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CME to Expand to New Markets in Central and Eastern Europe through Acquisitions

October 19, 2007, MediaFax

Central European Media Enterprises (CME), the leading television broadcaster in Central and Eastern Europe, announced it will look to expand through acquisitions in new markets in the region, provided there are willing sellers. Management of the Bermuda-based broadcasting company that controls stations across Central and Eastern Europe including Romania's PRO TV, made these comments at the company's Investor Day held yesterday in Bucharest.

"We have an aspiration to expand, but we cannot talk of real plans because we have to find willing sellers first. We are a willing buyer if TV stations become available for sale. There won't be any sales in the region without our knowledge or without us being contacted because our growth interest is known," stated Michael Garin, Chief Executive Officer of CME.

Garin says CME's strategy is to improve its portfolio with as many TV channels as the advertising market can absorb and regulation authorities will allow. Until a new TV opportunity arises in the region, CME will continue to implement the multi-channel strategy that has already proven successful in Romania in the other five countries where it currently has operations, the Czech Republic, Slovakia, Slovenia, Croatia and Ukraine.

"With five stations, CME boasts the most diversified multi-channel platform in Romania, and all the developments in our other markets are based on this model. We already have three channels in Ukraine and two channels each in Slovenia, Slovakia and Czech Republic."

Adrian Sarbu, CME's recently appointed Chief Operating Officer, says that the Romanian platform operates as a one-stop-shop, whereby advertisers can reach all their audience targets by using CME's TV stations exclusively.

"We will continue to develop the multi-channel strategy. This allows us to have a diversified sales strategy built around packages that cover all the needs of the advertising market. We will also implement a Media Asset Management system to support multi-platform distribution," Sarbu says.

Garin trusts the local management in its markets and relies a great deal on each market-specific expertise. The company's success across the region is attributable to its business strategy, which is based on working closely with local partners and emphasising the broadcasting of independent news and locally-produced programming. According to Sarbu, the TV stations that CME operates in Romania will increasingly focus on local content, yet carefully control their costs, as investments in local productions may turn out to be expensive.

Garin added that the new media market will be another strategic front for CME over the coming period: "New media is the future and we intend to make substantial investments in the Internet. Our goal is to become one of the top three players in this field in every country where we have a presence, using the models that already work in the West."

Sarbu believes all of CME's markets will maintain a fast growth rate over the next five years.

"I strongly believe in fast-paced growth. The financial turmoil in the U.S.A. could have caused a slowdown, but one can see the markets in our region were not affected at all."

Sarbu noted that the despite a crowded TV market in Romania, the very high rate of growth in the retail segment will induce fast-paced growth for the advertising market.

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