| Key figures (excluding non-recurring items) |
2008 |
2007 |
| Sales growth |
16% |
12% |
| Operating costs growth |
14% |
11% |
| Operating margin |
20% |
18% |
| Operating income growth |
28% |
14% |
| Tax rate |
27% |
29% |
Sales MTG generated 16% net sales growth in 2008 to SEK 13,166 (11,351) million, with the Nordic broadcasting and Online businesses reporting healthy growth and the Emerging Markets pay-TV business continuing its rapid development. The underlying year on year growth rate, when excluding acquisitions and divestments, was 15%.
The Group’s revenue mix continued to reflect it’s diversified and balanced structure, with 43% (43%) of revenues derived from advertising sales; 38% (39%) from subscription payments; and 19% (18%) from other business-to-business and business-to-consumer sales.
Operating expenses Group operating costs were up 14% to SEK 11,219 (9,804) million, when excluding non-recurring items as the divestment of DTV Group and the goodwill impairment charge in the Online business area. The increase reflected the addition of new channels to the Group’s pay-TV offerings, the consolidation of Nova Televizia in Bulgaria, the development of the Ukrainian and Ghanaian businesses, as well as ongoing programming investments and the investments in the Group’s Online business operations.
Operating income Group operating income was up 26% to SEK 1,947 (1,547) million, when excluding associated company income, the impact of the sale of DTV Group, and the second quarter Online asset impairment charge.
Associated company income The Group’s combined equity participations, which primarily comprise the 39.4% interest in the earnings of CTC Media, contributed increased associated company income of SEK 651 (480) million.
Net interest and other financial items amounted to SEK -61 (-12) million, which included SEK -28 (-9) million of net interest expenses. The increased interest expenses primarily reflected the increase in the Group’s borrowings during the year. Other financial items comprise a write-down of the Group’s shares in Metro International S.A. of SEK 26 million.
Tax Group tax charges totalled SEK 683 (588) million, whilst paid taxes amounted to SEK 544 (262) million.
Net income and earnings per share The Group reported a more than doubling of net income to SEK 2,927 (1,428) million, and increased basic earnings per share of SEK 43.25 (20.35). Basic earnings per share excluding the SEK 1,150 million net gain from the sale of Russian DTV Group and the Online asset impairment charge amounted to SEK 26.96.
Impact of foreign currency rate fluctuations Favourable exchange rate movements positively impacted the Group’s sales growth by 2%, as most of the Group’s local operating currencies strengthened against the Swedish krona reporting currency. The Group’s equity participation in CTC Media is translated from US dollars. The principal foreign currency exposure for the Group in operating expense terms is the US dollar, in which the majority of the Group’s programming content is acquired. The Group also operates in euro-denominated currency markets or markets with a strong link to the euro currency. MTG hedges its main part of contracted outflow for programme acquisition in US dollar, sterling and Swiss franc on a forward rolling twelve-month basis, in order to reduce the impact of short-term currency translation effects on the Group’s cost base.