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CME launches expansion plans
February 29, 2008, The Financial Times
Central European Media Enterprises has set out plans to double revenues and earnings over the next five years from organic growth, while also highlighting ambitions for deals in Turkey, Bulgaria, Serbia and Russia.
The US-listed broadcaster, which has operations from Croatia to Ukraine, yesterday announced a 39 per cent jump in revenues to $840m for 2007, with earnings before interest, tax, depreciation and amortisation up 46 per cent to $320m.
"We are the fastest-growing multinational broadcaster in the world," Michael Garin, the company's chief executive, told the Financial Times, pointing to an increase in its operating margin from 36 per cent to 38 per cent.
CME was "the preferred partner" in talks with the Çalik Group, which won the auction for ATV Sabah, about taking a minority stake in the Turkish broadcaster, Mr Garin said.
It might look for alliances rather than acquisitions to enter the Russian market, he said.
The group's enterprise value rose by 67 per cent to $5.4bn last year as the growth of per capita advertising spending in its markets combined with cultural change in what was once "a post-communist collection of assets operated independently of each other", Mr Garin said.
CME, chaired by cosmetics heir Ronald Lauder and 16 per cent owned by Apax Partners, raised $110m of new equity in the year from Igor Kolomoisky, the Ukrainian billionaire and coowner of the Privat banking group.
The company also renegotiated its borrowings to lower interest payments by $11m, launched three new networks, and increased its stakes in its Slovakian, Romanian and Ukrainian operations.
Mr Garin, who has two years left on his contract with CME, said that the appointment of Adrian Sarbu as chief operating officer last October had settled the question of his succession.
The former co-founder of Lorimar Telepictures said he doubted that most US media companies would enter CME's markets.
"Generally speaking, the US entertainment business is an export business. Most of these companies lack the skills and the culture to own and operate an international business," he argued.
For additional information, please contact:
Romana Tomasova
Vice President of Corporate Communications
Central European Media Enterprises
Krizeneckeho nam. 1078/5
152 00 Praha 5
Czech Republic
+420 242 465 525
romana.tomasova@cme-net.com
