Central European Media Enterprises Ltd. (NASDAQ:CETV) Q3 2018 Earnings Conference Call - Final Transcript

Oct 18, 2018 • 09:00 am ET


Central European Media Enterprises Ltd. (NASDAQ:CETV) Q3 2018 Earnings Conference Call - Final Transcript


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Hello, my name is Chris, and I will be your conference operator today. At this time, I would like to welcome everyone to the Central European Media Enterprises Third Quarter 2018 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer period. (Operator Instructions) As a reminder, this conference call is being recorded today, October 18, 2018.

It is now my pleasure to turn the floor over to Mark Kobal, Head of IR at CME, who will be our moderator today. Mr. Kobal, you may begin your conference.

Mark Kobal

Thank you, Chris. Good afternoon, and good morning, everyone, and welcome to CME's third quarter 2018 earnings conference call. We issued our earnings press release earlier today, a copy of which is available on our website, cme.net, along with a brief presentation that we will refer to during this call. On the call today are Michael Del Nin and Christoph Mainusch, co-CEOs of CME; David Sturgeon, CFO; and Daniel Penn, General Counsel.

(Forward-Looking Cautionary Statements)

During this call, we will also refer to certain financial information that is not in US GAAP. A description of these non-GAAP financial measures as well as reconciliations to the most comparable GAAP measures is available on our website in the appendix to the earnings call presentation. Additional information may also be found in Note 19 to our financial statements in the Form 10-Q.

One final note, we completed the sale of our Croatia operations during the quarter and the previously announced agreement to sell our operations in Slovenia remains subject to regulatory approval. Accordingly, the Slovenia business is classified as held for sale and both businesses are presented as discontinued operations for all periods. Our discussion today covers our continuing operations in the four remaining operating segments.

I will now hand the call over to Michael and Christoph.

Michael Del Nin

Thanks, Mark, and thanks to everyone for joining us today. Almost any way you look at it, it's been a great quarter. Solid revenue growth, reflecting the strength of the advertising markets across our region and a continued emphasis on cost controls, combined to deliver our best Q3 results in over a decade. Together with the most recent progress we made on our deleveraging plans that sets us up, as expected, for a strong finish to the year.

Looking at the details, on a consolidated basis, net revenues reached $124 million for the quarter, an increase of 3% at actual rate and 4% at constant rates. With steady top-line growth and the operating leverage in business, profit growth accelerated in the quarter, as we expected. OIBDA was $34 million in Q3, an increase of 34% at actual rates and an even more impressive 36% at constant rates.

Driven by the near doubling of OIBDA margins in Bulgaria and Slovakia, overall margins expanded more than 600 basis points in the quarter compared to Q3 last year, reaching 27%. Year-to-date margins have expanded almost 300 basis points