Q2 2016 Investor Presentation
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 1995. 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: levels of television advertising spending and the rate of development of the advertising markets in the countries in which we operate; the effect of global economic uncertainty, including the United Kingdom's exit from the European Union and Eurozone instability in our markets and the extent, timing and duration of any recovery; the extent to which our liquidity constraints and debt service obligations restrict our business; 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 refinance our existing indebtedness; changes in the political and regulatory environments where we operate and in the application of relevant laws and regulations; our exposure to additional tax liabilities; and the timely renewal of broadcasting licenses and our ability to obtain additional frequencies and licenses. 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. This presentation also contains references to like-for-like, or constant currency, percentage movements ( % Lfl ). These reflect the impact of applying the current period average exchange rates to prior period revenues and costs. Given the significant movement of the currencies of our markets against the U.S. dollar, we believe that it is useful to provide percentage movements based on like-for-like as well as actual ( % Act ) percentage movements, which includes the effect of foreign exchange. Unless otherwise stated, all percentage increases or decreases in the following presentation refer to yearon-year percentage changes between the three and six months ended June 30, 2016 and 2015. 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 appendix for a description of non-gaap financial measures and a reconciliation to the most directly comparable GAAP financial measures. 2
CME is a Leading Television Broadcaster in CEE CME markets in 2015 Combined population: approx. 50 m Combined TV ad market size: approx. $827m (an increase of 6% at constant rates compared to 2014) TV ad market size by geography Croatia $89m Czech Republic $273m Slovenia $60m Bulgaria $87m Slovak Republic $124m Romania $194m Source: International Monetary Fund ("IMF"), CME estimates Source: 2015 CME estimates at average 2015 exchange rates 3
Why invest in CME? Our Strategy: Leveraging popular content to maintain or increase our audience and advertising market share leadership Driving growth in advertising revenues through pricing strategies Developing additional revenue streams Optimizing content costs while safeguarding our brands and competitive strengths Maintaining a strict cost discipline by controlling other expenses Our Competitive Strengths: Market leading television presence Leading media brands Our people Strong local content production and program library 4
Leading Media Brands In 2016, btv was the most preferred brand among television stations in Bulgaria for a sixth year straight. Nova TV was the most preferred TV channel, News program, and Entertainment channel in the country. Nova TV won a Promax BDA Global Excellence Award in Promax s annual competition for excellence in promotion, marketing and design. For the last four years, TV Nova has been the most recognized brand for 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 2016, Pro TV was the best in market and preferred by almost half of the Romanian viewers in its commercial target audience. Ever since its launch, Markíza has been the most recognizable TV brand. Markíza broadcasts the most trustworthy news among the Slovak broadcasters. In 2016, POP TV and its news portal 24ur.com won the TOP Quality award in Slovenia. POP TV is the most trusted brand among all TV broadcasters in Slovenia for the seventh consecutive year. Sources: btv - "My Love Marks" national ranking, Nova TV - IPSOS, TV Nova - TNS AISA TV Brand tracking, ProTV - IMAS, Markiza - Median, PopTV - Readers Digest 5
Audience Performance Overview 55 Bulgaria 60 Croatia 50 45 40 35 30 45 40 41 42 43 43 36 39 39 39 50 40 30 20 36 33 28 26 36 34 34 29 27 27 25 10 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 60 Czech Republic 50 Romania 50 40 41 38 39 37 38 40 30 33 28 29 28 29 30 37 34 35 34 35 20 26 23 24 23 25 20 10 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 45 40 35 30 25 32 32 30 30 Slovakia 34 33 32 32 31 30 55 45 35 25 44 42 36 35 Slovenia 39 42 32 32 49 41 20 15 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 All Day Audience Share Prime Time Audience Share 6
Net Revenues Trend by Quarter Constant Exchange Rates 1 Actual Exchange Rates US$ m Q1 Q2 Q3 Q4 US$ m Q1 Q2 Q3 Q4 200 150 100 +4% +9% +12% 124 129 114 102 +3% +8% +11% 170 175 142 158 +5% +10% 112 117 102 +9% 174 +3% 190 196 200 150 100 124 141 126 129 167 193 167 175 123 131 117 Q4 2015 Q4 2014 Q4 2013 Q3 2015 Q3 2014 Q3 2013 Q2 2016 Q2 2015 Q2 2014 Q2 2013 Q1 2016 Q1 2015 Q1 2014 Q1 2013 219 216 196 50 Q4 2014 Q4 2013 Q3 2015 Q3 2014 Q3 2013 Q2 2016 Q2 2015 Q2 2014 Q2 2013 Q1 2016 Q1 2015 Q1 2014 Q1 2013 50 0 Q4 2015 0 ¹ Reflects the impact of applying the most recent quarterly period average exchange rates to the prior period revenues. 7
OIBDA Margin Trend by Quarter 40% 30% 31% 29% 20% 13% 28% 21% 25% 20% 14% 10% 0% -10% 9% (2)% 4% 7% 2% (1)% (8)% -20% (17)% -30% (27)% -40% Q1 Q2 Q3 Q4 FY 2013 2014 2015 2016 For a reconciliation of OIBDA to Operating Income, see Non-GAAP Financial Measures beginning on slide 38. 8
Last Twelve Months (LTM) OIBDA Trend by Quarter $m @ actual rates 130 110 116 122 123 129 135 95 80 39 30 3-20 (31) -70 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 For a reconciliation of OIBDA to Operating Income, see Non-GAAP Financial Measures beginning on slide 38. 9
Historically High Power Ratios 2013 All Day Audience Share and Market Share 2014 All Day Audience Share and Market Share 2015 All Day Audience Share and Market Share 100% 1.7x 2.0x 1.4x 2.3x 1.8x 2.0x 100% 100% 1.6x 2.0x 1.6x 2.3x 2.0x 2.2x 1.5x 2.0x 1.7x 2.4x 2.0x 2.2x 80% 80% 80% 60% 60% 60% 40% 40% 40% 20% 20% 20% 0% Bulgaria Croatia Czech Romania Slovak Slovenia Republic Republic 0% Bulgaria Croatia Czech Romania Slovak Slovenia Republic Republic 0% Bulgaria Croatia Czech Romania Slovak Slovenia Republic Republic Power ratio = Market share / Audience share The power ratio indicates a company s ability to convert ratings to revenue Our strong content and leadership positions enable us to generate more revenues from TV advertising Sources: TNS and GARB (Bulgaria), AGB Nielsen Media Research (Croatia), ATO - Nielsen Admosphere; Mediaresearch (Czech Republic), Kantar Media (Romania), PMT / TNS SK (Slovak Republic) and AGB Nielsen Media Research (Slovenia) for audience share; CME estimates for market share. 10
Increasing Carriage Fees and Subscription Revenues Years ended 2013-2015 Constant Exchange Rates 1 Actual Exchange Rates 50 50 46 40 38 40 40 40 (US$ m) 30 20 10 0 21 17 18 13 9 6 7 1 2 3 3 4 2 1 1 1 Bulgaria Croatia Czech Rep. Romania Slovak Rep. Slovenia (US$ m) 30 20 10 0 25 20 18 16 11 8 7 4 4 4 2 2 2 1 1 1 Bulgaria Croatia Czech Rep. Romania Slovak Rep. Slovenia 2013 Total: US$ 48.6 2014 Total: US$ 67.3 2015 Total: US$ 73.1 2013 Total: US$ 59.0 2014 Total: US$ 80.5 2015 Total: US$ 73.1 1 Reflects the impact of applying the current period average exchange rates to the prior period revenues. In 2015 carriage fees and subscription revenues represented 24% of total country net revenues in Bulgaria and 26% in Romania. Future growth in carriage fees and subscription revenues expected to come from growth in subscribers and the launch of new international channels. Increases in carriage fees and subscription revenues reflects the strength of our channels. 11
Questions and Answers 12
What are the macro-economic trends? Real GDP Year-on-Year Change, % 2016F Average: 3.0% Total TV Ad Market (nominal) Year-on-Year Change, % CME 2015 Average: 6% 6 5 4 3 2 1 0-1 -2 (1)% 4% 1% 1% (1)% (1)% 3% 3% 3% 2% 3% 0% 2013 2011 2014 2012 2015 YTD 2013 2016 2013 2011 2014 2012 20122015 2013 YTD 20132016 Source: CME internal estimates at constant currency exchange rates Source: Eurostat, 2015 CME estimates based on market consensus mainly from Erste, JPM, Deutsche Bank, The Economist, Citi, OECD, IMF, Unicredit, Eurostat, Reiffesen Bank). 5% 4% 4% 3% 3% 2% 2% 4% 3% 3% 2% 2% 25 20 15 10 5 0-5 4% -10-15 (10)% (9)% 1% (4)% (7)% 6%6% 4% (3)% (6)% 8% 4% 4% 16% (3)% 7%4% 2% 7% 20% (1)% 4% 1% Real Private Consumtion Year-on-Year Change, % 2016F Average: 3.7% Consumer Price Index Average Year-on-Year Change, % 2016F Average: (1.0)% 10 8 6 4 2 0-2 -4-6 1% 3% (1)%(1)% (4)% (2)% 2% 4% 3% 2% 1% (1)% 2013 2011 2014 2012 2015 YTD 20132016 2013 2011 2014 2012 2015 2013YTD 2016 Source: Eurostat, 2015 CME estimates based on market consensus (mainly from Erste, JPM, Deutsche Bank, The Economist, Citi, OECD, IMF, Unicredit). Note: Consensus analyst forecast and estimates are subject to change and comparative data may differ from those previously published. * Romania market excludes Moldova. 3% 6% 2% 2% 1% 1% 3% 7% 3% 2% 2% 1% Czech Republic 6 4 2 0-2 -4 1% 4% Source National Statistical Offices. Romania* 1% 1% 2% 2% 0% 1% Slovak Republic 0% (1)% 0% 0% 0% (1)% 0% 0% (1)%(1)% 0% (3)% (1)% (1)% (1)%(2)% Bulgaria Slovenia Croatia CME Total 13
What are CME's leading programs? Czech Republic Romania Slovakia 51% 44% 42% 39% 37% 38% 34% 23% 40% 37% 22% 28% 24% 22% 24% 22% 18% 28% 25% 45% 31% 30% 26% 26% Rose Garden The Street Your Face Main News Clinic 2 Sounds Familiar Las Fierbinti The Farm Got Talent Main News The Farm Your Face Chartshow Main News Sounds Familiar Bulgaria Croatia Slovenia 41% 37% 43% 39% 35% 36% 45% 39% 26% 25% 29% 29% 34% 31% 30% 30% 38% 36% 55% 56% 40% 38% 26% 18% Masterchef Got Talent Home Make Main News Over Masterchef Got Talent No Matter Main News What Best Wishes Your Face Power Couple Main News Sounds Familiar 2015 Q2 actual audience share for the same program or time slot. 2016 Q2 actual audience share for the program. Data Source: Local TV data providers; All audience shares in main channels sales target group. 14
What is your multichannel philosophy? CZ RO SK BG SLO CRO Main general entertainment TV channels 7 29 Other thematic TV channels 8 9 4 6 5 4 36 15
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% 15% 15% 14% 14% 80% 60% 32% 29% 25% 23% 22% 7% 6% 8% 10% 5% 20% 11% 19% 18% 13% 15% 16% 15% 17% 17% 40% 20% 47% 49% 51% 50% 50% 52% 53% 52% 53% 54% 0% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 TV Internet Print Other Source: Group M, December 2015. TV continues to have the broadest reach and capture the highest share of advertising budgets in our markets. 16
What is the convergence potential of CME s markets? 2015 Total ad spend per capita and ad intensity US$ 500 0.74% 400 $337.0 300 200 Ad intensity 0.39% 0.22% 0.34% 0.25% 0.33% 0.16% 0.28% 100 $67.3 $46.0 $38.7 $38.7 $21.9 $14.2 $32.8 0 Czech Republic Slovenia Croatia Slovak Republic Bulgaria Romania CME average Developed markets average Ad intensity is the ratio of total ad spend to GDP. Source: IMF, Group M December 2015 and CME estimates. Developed markets are a combined group of 11 countries from within the European Union, predominantly in Western Europe, and the United States. There is significant room for convergence in our markets 17
How is television distributed in CME s markets? Households 1 Penetration 2015 2 DTT DTH Cable IPTV Bulgaria 3.0 million 11% 41% 39% 9% Croatia 1.5 million 58% 5% 13% 24% Czech Republic 4.5 million 56% 24% 17% 3% Romania 7.1 million 2% 3 25% 73% - Slovak Republic 1.7 million 12% 48% 25% 15% Slovenia 0.7 million 16% 5% 39% 40% 1 Sources: National Statistical Institute, GARB (Bulgaria), Nielsen Admosphere (Czech Republic), AGB Nielsen (Croatia), Kantar Media Audiences (Romania), TNS (Slovak Republic) and AGB Nielsen Media Research (Slovenia). 2 Sources: CME estimates for the penetration of the primary source of viewing of TV households for 2015 based on country data available. 3 Refers to analogue terrestrial since the transition to DTT is not complete. Multichannel penetration is increasing as new technologies develop 18
Segment Review 19
Czech Republic: Q2 2016 performance Q2 2016 Financials US$ m Q2 2015 Q2 2016 % Act % Lfl¹ TV advertising revenues 48.1 46.7 (3.0)% (6.1)% Carriage fee & subscription revenues 2.0 2.6 29.9 % 25.7 % Other revenues 2.0 1.6 (19.1)% (21.4)% Net revenues 52.1 50.9 (2.3)% (5.4)% Costs charged in arriving at OIBDA 27.9 27.8 (0.3)% (3.5)% 60 50 40 30 20 10 Market Market Share Share TV Ad Market Share (CME Group) YTD 2016 TV Ad Market Share 70 Audience Performance Overview 41 37 38 39 Prime Time Audience Share All Day Audience Share 37 38 34 35 34 35 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 8 6 4 2 0 Total TV Ad Market Year-on-Year Change, % 7% 2% YTD 2015 YTD 2016 Prima Group: 27% OIBDA 24.2 23.1 (4.7)% (7.7)% 65 63% CT Group: 5% Others: 9% OIBDA Margin 46.5% 45.4% (1.1) p.p. (1.1) 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. 60 60% 60% 60% 58% Sources: Audience share, ATO - Nielsen Admosphere; Mediaresearch (all audience share data is for the 15-54 target group). TV ad market and TV ad market share represents CME s internal estimates at constant currency exchange rates. 55 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 CME Group: 59% 20
Romania: Q2 2016 performance Q2 2016 Financials US$ m Q2 2015 Q2 2016 % Act % Lfl¹ TV advertising revenues 32.9 37.8 14.8 % 14.1 % Carriage fee & subscription revenues 10.0 10.2 1.7 % 1.2 % 50 40 30 20 10 Audience Performance Overview 33 28 29 28 29 26 23 24 23 25 20 15 10 Total TV Ad Market Year-on-Year Change, % 12% 7% Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 5 Other revenues 1.1 1.0 (14.3)% (14.9)% Prime Time Audience Share 0 Net revenues 44.0 48.9 11.1 % 10.4% Costs charged in arriving at OIBDA 28.6 25.9 (9.3)% (9.9)% All Day Audience Share YTD 2015 YTD 2016 Market Share TV Ad Market Share (CME Group) YTD 2016 TV Ad Market Share 65 OIBDA 15.4 23.0 48.9 % 48.2 % OIBDA Margin 35.0% 46.9% 11.9 p.p. 11.9 p.p. 60 59% 57% 58% 60% 60% Kanal D: 9% Others: 6% Prima Group : 2% ¹ Like for-like currency variance reflects the impact of applying the current period average exchange rates to the prior period revenues and costs. 55 Intact Group: 23% Sources: Audience share, Kantar Media (all audience share and leadership data is for the 18-49 Urban target group).tv ad market share represents CME s internal estimates at constant currency exchange rates. 50 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 CME Group: 60% 21
Slovak Republic: Q2 2016 performance US$ m Q2 2016 Financials Q2 2015 Q2 2016 % Act % Lfl¹ TV advertising revenues 18.8 21.2 13.1 % 10.8 % 45 40 35 Audience Performance Overview 34 33 32 32 32 25 20 Total TV Ad Market Year-on-Year Change, % 20% Carriage fee & subscription revenues 0.4 0.6 55.3 % 52.3 % Other revenues 1.1 0.7 (32.1)% (33.5)% Net revenues 20.2 22.5 11.4 % 9.2 % Costs charged in arriving at OIBDA 16.6 19.3 16.7 % 14.5 % 30 32 31 30 30 30 25 20 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Prime Time Audience Share All Day Audience Share 15 12% 10 5 0 YTD 2015 YTD 2016 Market Share TV Ad Market Share (CME Group) YTD 2016 TV Ad Market Share 75 Other: 2% CME Group: 61% OIBDA 3.6 3.2 (12.9)% (15.1)% 70 RTVS: 4% OIBDA Margin 17.9% 14.0% (3.9) p.p. (4.0) p.p. 65 64% 62% 64% JOJ Group: 33% ¹ Like for-like currency variance reflects the impact of applying the current period average exchange rates to the prior period revenues and costs. 60 61% 59% Sources: Audience share, PMT / TNS SK (all audience share and leadership data is for the 12-54 target group). TV ad market share represents CME s internal estimates at 55 constant currency exchange rates. Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016. 22
Bulgaria: Q2 2016 performance Q2 2016 Financials US$ m Q2 2015 Q2 2016 % Act % Lfl¹ TV advertising revenues 13.9 14.7 5.9 % 3.9 % Carriage fee & subscription revenues 4.5 4.6 3.8 % 1.9 % 55 50 45 40 35 30 25 Audience Performance Overview 45 41 42 43 43 40 36 39 39 39 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 2 1 0-1 Total TV Ad Market Year-on-Year Change, % (1)% (1)% Other revenues 1.1 1.1 4.5 % 2.5 % Prime Time Audience Share -2 All Day Audience Share YTD 2015 YTD 2016 Net revenues 19.4 20.5 5.3 % 3.4 % Costs charged in arriving at OIBDA 15.4 14.5 (5.7)% (7.5)% Market Share TV Ad Market Share (CME Group) YTD 2016 TV Ad Market Share 65 Others: 5% CME Group: 56% OIBDA 4.0 6.0 47.2 % 44.8 % 60 60% BNT Group: 3% 58% OIBDA Margin 20.8% 29.1% 8.3 p.p. 8.3 p.p. 57% 57% 55 55% MTG Group: 36% 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 18-49 target group). TV ad market share represents CME s internal estimates at constant currency exchange rates. 50 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 23
Croatia: Q2 2016 performance Q2 2016 Financials US$ m Q2 2015 Q2 2016 % Act % Lfl¹ 60 50 Audience Performance Overview 2.0 Total TV Ad Market Year-on-Year Change, % TV advertising revenues 14.7 14.7 (0.1)% (3.6)% Carriage fee & subscription revenues 0.6 0.6 15.0 % 11.3 % 40 30 20 10 36 28 33 26 36 29 34 34 27 27 1.5 1.0 1% 1% Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 0.5 Other revenues 1.0 1.2 25.5 % 21.4 % Prime Time Audience Share 0.0 Net revenues 16.2 16.6 2.0 % (1.6)% Costs charged in arriving at OIBDA 11.2 12.1 7.0 % 3.2 % All Day Audience Share YTD 2015 YTD 2016 Market Share TV Ad Market Share (CME Group) YTD 2016 TV Ad Market Share 65 HTV Group: 9% OIBDA 5.0 4.5 (9.5)% (12.7)% 60 58% OIBDA Margin 30.6% 27.2% (3.4) p.p. (3.4) 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. 55 55% 56% 55% RTL Group: 38% Sources: Audience share, AGB Nielsen Media Research (all audience share and leadership data is for the 18-54 target group). TV ad market share represents CME s internal estimates at constant currency exchange rates. 50 52% Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 CME Group: 53% 24
Slovenia: Q2 2016 performance Q2 2016 Financials US$ m Q2 2015 Q2 2016 % Act % Lfl¹ TV advertising revenues 13.2 13.9 5.6% 3.6% Carriage fee & subscription revenues 1.0 1.2 20.6% 18.3% 55 45 35 25 15 Audience Performance Overview 49 44 42 42 39 41 36 35 32 32 6 5 4 3 2 Total TV Ad Market Year-on-Year Change, % 3% 4% Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 1 Other revenues 0.9 1.0 11.6% 9.6% Prime Time Audience Share 0 All Day Audience Share YTD 2015 YTD 2016 Net revenues 15.1 16.1 7.0% 4.9% Costs charged in arriving at OIBDA 14.1 14.5 2.8% 0.7% OIBDA 1.0 1.6 68.6% 66.4% OIBDA Margin 6.4% 10.1% 3.7 p.p. 3.7 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. Market Share TV Ad Market Share (CME Group) YTD 2016 TV Ad Market Share 85 Pink SI: 1% 80% Other: 2% 80 78% State TV Group: 13% 78% 75 73% Planet TV Group: 8% 70 70% 65 Sources: Audience share, AGB Nielsen Media Research (all audience share and leadership data is for 18-54 target group. TV ad market share represents CME s internal estimates at constant currency exchange rates. 60 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 CME Group: 76% 25
Financial Review 26
Q2 Revenues by Segment US$ m Q2 2015 Q2 2016 Net Revenues Variance Actual % Lfl % 1 Bulgaria 19.4 20.5 5.3 % 3.4 % Croatia 16.2 16.6 2.0 % (1.6)% Czech Republic 52.1 50.9 (2.3)% (5.4)% Romania 44.0 48.9 11.1 % 10.4% Slovak Republic 20.2 22.5 11.4 % 9.2 % Slovenia 15.1 16.1 7.0 % 4.9 % Intersegment revenues (0.3) (0.3) NM 2 NM 2 Total net revenues 166.8 175.2 5.0 % 2.8 % 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 June 30, 2016. 27
YTD Revenues by Segment US$ m H1 2015 H1 2016 Net Revenues Variance Actual % Lfl %1 Bulgaria 36.2 36.3 0.3 % 0.4 % Croatia 28.2 28.2 (0.1)% (1.6)% Czech Republic 87.1 89.5 2.8 % 0.9 % Romania 77.6 81.3 4.8 % 6.0% Slovak Republic 37.8 41.6 10.1 % 10.2 % Slovenia 26.5 27.8 4.6 % 4.5 % Intersegment revenues (0.4) (0.5) NM 2 NM 2 Total net revenues 293.0 304.2 3.8 % 3.4 % 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 June 30, 2016. 28
Q2 OIBDA by Segment OIBDA US$ m Variance Q2 2015 Q2 2016 Actual % Lfl % 1 Bulgaria 4.0 6.0 47.2 % 44.8 % Croatia 5.0 4.5 (9.5)% (12.7)% Czech Republic 24.2 23.1 (4.7)% (7.7)% Romania 15.4 23.0 48.9 % 48.2 % Slovak Republic 3.6 3.2 (12.9)% (15.1)% Slovenia 1.0 1.6 68.6 % 66.4 % Eliminations 0.0 (0.1) Nm 2 Nm 2 Operations sub-total 53.3 61.2 14.9 % 12.4 % Central costs (6.5) (7.6) (17.6)% (15.2)% Total 46.8 53.6 14.6 % 12.1 % 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 June 30, 2016. See also Non-GAAP Financial Measures beginning on slide 38. 29
YTD OIBDA by Segment OIBDA US$ m Variance H1 2015 H1 2016 Actual % Lfl %1 Bulgaria 6.2 7.0 12.5 % 12.0 % Croatia 6.8 5.9 (13.6)% (16.5)% Czech Republic 34.3 33.2 (3.4)% (6.0)% Romania 18.8 32.4 72.7 % 72.1 % Slovak Republic 3.5 5.6 59.4 % 48.8 % Slovenia 1.3 0.9 (30.8)% (32.7)% Eliminations (0.0) (0.1) Nm 2 Nm 2 Operations sub-total 71.0 84.9 19.7 % 17.1 % Central costs (12.7) (14.2) (11.7)% (11.3)% Total 58.3 70.7 21.4 % 18.4 % 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 June 30, 2016. See also Non-GAAP Financial Measures beginning on slide 38. 30
Summary Consolidated Statements of Operations Three months ended June 30, Six months ended June 30, US$ m (except per share data) 2015 2016 2015 2016 Net revenues 166.8 175.2 293.0 304.2 Content costs 73.4 77.3 144.7 149.3 Other operating costs 17.4 17.9 34.5 34.4 Depreciation and amortization 10.4 9.7 20.9 19.1 Selling, general and administrative costs 28.7 26.4 72.6 49.8 Restructuring costs 0.5 1.1 Operating income 36.4 43.9 19.2 51.7 Interest expense (41.7) (29.5) (81.9) (78.7) Loss on extinguishment of debt (150.2) (150.2) Non-operating (expense) / income, net (2.9) (0.2) (15.6) 1.2 Provision for income taxes (3.5) (5.3) (3.6) (6.0) Loss from continuing operations (11.7) (141.2) (81.9) (181.9) Income / (Loss) from discontinued operations, net of tax 2.7 (0.6) Net loss (9.0) (141.2) (82.5) (181.9) Net loss attributable to noncontrolling interests 0.3 (0.1) 0.6 0.2 Net loss attributable to CME Ltd. (8.7) (141.3) (82.0) (181.8) Net loss attributable to CME Ltd. per share (0.09) (0.98) (0.62) (1.29) Please refer to our Form 10-Q for the period ended June 30, 2016 for the full financial statements and related notes and disclosures. 31
Consolidated Revenues by Type US$ m Consolidated Revenues Three months ended June 30, Six months ended June 30, 2015 2016 2015 2016 TV advertising revenues 141.6 149.0 243.2 253.2 Carriage fees & subscription revenues 18.4 19.9 37.2 39.1 Other revenues 6.9 6.3 12.6 12.0 Net revenues 166.8 175.2 293.0 304.2 Please refer to our Form 10-Q for the period ended June 30, 2016 for the full financial statements and related notes and disclosures. 32
Summary Consolidated Balance Sheet US$ m As at As at December 31, June 30, 2015 2016 Current assets 358.3 333.4 Non-current assets 1,082.1 1,088.6 Total assets 1,440.4 1,422.0 Current liabilities 146.3 163.2 Non-current liabilities 974.3 1,110.3 Total liabilities 1,120.6 1,273.5 Series B Convertible Redeemable Preferred Stock 241.2 250.1 CME Ltd. shareholders' equity / (deficit) 77.3 (102.7) Noncontrolling interests 1.4 1.0 Total liabilities and equity 1,440.4 1,422.0 Cash & cash equivalents 61.7 46.4 Gross debt 1 (1,107.2) (1,092.9) Net debt (1,045.5) (1,046.5) ¹ 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 June 30, 2016 for the full financial statements and related notes and disclosures. 33
Summary Cash Flow US$ m Six months ended June 30, 2015 2016 Net cash generated from continuing operating activities 41.5 17.5 Net cash used in continuing investing activities (14.4) (11.3) Net cash used in continuing financing activities (27.4) (24.0) Net cash generated from discontinued operations 5.3 0.7 Impact of exchange rate fluctuations (1.3) 1.7 Net increase / (decrease) in cash and cash equivalents 3.7 (15.2) Supplemental disclosure of cash flow information: Cash paid for interest 9.3 35.7 Cash paid for guarantee fees 20.0 Interest paid in kind 43.7 22.3 Accretion on Series B Convertible Redeemable Preferred Stock 8.4 9.0 Please refer to our Form 10-Q for the period ended June 30, 2016 for the full financial statements and related notes and disclosures. 34
Debt Maturity Profile and Free Cash Flow 1,000 Maturity as at June 30, 2016 (US$ m) 1 800 600 400 521 200 278 261 0 2016 2017 2018 2019 2020 2021 1 Translated at FX rates as at June 30, 2016. 2018 Euro Term Loan 2019 Euro Term Loan 2021 Euro Term Loan Components of free cash flow Six months ended June 30, (US$ m) 2015 2016 Variance OIBDA 58 71 13 Change in working capital 7 6 (1) Interest, taxes, and other (19) (56) (37) Net investment in programming (5) (4) 1 Cashflow from operations 42 18 (24) Capex (14) (11) 3 Free cash flow 27 6 (21) Cash paid for interest 9 36 27 Cash paid for guarantee fees 20 20 Unlevered free cash flow 36 62 26 See Non-GAAP Financial Measures beginning on slide 38. Amounts in table derived from data included in our Form 10-Q for the period ended June 30, 2016. 35
Indebtedness as at June 30, 2016 As at June 30, 2016 1 Drawn Total facility Cash-pay US$ m US$ m LC 2 m rate Current all-in rate Maturity 2018 Euro Term Loan 278.4 278.4 EUR 250.8 1.71% 8.5% 2018 2019 Euro Term Loan 261.3 261.3 EUR 235.3 1.81% 8.5% 2019 2021 Euro Term Loan 520.5 520.5 EUR 468.8 5.0% 10.0% 3 2021 2021 Revolving Credit Facility 115.0 4 USD 115.0 5.0% 10.0% 5 2021 Lease Obligations 3.3 Var. Var. Var. Total debt 1,063.5 Accrued guarantee and commitment fees 29.4 Total debt and related payables 1,092.9 Less: Unrestricted cash (46.4) Net debt 1,046.5 Weighted average borrowing cost of gross debt 9.21% ¹ Debt in currencies other than US$ are translated at FX rates as at June 30, 2016. ² LC: local currency. 3 All-in rate ranges from 10.5% down to 7.0% depending on CME's net leverage ratio. 4 Facility decreases to US$ 50 million from January 1, 2018. 5 All-in rate ranges from 10.0% down to 7.0%, depending on CME's net leverage ratio. Please refer to our Form 10-Q for the period ended June 30, 2016 for the full financial statements and related notes and disclosures. 36
Equity Structure and Outstanding Equity Instruments Total Class A shares and other instruments outstanding As at June 30, 2016 Total Class A shares and other instruments held by TWX Class A Common Shares 141,454,534 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 103,206,128 103,206,128 Initial Warrant 2 30,000,000 30,000,000 Unit Warrants 2 78,940,361 70,926,996 Diluted Class A Common Shares 3 364,812,472 276,752,348 TWX interest in CME 76% ¹ Based on the accreted value of 200,000 shares issued and outstanding at June 30, 2016 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 Excludes 2.6 million unvested RSUs and 1.6 million stock options. As at July 22, 2016 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 Voting interest 3 Shares outstanding, excluding Time Warner 80,947,285 - - 56.9% 52.7% Time Warner 61,407,775 1 200,000 43.1% 47.3% Total 142,355,060 1 200,000 100% 100% 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, 2018. 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 111.1 million shares of Class A common stock upon conversion. 3 Voting interest takes into account both the shares of Class A common stock and the share of Series A Convertible Preferred Stock, which is entitled to one vote for each of the 11,211,449 shares of Class A common stock into which it is convertible. The Series B Convertible Redeemable Preferred Shares are non-voting, except in certain circumstances. 37
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 are 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 (as defined below). 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 (as defined below) are also used as a component in determining management bonuses. OIBDA includes amortization and impairment of program rights and is determined 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. Stock-based compensation and certain other items are not allocated to our segments for purposes of evaluating their performance and therefore are not included in their respective OIBDA. 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. Intersegment revenues and profits have been eliminated on consolidation. We have previously used free cash flow as a measure of the ability of our operations to generate cash. We define free cash flow as cash flows 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. Following the refinancing transaction completed in April, the amount of interest and related guarantee fees on our outstanding indebtedness that is paid in cash has increased. Since we expect to use cash generated by the business to pay more interest and related guarantee fees in cash, and these cash payments are reflected in free cash flow, we think unlevered free cash flow, defined as free cash flow before cash payments for interest and guarantee fees, better illustrates the cash generated by our operations when comparing periods. For additional information regarding our business segments, see Item 1, Note 18, "Segment Data" in our Form 10-Q. 38
Non-GAAP Financial Measures - Reconciliation US$ m Three months ended June 30, Six months ended June 30, 2015 2016 2015 2016 Operating income 36.4 43.9 19.2 51.7 Depreciation of property, plant and equipment 6.9 7.6 13.9 14.9 Amortization of intangible assets 3.4 2.1 6.9 4.2 Other items 1 18.2 OIBDA 46.8 53.6 58.3 70.7 1 Other items for the six months ended June, 2015 reflects accruals that were subsequently reversed related to tax audits then underway in Romania. Since the charges recorded were not included in OIBDA, our subsequent reversal of these charges during 2015 were similarly excluded from OIBDA. US$ m Six months ended June 30, 2015 2016 Net cash generated from continuing operating activities 41.5 17.5 Capex additions, net of disposals (14.4) (11.3) Free cash flow 27.1 6.3 Cash paid for interest 9.3 35.7 Cash paid for guarantee fees 20.0 Unlevered free cash flow 36.4 62.0 Please refer to our Form 10-Q for the year ended June 30, 2016 for the full financial statements and related notes and disclosures. 39
Non-GAAP Financial Measures - Reconciliation US$ m LTM operating (loss) / income Depreciation of property, plant and equipment Amortization of intangible assets Last Twelve Months (LTM) Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 (160.9) (133.5) (97.0) 38.3 35.7 49.5 86.4 94.6 119.6 127.0 36.0 36.0 36.1 32.8 31.8 30.7 29.7 27.9 28.2 28.9 14.1 13.7 13.1 12.3 12.6 12.9 12.5 12.3 10.8 9.5 1 Other items 6.9 6.9 12.0 30.2 23.3 (6.9) (12.0) (30.2) (30.2) Impairment charge LTM OIBDA 79.7 79.7 79.7 (31.1) 2.8 38.8 95.4 110.3 116.3 121.7 122.8 128.5 135.3 1 Other items reflects 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 during 2015 were similarly excluded from OIBDA. Please refer to our Form 10-Q for the period ended June 30, 2016 for the full financial statements and related notes and disclosures. 40
CME Board of Directors Independent Director, Non-Executive Chairman of the Board and member of the Compensation Committee Paul T. Cappuccio Director Executive Vice President and General Counsel, Time Warner Inc. Former partner at Kirkland & Ellis John K. Billock 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 Independent Director, Chairman of the Audit Committee and member of the Corporate Governance/Nominating Committee Charles R. Frank Independent Director and member of the Audit Committee Former Vice President of the European Bank for Reconstruction and Development Former Managing Director of the Structured Finance Group at GE Capital and Vice President of GE Capital Services Former CFO of Solvadis Director President of Warner Bros. France S.A. Independent consultant in financial and organizational areas Independent Director, Chairman of the Compensation Committee and member of the Corporate Governance/Nominating Committee Iris Knobloch Independent Director of Accor S.A. and member of the audit committee Former Senior Vice President of International Relations of Time Warner Inc. Alfred W. Langer Director EVP & Chief Strategy Officer, Turner, Inc. Bruce Maggin Managing Partner and Principal of the H.A.M Media Group, an international investment and advisory firm specializing in the entertainment and communications industries Former Senior Vice President, International and Corporate Strategy at Time Warner Inc. Independent Director, Chairman of the Corporate Governance/Nominating Committee and member of the Audit Committee Non-executive director of Eir and Hibu Doug Shapiro Former senior analyst at Banc of America Securities Independent Director and member of the Audit Committee and member of the Compensation Committee EVP, Operations, Corporate Development and CFO at SESAC, INC. Parm Sandhu Acting Chairman of Largo Limited Former Chief Executive Officer of Unitymedia Director President of Turner Broadcasting System Inc. Non-Executive Board member of Vonovia Kelli Turner 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. Former Chief Executive Officer of RTL Group Gerhard Zeiler Former member of the executive board of Bertelsmann AG 41
Contact Information Prague Office Kříženeckého nám. 1078/5 152 00 Prague 5 Barrandov Czech Republic www.cme.net Mark Kobal Head of Investor Relations Email: mark.kobal@cme.net Telephone: +420 242 465 576 42