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Central European Media Enterprises Ltd. (CETV)
Q3 2009 Earnings Call
October 27, 2009 10:00 a.m. ET
Romana Tomasova - VP of Corporate Communications
Adrian Sarbu - CEO
Charles Frank - CFO
Ben Mogil - Thomas Weisel Partners
Murray Arenson - Janco Partners
Fred Kooij - Blue Bay
Margaret Kalvar - Harding Loevner
Laurie Davidson - Goldman Sachs
Previous Statements by CETV
» Central European Media Enterprises Ltd Q2 2009 Earnings Call Transcript
» Central European Media Enterprises Ltd Q1 2009 Earnings Call Transcript
» Central European Media Enterprises Ltd. Q4 2008 Earnings Call Transcript
After the speaker’s remarks there will be a question-and-answer period. (Operator instructions) As a reminder this conference call is being recorded today October 27, 2009. It is now my pleasure to turn the floor over to Romana Tomasova, Vice President of Corporate Communications. Ms. Tomasova, you may begin your conference.
Good morning or good afternoon to each of you, and welcome to CME's third quarter 2009 investor conference call. During this call, we will refer to presentation slides, which you can download from our website www.cetv-net.com. You can find them on our homepage at the bottom left corner.
The participants of today's call will be Adrian Sarbu and Charles Frank who will give you the formal presentation. We are also joined today by our General Counsel, Daniel Penn and Vice President Anthony [Choi] and Mark Wyllie.
Before I turn to Adrian, let me read the usual Safe Harbor statement. Our presentation today will contain forward-looking statements. For these statements, we claim the protection of the Safe Harbor contained in the US Private Securities Litigation Reform Act of 1995, and refer you to the forward-looking statements section in our Form 10-Q filed with the Securities and Exchange Commission earlier today for a list of such statements and the factors, which could cause future results to differ from those presented in this call.
During this call, we will refer to our segment financial information that is not in US GAAP, please see the appendix of the presentation for our reconciliation to US GAAP financial measures. In addition, our segment financial information that is presented in local currencies is not in US GAAP. We do not provide reconciliation to these numbers as the US GAAP amounts our expressed in US dollars in our financial statements.
Additional information on our segment data is provided in note 18 to our financial statements on page 45 of our 10-Q. And now, over to Adrian.
Good afternoon or good morning. 2009 has been the most difficult year in CME history. A year ago none of us would have believed how the markets would behave in 2009 and it was bad. GDP and advertising spend declined in our markets with any focus made at the beginning of the year. TV advertising spend was at 30% lower than in 2008 to the level of 2007 and in some countries to the level of 2006. We expected our markets to reach the bottom in the third quarter and we are there. This is a new starting point. 2009 has been a very tough year for us and inevitably our third quarter results reflect the effects of our markets.
On October 15, I gave the full-year guidance for consolidated EBITDA of $60 million to $70 million. Facing the crisis we tried to protect our main values, brand, people and our key product. We strengthened our audience share in all core markets. We increased market share in our core markets. We brought in strong partners who share our vision. We improved our liquidity by controlling operating costs, CapEx and refinancing $545.5 million of debt.
We really find CME as a vertically integrated media company. Our markets are at the bottom. We’ve learned a lot. We have been in a strong position than our competitors. And looking forward to 2010 and beyond, when our markets return to growth, we believe in our ability to outperform.
I would like you to turn to slide five of our presentation. In quarter three, the advertising spending in our core markets declined by about 30%. Traditionally, this is the weakest quarter of the year. As a response we continue to pursue the market share and we achieved an increase of up to 7% compared with last year. Despite a downturn environment, we maintained our brand strength, leadership and we started to implement a new operational model of a strong content division. In third quarter, our core market reached the bottom and we are prepared for a recovery in 2010, when our goal is to outperform the market.
Lets move to slide six. In the Czech Republic, we increased our year-on-year market share to 72%. TV Nova's outstanding prime time audience share of 47% was driven by the ongoing success of the in-house produced local series "Rose Garden Medical" and the original soap opera Ulice.
In Romania, our advertising market share increased to 56% from 54% year-on-year. Newly launched in-house produced reality show "The Farm" is the leader in its slot with an average audience share of 23%.
In Slovakia TV Markiza increased its advertising market share by 7% to 67% and recovered audience share with a successful launch of the first Czechoslovak "Superstar" delivering the spectacular audience share of around 46%. The audience share in Slovakia was also boosted by the successful launch of a new female oriented channel Doma. Doma generated 2.8% average share audience in our sales target group of women 12-54 year old.