business review 1q13 financial results · business review & 1q13 financial results may 20, 2013...

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Business Review & 1Q13 Financial ResultsMay 20, 2013

www.dyh.com.tr

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Notice

The financial statements are reclassed for presentation purposes, the CMB format is also available through ISE

and DYH websites. The figures related to advertisement, which are not stated in financial statements are based on

management reports and may not be fully consistent with IFRS Figures, as there are adjustments in accordance

with IAS 39 and IAS 18. The market shares stated in this document are based on the estimates of various sources

which are believed to be reliable and compiled by DYH and are subject to slight revisions in one year period.

This presentation does not constitute an offer or invitation to purchase or subscription for any securities and no part

of it shall form the basis of or be relied upon in connection with any contract or commitment whatsoever.

The information contained in this document has not been independently verified. No representation or warranty

express or implied is made as to and no reliance should be placed on, the accuracy, completeness, correctness or

fairness of the information or opinions contained herein. Neither the company nor any of its affiliates, advisors or

representatives shall have any liability whatsoever (for negligence or otherwise) with respect to any loss howsoever

arising from any use by third parties of this presentation or its contents or otherwise arising in connection with it.

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Agenda

I. 1Q13 Highlights 4II. Publishing 8III. Broadcasting 13IV. Investments & Financing 21V. Outlook 25VI. Financials 27

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1Q13 Highlights

5

Advertising Market in Turkey

Turkish ad market growth was 14% in 1Q13.

Based on estimated 1Q13 figures, TV had 19% growth, while internet registered 12% yoygrowth.

TV’s share in total ad spend was 54% and internet is taking 15%.

Ad Market in Turkey

TL mn Share YoY TL mn Share YoYTV 2,517 51% 7% 680 54% 19%

Newspaper 1,024 21% -1% 226 18% 2%

Magazine 123 2% 3% 26 2% 3%

Radio 131 3% 10% 29 2% 12%

Outdoor 383 8% 6% 89 7% 17%

Cinema 56 1% -3% 17 1% 21%

Internet 740 15% 24% 182 15% 12%

Total Market 4,974 100% 7% 1,248 100% 14%

1Q13FY12 Sectors Share Share YoYFood 11% +0.1 pp 15%

Finance 11% +2.1 pp 42%

Telecom 8% -1.8 pp -7%

Media 6% -0.6 pp 5%

Cosmetics 6% +1.2 pp 44%

Construction 5% -1.4 pp -10%

Automotive 5% -1.2 pp -8%

Beverages 4% +1.3 pp 62%

Retail 4% -1.3 pp -12%

Furniture 3% -0.7 pp -6%

Other 36% +2.3 pp 23%Total 100% 14%

Ad Market by Sectors*1Q13 vs. 1Q12

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1Q13 Highlights

Consolidated revenues were up by 4%, withthe support of digital platform revenues. Advertising revenues was up by 4%; mainlyled by 9% TV ad revenue growth. Digital platform revenues were strong with46% yoy growth in subscription revenues in1Q13. Circulation revenues down by 3%, due tolower circulation. EBITDA wasTL58 mn, and EBITDA marginwas 9%. Net other operating expense was TL17 mn in1Q13, versus net other operating income ofTL138 mn in 1Q12 due mainly to Hurriyet’sasset sale. Net financial expense was TL19 mn, led byfx losses, vs. net financial income of TL36 mnin 1Q12 due to strong TL and fx gains. Net loss stood as TL28 mn due to net otheroperating expenses and financial expenses.

Consolidated Revenues FY12 (TL mn)

Doğan Yayın Holding P&L Consolidated Results(TL mn) 1Q12 1Q13 YoYConsolidated Revenues 589 612 4%

Advertising 282 293 4%Circulation 59 58 -3%

Printing 21 21 4%Subscription 64 94 46%

Other 163 146 -10%EBITDA* 58 58 0%EBITDA Margin 10% 9%

Net Profit (Loss)** 106 -28 n.m.*As calculated by DYH

54% 54%

44% 44%

2% 2%

TL589m TL612m

1Q12 1Q13

Other

Broadcasting

Publishing

7

589 612

+11 +1+30

-2 -17

1Q12 Advert. Circul. Printing Subscript. Other 1Q13

1Q13 Highlights

Newsprint prices are declining: average newsprint prices in 1Q13 was 12% lower yoy.

Despite the negative contribution of TME in 1Q13, lower costs mainly led by decline in newsprintprices and new newspaper format, led to higher publishing margins.

Broadcasting EBITDA decline is led by higher operating expenses and due to the restated higher1Q12 EBITDA figure based on the new IFRS standards.

Consolidated EBITDA was TL58 mn, while EBITDA margin 9%.

Revenue Bridge 1Q12 – 1Q13(TL mn)

EBITDA Bridge 1Q12 – 1Q13(TL mn)

yoy growth 4% -3% 4% 46% -10% 4%

58 58

+2 +1 +2

-5

1Q12 Publish. Broad. Other Elimin. 1Q13

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Publishing Segment

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Newspaper Ad Market in Turkey

Following 1% contraction in FY12, newspaper ad market increased by 2%, yoy in 1Q13.

Newspaper Advertising(yoy growth)

Newspaper Ad Market by Sectors* 1Q13 vs. 1Q12

Sectors Share Share YoYConstruction 12% +1.2 pp 14%

Retail 10% -2.9 pp -20%

Media 8% +1.6 pp 28%


Finance 7% +0.8 pp 15%

Tourism 5% +0.8 pp 21%


Communication 3% -1.5 pp -31%

Education 3% +0.4 pp 20%

Public Companies 3% +1.2 pp 84%

Other 37% -2.0 pp -3%

Total 100% 2%

811 926 1,031 1,024

222 226

-18%14%

11% -1%

3% 2%

FY09 FY10 FY11 FY12 1Q12 1Q13

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Newspaper & Magazine CirculationNewspaper Circulation in 1Q13*

(000 copies daily)Total Magazine Circulation in 1Q13

(Units m & yoy growth)

Average daily newspaper circulation in the marketwas 5.1 mn in 1Q13, up by 9% yoy; mainly led byhigher free copies in the market and new entries. DYH’s circulation share (1.1 mn) in 1Q13 was 22%.

Source: Basin –İlan Source: DPP & Dogan Burda Dergi Yay.

• DYH includes Dogan Burda & Dogan Egmont

Doğan Burda and Dogan Egmont increased totalsales volume by 8%. Dogan Burda launched internationally well-known Geo in March 13 with editorial supplementGeo Saison.Doğan Burda and Doğan Egmont had a totalmarket share of 37% in 1Q13.

5.0

1.9

8%

-7%

1Q13

Market DYH

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331 336

+1 +7+0.5‐2

1Q12 Advertising Circulation Printing Other 1Q13

Publishing Segment

Domestic publishing ad revenues in linewith the Turkish ad market.

Total publishing revenues increased by 2% in1Q13.

Domestic ad revenues were up by 3%,slightly above the newspaper ad marketgrowth of 2% yoy.

Total circulation revenues came in at TL58mn, slightly below 1Q12 levels.

Printing revenues increased by 4%, whileother revenues were up by 6%.

Hurriyet’s EBITDA (excluding TME)increased from 10% to 13%; whereas TMErecorded slightly negative EBITDA of TL1 mnin 1Q13, vs. positive EBITDA of TL3 mn.

EBITDA margin was 8%, vs. 7% in 1Q12.

Net loss of TL6 mn in 1Q13, as a result ofnet other operating expenses and net financialexpenses.

Revenue Bridge 1Q13 – 1Q12 (TL mn)yoy 0% -3% 4% 6% 2%

Publishing P&L Results(TL mn) 1Q12 1Q13 YoYRevenues 331 336 2%Advertising 148 148 0%

Domestic 105 108 3%International 43 39 -8%

Circulation 59 58 -3%Printing Revenues 21 21 4%Other Revenues 103 109 6%EBITDA* 24 26 8%EBITDA Margin 7% 8%Net Profit (Loss) 152 -6 n.m.*As calculated by DYH; before intersegment eliminations

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Publishing Margins

1Q13 Cash Costs Breakdown(TL mn)

1Q13 EBITDA(TL mn)

1Q13 Revenue(TL mn)

Newsprint costs down by 12% in 1Q13, yoy: Newsprint prices in 1Q13 averaged at US$707/ton, vs.US$801/ton in 1Q12.

Lower operating expenses and newsprint costs led to a higher EBITDA for publishing segment. Overall, castcosts in 1Q13 remained intact with the levels attained in 1Q12.

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Broadcasting Segment

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TV Ad Market in Turkey

TV ad market registered 19% yoy growth in 1Q13.

Despite lower ad spend in telecom sector, increase in advertising budgets of finance, food andcosmetics sectors supported the TV ad spend.

TV Advertising(yoy growth)

TV Ad Market by Sectors 1Q13 vs. 1Q12

1,4231,998

2,349 2,517

571 680

-16%

40%

18%7%

5%19%

FY09 FY10 FY11 FY12 1Q12 1Q13

Sectors Share Share YoYFood 16% -0.7 pp 14%

Finance 12% +2.4 pp 48%

Telecom 9% -3.0 pp -10%

Cosmetics 8% +1.4 pp 44%

Media 7% -0.2 pp 15%


Cleaning Products 5% -0.1 pp 17%

Furniture 4% -1.0 pp -5%


Real Estate 3% -1.8 pp -25%

Others 27% +3.2 pp 35%

Total 100% 19%

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FTA Channels – Recent Developments

Following the National Terrestrial Frequency Tender held by Radio and Television Board on inApril 2013, Kanal D has submitted a bid of 51.2 mn TL for a HD broadcasting license for aperiod of 10 years, and Cnn Türk and tv2 have submitted total bid of 53 mn TL for an SDlicencese, and they were granted the preliminary rights for licenses, and the tender has beenapproved by RTÜK on April 24, 2013.

The Group and Turner have agreed to terminate their joint ventureagreement in June 2012 on “TNT” and Dogan TV Holding furtherraised its stake in TNT by 19.98% to 95%. “TNT” was replaced withthe name “Tv2”.

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Audience Share

TNS started to disclose TV ratings in September 17, 2012 with a different sample universe.Kanal D maintains its leading position in Total Day (total individual).

Kanal D & other channels – Total Day Audience Share (%)Audience Share Jan 1-Mar 31 2013 (%)

Source: TNS (Total Individual) * Total day, total audience.

Audience Share Total Day

Kanal D 11.8

ATV 10.9

Star TV 10.2

Fox 7.8

Show TV 6.0

Others 53.3

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Digital Platform

Attractive demographics and viewing trends

Young population in Turkey and increasing number of households.

Average daily TV viewing time above 4 hours in Turkey.

D-Smart will benefit from the attractive demographics and viewing trends:

35 HD Channels currently, exclusive sports content including Champions League,UEFA League, NBA, Formula 1, Moto GP.

D-Smart BLU, launched in 2012 (for HD+ devices only) has been providing accessto D-Smart content since February’13 through internet connected devices such asPCs & laptops, tablets (currently iPad), and smartphones (first iPhone in May’13 thenAndroid in June’13).

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Digital Platform

D-Smart Statistics (in thousands)

#2 pay TV operator in Turkey

Pay TV subscribers reached 903 K by 1Q 2013, up by 34%, yoy.

D-Smart Net ADSL subscribers 341 K, up by 24%.

85

270

423

607

872903

2008 2009 2010 2011 2012 1Q13

D-Smart TV Subscribers

Total Users

275

341

1Q12 1Q13

D-Smart Net Subscribers

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Broadcasting Operations

Subscription revenues up by 46% yoy.

Total broadcasting revenues increased by4% yoy, due to the rise in subscriptionrevenues.

Higher subscription revenues from D-Smartand Smile ADSL contributed positively to thebroadcasting revenues.

Broadcasting segment’s other revenues in1Q13 included sales to Star TV which became3rd party after Nov 2011.

With the revised IFRS standards, Eko TVwas excluded from 1Q12 results, but kept in1Q13 financials, as it is no longer a JV.Therefore, 1Q12 financials were restated.

EBITDA was TL31 mn, and EBITDA marginwas 11%.

Revenue Bridge 1Q12 – 1Q13 (TL mn)

Broadcasting P&L Results(TL mn) 1Q12 1Q13 YoYRevenues 263 274 4%Advertising 138 151 9%Subscription 64 94 46%Other Revenues 61 30 -52%

EBITDA* 36 31 -14%EBITDA Margin 14% 11%Net Profit (Loss) -12 -20 n.m.*As calculated by DYH; before intersegment eliminations

263 274

+13

+30

‐32

1Q12 Advertising Subscription Other 1Q13

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Broadcasting Margins

Following merger of D-Smart and Smile ADSL operations, ADSL revenues grouped under broadcastingsegment starting from Jun 2012.

Higher operating expenses, mainly due to marketing and sales expenses, and TV programming costs led toan increase in cash costs in 1Q13.

In line with the decline in other revenues, cost of trade goods sold item decreased from TL82 mn in 1Q12 toTL60 mn in 1Q13. This is mainly led by the cost of sales to Star TV.

EBITDA was TL31 mn and margin was 11%.

1Q13 Cash Costs Breakdown(TL mn)

1Q13 EBITDA*(TL mn)

1Q13 Revenue(TL mn)

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Investments & Financing

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Net Debt & Investments

* Other financial liabilities include supplier loans, leasing credits and loans related to options

FY12 1Q13 vs. FY11 FY12 1Q13 vs. FY11

Cash & Bank and Mark. Sec. 271 121 ‐55% 483 218 ‐55%

S/T Bank Borrowings 551 420 ‐24% 982 760 ‐23%

L/T Bank Borrowings 317 399 26% 564 721 28%Other Financial Liabilities* 157 31 ‐81% 280 55 ‐80%Net Debt/(Cash) 754 729 ‐3% 1,344 1,318 ‐2%

in US$ mn in TL mn

1Q13INVESTMENTS (TL mn)

Publishing Broadcasting Other TOTAL

Fixed Assets 6,648 28,762 91 35,501

Programme Rights 9,896 9,896

TOTAL 6,648 38,658 91 45,397

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The impact of Recent Disposals

Asset Disposals Market Share Impact(FY11)

Marginimprovement

Cash InflowFrom Asset Sales 1Q13‐

end (incl.interest)

Cash Inflow(remaining payments)

Publishing

Hurriyet Asset Sale*Broadcasting

Retail

Pre‐Disposal:DYH Circulation Share: 29.8%DYH Audience Share*: 27.3%

Post‐Disposal: DYH Circulation Share: 24.4%DYH Audience Share*: 19.8%

(*) Prime Time – All day, total individuals (Star TV & Kanal D)

3‐4% EBITDAmargin

improvement based on restated figures

375 mn $ 280 mn $

Net Debt will decline further with cash inflows from remaining payments of the asset sales that already took place.

in US$ mn FY12 1Q13 vs. FY12

Cash & Bank and Mark. Sec. 271 121 ‐55%Total Financial Liabilities 1,025 849 ‐17%Net Debt/(Cash) (including tax liability) 754 729 ‐3%

Exp. Cash Inflow (remaining payments) 280Expected Net Debt/(Cash) 754 449 ‐40%

Net Debt/EBITDA'12 4.16 2.48

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Review of FX Risk on Debt Management

Total Bank Debt as of 1Q13-end US$819 mn (TL1,481 mn) Within the scope of the

exercise of the “put option right” by Deutsche Bank AG: 23.1 mnregistered shares of DoğanGazetecilik A.Ş (22% of its paid in capital) held by Deutsche Bank AG have been taken over by DYH for 122.3 mn USD in Feb 2013.

Total Bank debts was US$819mn in 1Q13-end.

Bank Debt Payment Schedule*, as of 1Q13-end (US$)

12%

88%

TL FX

129208 173

16 1

291

420

2013 2014 2015 2016 2017+

S/T Bank Debt

S/T Portion of L/T Debt

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Outlook

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Outlook

Turkish ad market growth in 1Q13 estimated to be 14%, while close to double digitgrowth expected for 2013.

Target to maintain market shares and improve profitability.

Continue to focus on new growth opportunities in digital media.

Newsprint prices are on a declining trend: average newsprint prices expected to be 2-4% lower than the figures attained in FY12.

Better financial structure through cash inflows from asset sales: US$375 mn alreadyreceived and further US$280 mn is expected from remaining payments of the assetsales that already took place.

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Financials

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1Q13 Results – Key Figures

(1) EBIT: Before other operating income and expenses.

(2) EBITDA: Adjusted by net IAS 39 impact.

1Q12 1Q13 YoY 1Q12 1Q13 YoY

REVENUES 329 344 5% 589 612 4%

GROSS PROFIT 83 90 8% 148 160 8%

EBIT1 8 6 ‐27% 14 10 ‐27%

EBITDA2 32 32 0% 58 58 0%

NET FINANCIAL INCOME/(EXP.) 20 ‐11 n.m. 36 ‐19 n.m.

PROFIT BEFORE TAX 103 ‐14 n.m. 184 ‐25 n.m.

NET PROFT (After Minority) 59 ‐16 n.m. 106 ‐28 n.m.

in US$ mn in TL mn

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Revenues By Segments*

* As reported

(TL mn) 1Q12 1Q13 YoY

Publishing 331 336 2%Advertising 148 148 0%Circulation 59 58 ‐3%Printing Revenues 21 21 4%Other Revenues 103 109 6%Distribution 44 52 18%Other 59 58 ‐2%Broadcasting 263 274 4%Advertising 138 151 9%Subscription 64 94 46%Other Revenues 61 30 ‐52%Other Revenues 14 13 ‐8%Cumulative Total 609 624 2%Intersegment Eliminations (‐) ‐20 ‐11 ‐43%Total 589 612 4%

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Ad Growth by Segment

(TL mn) 1Q12 1Q13 YoYPublishing 147 146 ‐1%Hurriyet Grup excluding TME 85 87 2%TME 41 38 ‐7%Dogan Gazetecilik 20 22 7%DMG International 2 1 ‐31%Other 0 0 n.m.Interseg. Elim. (‐) ‐1 ‐2 n.m.

Broadcasting 134 147 10%

Doğan TV Radyo 132 144 8%

Kanal D Romanya 6 7 27%

Interseg. Elim. (‐) ‐4 ‐3 n.m.

Total Advertising 282 293 4%

Total Combined 286 298 4%

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Operational Results by Segments*

* As reported

(TL mn) FY11 FY12 YoY 1Q12 1Q13 YoYRevenues 2,338 2,526 8% 589 612 4%Publishing 1,415 1,456 3% 331 336 2%Broadcasting 934 1,090 17% 263 274 4%Other 85 60 ‐29% 14 13 ‐8%Intersegment Eliminations ‐97 ‐81 n.m. ‐20 ‐11 n.m.COGS 1,649 1,756 6% 441 453 3%Publishing 952 994 4% 240 242 1%Broadcasting 677 771 14% 204 207 2%Other 61 44 ‐28% 10 9 ‐9%Intersegment Eliminations ‐41 ‐53 n.m. ‐12 ‐5 n.m.Operating Expenses 605 618 2% 134 149 12%Publishing 434 407 ‐6% 92 92 0%Broadcasting 180 209 16% 41 59 44%Other 46 29 ‐37% 6 5 ‐25%Intersegment Eliminations ‐54 ‐26 n.m. ‐6 ‐7 n.m.

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Operational Results by Segments*

* As reported

(TL mn) FY11 FY12 YoY 1Q12 1Q13 YoY

EBIT 84 152 81% 14 10 ‐27%Publishing 29 55 87% ‐1 2 n.m.Broadcasting 78 110 41% 19 8 ‐56%Other ‐22 ‐12 n.m. ‐2 ‐1 n.m.Intersegment Eliminations ‐1 ‐1 n.m. ‐2 0 n.m.EBITDA 251 324 29% 58 58 0%Publishing 131 147 12% 24 26 8%Broadcasting 142 189 33% 36 31 ‐14%Other ‐20 ‐10 n.m. ‐1 0 n.m.Intersegment Eliminations ‐1 ‐1 n.m. ‐2 0 n.m.Consolidated EBIT Margin 3.6% 6.0% 2.4% 1.7%Publishing 2% 4% ‐0.2% 0.7%Broadcasting 8% 10% 7.0% 3.0%Other ‐26% ‐20% ‐12.7% ‐4.6%Consolidated EBITDA Margin 10.7% 12.8% 9.8% 9.4%Publishing 9% 10% 7.3% 7.7%Broadcasting 15% 17% 13.9% 11.4%Other ‐24% ‐17% ‐9.0% ‐2.5%

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EBITDA Reconciliation

(1) EBIT: Before other operating income and expenses.

(TL mn) 1Q12 1Q13 YoY

Operating Profit (EBIT) 14.3 10.4 ‐27%

Depreciation & Amortization (+) 43.5 46.2 6%

Programme Rights Amortization (‐) ‐10.2 ‐6.0 ‐41%

Net IAS Impact (+) 10.0 6.9 ‐31%

EBITDA 57.6 57.6 0%

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