 Euro Term Loan and the 2021 Revolving Credit Facility. Components of free cash flow Three months ended March 31, (US$ m) Variance OIBDA Change in working capital Interest, taxes, and other (7) (7) 0 Net investment in programming Cashflow from operations Capex (6) (4) 2 Free cash flow Cash paid for interest (including mandatory cash-pay guarantee fees) Unlevered free cash flow See Non-GAAP Financial Measures beginning on slide 42. Amounts in table derived from data included in our Form 10-Q for the period ended March 31,

40 Debt Structure As at March 31, Drawn Total facility Current US$ m US$ m LC 2 m all-in rate 4 Maturity 2018 Euro Term Loan EUR % 3 May 1, Euro Term Loan EUR % 3 Nov 1, Euro Term Loan EUR % 3 April 26, Revolving Credit Facility USD 75.0 L+4.00% 5 April 26, Accrued guarantee and commitment fees 69.6 Gross debt and related payables 1,123.0 Lease Obligations 10.2 Total debt and related payables 1,133.2 Less: Unrestricted cash (74.3) Net debt 1,058.9 Weighted average borrowing cost of gross debt % ¹ Debt in currencies other than US$ are translated at FX rates as at March 31, Debt terms reflect transaction entered into April 25, ² LC: local currency. 3 Reflects rates payable under new pricing grids in a transaction effective April 26, 2018, which depend on CME's net leverage ratio as outlined in the tables below. In addition, we can achieve a further reduction of up to 50 basis points in the all-in rate if we reduce our long-term debt to less than EUR million, subject to certain adjustments in respect of specified debt repayments, on or prior to September 30, and 2019 Euro Term Loan 2021 Euro Term Loan Consolidated Net Leverage Total Rate 7.0x 6.00% < 7.0x - 6.0x 5.00% < 6.0x - 5.0x 4.25% < 5.0x - 4.0x 3.75% < 4.0x 3.25% Consolidated Net Leverage Total Rate 7.0x 6.50% < 7.0x - 6.0x 5.50% < 6.0x - 5.0x 4.75% < 5.0x - 4.0x 4.25% < 4.0x - 3.0x 3.75% < 3.0x 3.50% 4 Rates are effective from May Effective April 26, 2018, total all-in rate ranges from LIBOR+6.25% (subject to a floor of 2%) to LIBOR+3.25% (subject to a floor of 2%), depending on CME's net leverage ratio. 6 Maturity dates extended in transaction entered into April 25, Please refer to our Form 10-Q for the period ended March 31, 2018 for the full financial statements and related notes and disclosures. 40

41 Equity Structure and Outstanding Equity Instruments Total Class A shares and other instruments outstanding As at March 31, 2018 Total Class A shares and equivalents held by TWX Class A Common Shares 148,235,428 61,407,775 Convertible instruments (as converted basis): Series A Convertible Preferred Share 11,211,449 11,211,449 Series B Convertible Redeemable Preferred Shares¹ 110,175, ,175,420 Total Warrants ,573, ,926,996 Stock-based Compensation 4,862,878 Diluted Class A Common Shares 378,058, ,721,640 TWX interest in CME 75% ¹ Based on the accreted value of 200,000 shares issued and outstanding at March 31, 2018 without giving effect to additional accretion after such date. ² Generally exercisable until May 2, 2018 at an exercise price of US$1.00 per share. 3 On April 25, 2018, Time Warner exercised their warrants and the proceeds of US$ million, along with cash generated by the business, will be used to repay EUR million of debt. Pro forma as at April 25, 2018 Shares of Class A Common Stock Series A Convertible Preferred Share 1 Series B Convertible Redeemable Preferred Shares 2 Ownership % of Shares of Class A Common Stock Shares outstanding, excluding Time Warner 87,313, % 3 Time Warner 162,334, , % Total 249,648, , % 1 The single share of Series A Convertible Preferred Stock is convertible into 11,211,449 shares of Class A common stock. 2 The shares of Series B Convertible Redeemable Preferred Stock are non-voting stock, convertible at the option of Time Warner at a conversion price of $2.42, subject to customary anti-dilution provisions, and redeemable at the option of CME, subject to the conversion right of Time Warner. The accretion rate is 3.75% per annum from June 25, 2016 until June 25, If the shares are converted on June 25, 2018, and there are no further adjustments to the conversion price under the Certificate of Designation for the Series B Preferred Shares, TW Investor would be issued million shares of Class A common stock upon conversion. 3 In connection with its exercise of warrants to acquire 100,926,996 shares of Class A common stock (the Warrant Shares ), Time Warner and TW Investor issued standing proxies, pursuant to which they granted the right to vote the Warrant Shares in all matters at general meetings of the Company other than a change of control, to the independent directors of the Company. In accordance with the standing proxies, such Warrant Shares will be voted in proportion to votes cast at a general meeting of the Company, excluding such Warrant Shares. In addition to the Warrant Shares subject to the standing proxies, Time Warner owns 61,407,775 shares of Class A common stock and one share of the Series A Preferred Stock, which is entitled to one vote for each of the 11,211,449 shares of Class A common stock underlying it. The Series B Convertible Redeemable Preferred Shares are non-voting, except in certain circumstances. 41

42 Non-GAAP Financial Measures In this presentation we refer to several non-gaap financial measures, including OIBDA, OIBDA margin, free cash flow and unlevered free cash flow. We believe that each of these metrics is useful to investors for the reasons outlined below. Non-GAAP financial measures may not be comparable to similar measures reported by other companies. Non-GAAP financial measures should be evaluated in conjunction with, and are not a substitute for, US GAAP financial measures. We evaluate our consolidated results and the performance of our segments based on net revenues and OIBDA. We believe OIBDA is useful to investors because it provides a meaningful representation of our performance, as it excludes certain items that do not impact either our cash flows or the operating results of our operations. OIBDA and unlevered free cash flow are also used as components in determining management bonuses. OIBDA includes amortization and impairment of program rights and is calculated as operating income / loss before depreciation, amortization of intangible assets and impairments of assets and certain unusual or infrequent items that are not considered by our co- CEOs when evaluating our performance. From January 1, 2018, stock-based compensation and certain operating costs incurred on behalf of our segments at the corporate level have been allocated to our segments for purposes of evaluating their performance. Prior period information has been recast to conform to the current period presentation. Our key performance measure of the efficiency of our consolidated operations and our segments is OIBDA margin. We define OIBDA margin as the ratio of OIBDA to net revenues. Following a repricing of our Guarantee Fees in March 2017 and April 2018, the proportion of interest and related Guarantee Fees on our outstanding indebtedness that must be paid in cash has increased. In addition to this obligation to pay more Guarantee Fees in cash, we expect to use cash generated by the business to pay certain Guarantee Fees that were previously paid in kind. These cash payments are all reflected in free cash flow; accordingly we believe unlevered free cash flow, defined as free cash flow before cash payments for interest and Guarantee Fees, best illustrates the cash generated by our operations when comparing periods. We define free cash flow as net cash generated from continuing operating activities less purchases of property, plant and equipment, net of disposals of property, plant and equipment and excluding the cash impact of certain unusual or infrequent items that are not included in costs charged in arriving at OIBDA because they are not considered by our co-ceos when evaluating performance. For additional information regarding our business segments, see Part I, Item 1, Note 19, "Segment Data" in our Form 10-Q. 42

43 Non-GAAP Financial Measures - Reconciliation Three months ended March 31, US$ m Operating income Depreciation of property, plant and equipment Amortization of intangible assets OIBDA Three months ended March 31, US$ m Net cash generated from continuing operating activities Capex additions, net of disposals (5.9) (4.1) Free cash flow Cash paid for interest (including mandatory cash-pay Guarantee Fees) Unlevered free cash flow Please refer to our Form 10-Q for the year ended March 31, 2018 for the full financial statements and related notes and disclosures. Amounts in table derived from data included in our Form 10-Q for the period ended March 31,

44 Non - GAAP Financial Measures - Reconciliation Last Twelve Months (LTM) US$ m LTM operating (loss) / income Depreciation of property, plant and equipment Amortization of intangible assets Q Q Q Q Q Q Q Q Q (179.0) (161.0) (133.0) (97.0) Q Q Q Q Q Q Q Q Q Other items¹ (10.0) (11.8) (30.0) (30.0) Impairment charge LTM OIBDA (65.9) (48.8) (14.0) Other items reflect accruals that were subsequently reversed related to tax audits in Romania, and a fine that was later overturned in Slovenia. Since the charges recorded were not included in OIBDA, our subsequent reversal of these charges were similarly excluded from OIBDA. Please refer to our Form 10-Q for the period ended March 31, 2018 for the full financial statements and related notes and disclosures. 44

45 CME Board of Directors Independents John K. Billock Independent Director, Non-Executive Chairman of the Board and member of the Compensation Committee Member of the Board of Advisors of Simulmedia, Inc. Former Director of TRA Inc., TiVo Research and Analytics, Inc., and Juniper Content Corporation. Previous roles with Time Warner Cable and Home Box Office Parm Sandhu Independent Director, Chairman of the Corporate Governance/Nominating Committee and member of the Audit Committee Alfred W. Langer Non-executive director of Eir and Hibu Chairman of Crystal Almond Holdings Former Chief Executive Officer of Unitymedia Independent Director, Chairman of the Audit Committee and member of the Corporate Governance/Nominating Committee Former CFO of Solvadis Independent consultant in financial and organizational areas Kelli Turner Bruce Maggin Independent Director and member of the Audit Committee and member of the Compensation Committee EVP, Operations, Corporate Development and CFO at SESAC, INC. General Partner of RSL Venture Partners L.P. and former CFO of RSL Management Corporation Previous roles with Martha Stewart Living Omnimedia, Inc. and Time Warner, Inc. Independent Director, Chairman of the Compensation Committee and member of the Corporate Governance/Nominating Committee Managing Partner and Principal of the H.A.M Media Group, an international investment and advisory firm specializing in the entertainment and communications industries Non-Independents Paul T. Cappuccio Director Executive Vice President and General Counsel, Time Warner Inc. Former partner at Kirkland & Ellis Independent director of Chipotle Mexican Grill, Inc. Doug Shapiro Director EVP & Chief Strategy Officer, Turner, Inc. Former Senior Vice President, International and Corporate Strategy at Time Warner Inc. Former senior analyst at Banc of America Securities Gerhard Zeiler Director President of Turner International, Inc. Non-Executive Board member of Vonovia Former Chief Executive Officer of RTL Group Former member of the Executive Board of Bertelsmann SE & Co. 45

46 Contact Information Prague Office Kříženeckého nám. 1078/ Prague 5 Barrandov Czech Republic Mark Kobal Head of Investor Relations mark.kobal@cme.net Telephone: