Interim Report 1999 January 1-September 30, 1999 Modern Times Group MTG AB ("MTG") (Nasdaq: MTGNY, Stockholm Stock Exchange: MTG) presents its accounts for the first nine months of 1999 today, November 22, 1999. SUMMARY * Sales advanced 25%, to SEK 3,270 (2,613) million. * Operating income after depreciation and amortization rose SEK 171 million, to SEK 102 million, adjusted for exceptional items in 1998 comprising capital gains of SEK 95 million and MTG's share of earnings in Home Shopping Service (HSS) equaling SEK 19 million. * Income after financial items increased SEK 168, to SEK 75 million, after similar adjustments for exceptional items. * Distribution agreements for the free newspaper Metro were secured in Philadelphia and Santiago during the period and in Newcastle and Zurich after the period closed. * The subtitling and translation company SDI acquired subsidiaries in Israel, France, and Singapore during the period and a subsidiary in the United States after the period closed. * MTG's TV channels will benefit from the results of a vote by Danish cable-TV networks. FINANCIAL SUMMARY (SEK million) 1998 1998 1999 Full year Jan 1-Sept Jan 1-Sept 30 30 Net sales 3,904 2,613 3,270 Gross income 966 545 819 Income from corporate 45 45 -3 development Income from sales of securities50 50 - Operating income before 410 183 273 depreciation and amortization Operating income after 218 45 102 depreciation and amortization Income after financial revenue 222 21 75 and expense Net income for the period 142 -32 13 OPERATIONS Group structure Shares in MTG are traded on the Nasdaq National Market (symbol: MTGNY) and the Stockholm Stock Exchange (symbol: MTG). The MTG Group consists of six business areas: Viasat Broadcasting, Radio, Publishing, Metro International, Electronic Retailing, and Media Services. During the period, TV8 was acquired by the Viasat Broadcasting business area. In the Group structure in effect since the first quarter of 1999, the operations of Metro in Prague, Budapest, and the Netherlands are reported in the Metro International business area instead of in Publishing, as previously. During the third quarter, Publishing began distributing Metro in Malmö and Helsinki and publishing the business magazine Dolly and the lifestyle magazine Silikon. Metro International obtained contracts during the period to distribute Metro in Philadelphia and Santiago and, after the period, in Newcastle and Zurich. In the Media Services business area, the subtitling and translation company SDI acquired subsidiaries in Israel, France, and Singapore during the period and the subsidiary Gelula in the United States after the period. Consolidated Earnings for the First Nine Months of 1999 For the first nine months of 1999, net sales totaled SEK 3,270 million, compared to SEK 2,613 million for the same period in 1998, a jump of 25%. Sales continued growing robustly primarily in the Viasat Broadcasting, Radio, and Publishing business areas. Adjusted for capital gains of SEK 95 million and MTG's share of earnings in HSS of SEK 19 million, both of which were included in the figures for 1998, operating income before depreciation and amortization improved SEK 204 million year-on-year, to SEK 273 (183) million. Adjusted for capital gains of SEK 95 million and MTG's share of earnings in HSS of SEK 19 million, included in the figures for 1998, operating income after depreciation and amortization improved SEK 171 million year-on-year, to SEK 102 (45) million. The net share of earnings in associated companies ended at SEK 7 (31) million, reported in each business area. In other words, the Group's share of earnings in TV3 Estonia, TV3 Latvia, MMS, SPA, and TV4 are included in Broadcasting, the share of earnings in Radio P4 Hele Norge and Easy FM in the Baltic states in Radio, and the share of earnings in Electric Farm and everyday.com in Media Services. The 1998 figures for Electronic Retailing include MTG's participation in the earnings of HSS, totaling SEK 19 million. The shareholding in HSS was divested in the autumn of 1998, so the company did not contribute to 1999 earnings. Net financial revenues and expenses equaled SEK -27 (-24) million. Net financial items included guarantee premiums booked at SEK -5 million and a net gain of SEK 2 (0) million on the translation of financial receivables and liabilities denominated in foreign currencies. Adjusted for capital gains and the share of earnings in HSS, income after financial revenue and expense jumped SEK 168 million, to SEK 75 (21) million. ------------------------------------------------------------ Please visit http://www.bit.se for further information The following files are available for download: http://www.bit.se/bitonline/1999/11/22/19991122BIT00350/bit0001.doc http://www.bit.se/bitonline/1999/11/22/19991122BIT00350/bit0002.pdf