Good morning and good afternoon, ladies and gentlemen, and thank you for holding. Welcome to the MTG First Quarter 2012 Results Conference Call. At this time, all participants are in a listen only mode. After the presentation, participants will have an opportunity to ask questions, at which time instructions for the question and answer session will be given. May I also remind you that you can find the presentation slides on the MTG's website at mtg.se.
I will now hand the call over to Hans Holger Albrecht, MTG President and CEO, who is joined on the call today by Group CFO, Matthias Simonsen. Please go ahead.
Thank you, operator, at the record level for the Q1, but earnings were not. This is because we are investing, as previously announced, in several key areas of our business. And on top, remember that Q1 is obviously a seasonally small sales period. So investments we do, of course, have a bigger impact on profitability than in other periods. And clearly as well, the year on year growth in costs was at the peak level during this Q1.
The investments are primarily focused on the Fritoby in Scandinavia and our deep operations there, where we are focused on driving up our viewing shares in order to be able to benefit from the anticipated advertising market growth as well as to react on the kind of competitive level we have seen in this market during the course of last year. We're obviously investing as well in the Nordic Pay TV operations to drive future subscriber growth. But even despite those investments, we still have amongst the highest margins in our peer groups if you talk about PayTV. On the emerging market side, we have taken viewing and advertising market shares in almost all Free TV territories, but are yet to see any trend shift change in the development of the advertising market in these countries. However, we were profitable in the Q1 and do not see any major cost increases moving forward in the emerging market side.
If you look at the emerging pay TV business, we can see that we have generated healthy sales growth and substantially increased our profits, following continued subscriber growth and reduced losses for the satellite platforms as they move towards profitability. We do have some issues to fix with the Scandinavian ratings, as it was in the last conference call as well. And obviously, we are working hard on those areas and see already some improvement. And remember, it's not the first time that we have faced an first time we have those kind of issues and we have to overcome them. It is part and embedded sometimes in our free TV business.
Overall, obviously, we are in good shape. And the bigger picture is that we are a broadly diversified group that continues to benefit from integrated operations across multiple territories. Furthermore, we have a strong balance sheet, which will allow us to invest in future organic and acquisition net growth as well as to increase shareholder returns. That's the kind of big picture. If we then move to the individual operations, and as usual, let's look first at our FreeTV Scandinavian business in more detail.
Talking about the markets first. There are no official numbers out yet, but we estimate that the Swedish and the Norwegian TV advertising markets were up between 5% 8% year on year in the Q1, and the Danish TV advertising market was down approximately 5%. Our sales were down 1% at constant exchange rates. And whilst our advertising market share was stable in Denmark, we lost some share in Sweden and more obviously in Norway. The Norwegian situation straightforward reflects the situation if it comes to the ratings.
So there's a correlation between the lower ratings and loss of advertising market share. As I said, we are working hard to correct this, but it will take some time. The Swedish situation is a bit different. Our share of yield is up year on year and quarter on quarter, so we see signs of improvements. But we were not able to capture all of the market growth in the Q1 because the annual contracts were signed later, and we are still running off lower ratings than we had in the past.
And our Danish Media House share of Ewing was slightly down year on year but up quarter on quarter, and we performed in line with the market as far as we anticipated. We have lost in annual contract prices increases in each market and spot prices are up. And obviously, the regional sales initiative in Sweden will gradually begin to positively impact over the incoming quarters our growth. Segment OpEx for the Q1 was up 13% in constant exchange rates and this followed increased programming investments in all three Scandinavian countries and the early launch of the spring schedules compared to last year. Segment operating profits were therefore substantially down for the quarter as you have seen in the figures.
If we talk about the outlook, as I said in my introduction, the cost growth in the Q1 was at peak levels. And obviously, it will be significantly lower in the Q2. We still expect full year OpEx to be up mid to high single digit percentage points. This reflects the fact that we will invest less in programming in the Q2 when the European Football Championship will impact ratings across Scandinavia, and we are no longer showing the ice hockey for championships. So you're going to find a correlation, obviously, in the second quarter between lower costs because of lack of World Championship, but obviously as well some pressure on the ratings.
Prices are up, and we continue to expect each ad market to grow by a low single digit percentage points in 2012. So much about our free TV operations. If we then move on to the Nordic Pay TV business, where you have seen revenues up 9% year on year at constant exchange rates, which is in line with the 9% growth in premium satellite subscriber, ARPU. And this is mainly based on or followed after the price increases that we did and the rising penetration of value added services. This higher than usual level of growth also included some one off effects, which on a net basis lifted revenues and positively affected the EBIT result, but only marginally.
The development in the total subscriber base was also impacted by the one off effects in Norway as one IPTV operator was acquired and another restated its subscriber base and revenues. When you exclude those factors, the trends remain the same with an increase in the virtual operator base and a decline in the satellite base in what is, again, normally, Q1, a seasonally low sales period anyway for Pay TV. The VIA Play subscriber base has continued to grow, and we have invested further by adding even more content and functions and marketing to the service. At Flat earlier, the margin was lower in Q1 as we invested in ViaPlay. As I mentioned right now, the ViaSat film rebranding, which was a big part of the Q1 and in connection with this, the launch additional HD channels.
That's obviously the following or the sports rights costs going up. But if you take it the profitable side, profits were still up slightly year on year despite those investments. So overall, pretty solid performance. If you talk about the outlook for pay TV, we see no change except that the revenue growth in Q1 was exceptional and will return to more normal levels, obviously, moving forward. Otherwise, we continue to expect the same story: satellite premium ARPU to grow by low to mid single digit percentage points the number of virtual operator subscribers to increase via play to increasingly contribute to subscriber growth segment OpEx to increase for the year due to riding sports rights costs and the addition of channels and services with a full year operating margin to return to the normal level of approximately 18%.
Turning now then to the free TV operations in the emerging markets, where there is still unfortunately no trend shift, but we have continued to take audience and market share in almost all territories. So those things we can control, I think, we have under control right now in those places. As flagged previously as well, the closure of our loss making Slovenian operations and the writing down of the Bulgarian assets did create a positive profitability impact, which more than offset the investments in the Czech Republic we did to build on Prima's significant profitable for the quarter. But we are awaiting, obviously, the finalization of the regulatory review of our announced acquisition of the L and T FreeTV business in Latvia, which we currently expect to take place during the Q2. If we take our 3 largest markets in turn, which together generated 8% year on year sales growth, let's start with the Baltics.
Again, like in Scandinavia, obviously, there are no official market statistics out yet, but we estimate that the Estonian TV advertising market was down more than 10%. The Latvian TV advertising market was down approximately 5% and the Lithuanian TV advertising market slightly up year on year. On this basis, we would have taken share, obviously, in each market since our total Baltic sales were up 2% at constant exchange rates. Our target audience shares were up year on year in Estonia and Lithuania and slightly down in Latvia. So the Penn Baltic share increased year on year to 40 point 5%, which is a good performance there.
If we talk about the outlook for the Baltix, there's really no change at this time in the outlook, and there are no official market estimates. The markets are still soft, and it's not yet clear for us that each of the market will grow again this year. As you can see from the underlying performance, we are, of course, very well positioned once it happens and will then benefit directly from the growth when it comes. We do not currently anticipate any significant increase in OpEx either this year for the Baltics. If we then move on to the Czech Republic, which had a very strong performance again, but starting with the market.
The TV advertising market is estimated to have been probably down a couple of percentage points in the Q1. But since we had this kind of year on year increase in our audience share, we were able to substantially outperform the market and grow our sales by 16% if you take constant exchange rates. The outlook for this market, again, like in the Baltics, there are no official estimates, and it's not currently clear that the Czech TV market will grow in 2012. So we're really not have a clear picture of ourselves at this time. We do, however, expect, obviously, to continue to take market share given the higher audience shares that we have generated.
And then finally to the Bulgarian base, where the TV advertising market is estimated to have been down by more than 5% in the first quarter, while our sales were down to 5% at constant exchange rates. So its estimates are right. We have taken market share there as well. We have increased our audience share, but still suffer from advertising prices down year on year. At the same time, as indicated earlier as well, obviously, we have adjusted costs in the Bulgarian market due to lower competitive pressure if it comes to programming costs.
And therefore, the outlook, pretty similar picture to the other two markets. We still do not see any signs of growth in the Bulgarian TV advertising market for this year. And we still see, to a certain degree, pricing pressure from our competitor. However, we currently expect OpEx to be down year on year for the remainder of the year as we do not see the need to increase our level of investments in Bulgaria beyond what we have already done. And then last but not least, moving to our Pay TV operations in the emerging markets, where we have another exciting quarter.
Sales were up 14% year on year at constant exchange rates following the continued year on year subscriber growth. We added a year on year net total of 91,000 satellite subscribers to our platforms in the vortex, Ukraine and Russia and almost 8,000,000 wholesale mini pay subscription for our paid channel business. Operating costs for the segment did increase following the addition of 6 new channels and we are making in the development of our satellite platforms and the recent launch of ViaPlay in Russia, but profits were still up fourfold, and we delivered a 14% margin in the quarter. Outlook for this area, we do expect continued subscriber intake in 2012 on the Stedler platforms, And we do expect continued growth in the number of MiniPay subscriptions. And we also expect improved profitability levels for the business area for the remainder of this year.
Much about the big operations and business we have. Maybe just a quick word on the other business segments where we have a few impacts. Firstly, the loss of the energy frequencies from the beginning of next year and as we have additional licenses that they received the end of 2010. We are already seeing the impact on our sales and profits, and we'll continue to do so for the rest of this year. That's one event.
Secondly, you may have seen that we have announced the sale of Bet24, but that has not been completed yet. And thirdly, we are investing more in the development of the Modern Studio Content business as it is part of our forward going strategy. All of these factors will, of course, impact our results moving forward. But to put it into context, this is a very small part of our overall group. So much about the operations.
And I now hand over to Matthias, who will give you an update on the financial side.
Thank you. The Q1 was, of course, an investment quarter, as you have heard earlier today, and this is also reflected in the cash flow for the quarter. We generated SEK 334,000,000 of cash flow from operations before changes in working capital in the quarter, and this was down compared to the year before. We reported the usual seasonal negative change in working capital due to the normal payments of key content rights as we always do during the Q1, we managed to improve the underlying change in working capital by SEK 70,000,000 compared to Q1 last year. But in spite of this, the net cash flow from operations was down year on year in the quarter.
We sold the remaining small number of Metra International shares and debentures to Kinnevik in line with the tender offer for the company, And this resulted in a small net gain of around SEK 9,000,000 for the quarter. We did not make any acquisition of shares in the quarter or even we didn't do it in last year either. And our CapEx continue to remain low at least at less than 1% of group net sales. Our total bank debt remained stable in the quarter and ended the period with a total of SEK 1,600,000,000 borrowings, SEK 583,000,000 of cash and a total of DKK 5,600,000,000 available liquid funds. Our net debt position was therefore reduced to DKK730,000,000, which is equivalent to around 0.3x trailing 12 month EBITDA, which was the same as in the end of last year.
The change in value of the option element of the CDN Group convertible, which I'm sure you know that we subscribe to during the spin off, is included in the financial items other financial items, and this noncash gain amounted to DKK 81,000,000 in the quarter. And to remind you, this number is published on our website prior to each quarterly report as we announced previously. You can follow it there. And back to the overall picture of the company, I think we remain in a strong financial position with continued low gearing levels and high annual cash conversion levels. We expect to continue to invest in the future growth and development of our businesses and to increase the shareholder returns in line with our newly introduced dividend policy.
And the primary focus moving forward is obviously to grow, which is why we'll continue to invest in new technologies, content and new territories. But we also believe that the shareholders obviously should benefit directly and consistently from our cash flow generation. And that is all for me. And back to you, Hans Werner.
Thank you, Matthias. And maybe just to sum up the key highlights before we move to the Q and A session. As you've seen, we are investing, but Q1 was the peak in terms of the year on year cost increase for the Scandinavian Free TV and Nordic Pay TV operations. 2nd, we are investing in order to drive up our ratings in Scandinavia in what continue to be growth markets. So the markets are positive for us in that respect.
Thirdly, we are also investing in our Nordic Pay TV operations but still expect a margin of approximately 18% for the year, which is amongst the highest in the peer group. Both investments are covered in the underlying strength of the operation there. We have taken viewing and net market shares in almost all of our free TV emerging market territories, so strong operational performance there and delivered both sales growth and a profit despite the fact that there has been no trend shift in the development of these advertising markets. And we still expect to deliver higher profits for 2012 than 2011 in that region. We have continued to add subscribers in our pay TV Emerging Market business and delivered 14% sales growth and margins in the Q1, so another growth element in the company.
And we also expect to deliver higher full year profits for this segment in 2012. Last but not least, obviously, we have a strong balance sheet, and we continue to review areas where we can invest in the future growth and the company, while at the same time increasing shareholder returns. So we're not giving up the traditional MTG formula that we have growth and at the same time, good profit and good returns to our shareholders. No shift in that respect. And last but not least, which is our day to day business, of course, we have to fix issues.
We have to fix the Scandinavian rating situation, and we are working hard to do so. But it's not the first time we are facing one of those issues in one of our companies. And overall, obviously, the group is in good shape. And as always, we are investing now to create long term sustainable value for the future. That concludes our comments on the results, and we will now be happy to answer your questions.
So operator, can we have the first question, please?
We will now take our first question from Stefan Nelson from SEB and SKUDA. Please go ahead.
Thank you. Hello, everybody. If you could you just explain to me the reason why you have lost market shares in Sweden given that you have improved ratings. Are you also losing coverage now or have you not been sold out? Maybe just could take us through the recent since ratings have turned a bit.
Yes. As explained, it's an impact, of course, that we have the yearly agreement signed later. And in that phase, obviously, a lot of focus from agencies and clients and everyone is on yearly agreements. So we still have a kind of hangover effect from the weak rating performance we have seen in the Q4. So it's more kind of time and delay factor rather than a kind of structural issue because I agree the ratings have been a bit more positive than in the other quarter.
Okay. So if I understand you right, you basically sold on lower assumptions than you actually delivered or?
It's a combination of both. You sold on lower assumptions and the ad hoc market is not as strong obviously in the 1st weeks. And therefore, a kind of delay in the yearly agreement slows down as well as the kind of intake on the ad hoc money.
Okay, great. I know Q1 is a special quarter. If we look forward then, I guess, could you give us a hint how much your average price increases are in the new annual agreements?
No. They are up. They're slightly up, which is all we can say for competitive reasons. However, the fact that they are up the net price is a positive sign obviously because normally, at best, they have been flattish in previous years. So that's the underlying positive momentum.
The figures out in the market you hear sometimes are gross figures. And of course, I would take them with a lot of caution in that respect.
Okay. And is there any reason going into Q2, I know I'm focusing a bit on Sweden now, but is there any reason that you won't be able to capture your audience share in market share going forward?
Yes. The I mean, the 2nd quarter will if it would be a normal quarter, there should be no reason. Unfortunately, of course, we have two effects during this Q2. One is for the first time, we don't want to show Ice Hockey World Championship, which of course has big ratings and has big sales as well and will have an impact on the comps. And obviously, the European Championship will have a certain impact as well in terms of ratings.
So the inventory, again, compared to last year, will be a bit smaller. If you take those 2 one offs into consideration, obviously, it's not a kind of normal quarter forward. There will be offset then, however, by pretty lower cost as well because you say, for example, the investment in Aisocchi.
Could you just give us some kind of indication what your assumptions are that you will lose market share versus last year due to ice hockey and football, all else equal?
No. There are too many variables in there, which is, for example, the most simple one, for example, is how far the Swedish team is coming and those kind of things. And therefore, it's really hard to forecast. I would just say, if you take it if it's normalized, yes, there should be no reason why we shouldn't cash in on the market share gain. This is a kind of 2 one off effects in 1 quarter, which will have an impact and you should be a bit cautious.
Okay, great. Then just 2 final nitty gritty questions. First on the PayTV Nordic side, you said that there were some nonrecurring gains in Q1. So you quantify that? And does this have to do with kind of refunds from the Premier League given that the deal is not as attractive anymore?
Hi, Stefan. First of all, it has nothing at all to do with any sports rights or anything like that. The second part is that we said it was a marginal impact and it's really marginal. But I think it's the 9% growth, for example, was not really 9%. It was slightly lower if we take up this effect.
So we're not going to say exactly what it was, but it was marginal impact and not related to sports.
Okay. Will you get any kind of money back from the Premier League now that the deal changed slightly?
No, we can't comment on that one at all, sorry.
Okay. And then just finally, on the PayTV East, there's I mean the earnings is up quite significantly. Are there any kind of is there any reason to say that this is some nonrecurring positive effect or is this the kind of base level going to? It's obviously not as cyclical as free to air.
This has been as usual. I think it's an underlying good performance of the PayEase business. And in particular, what we are happy, of course, is that we can see kind of positive momentum continues in Ukraine, which, of course, is a big project for us as well as the Pay Channel business. So no special effect. And the only effect we're going to see going forward, of course, is the investment into ViaPlay Russia, which again is investment but on a smaller scale, I believe.
Okay. So we're up at a higher base level in terms of earnings now versus last year?
Yes, correct.
Okay. Thank you. Thank you.
We'll take our next question from Adrien de Saint Hilaire from Exane. Please go ahead.
Hi. Yes. Good afternoon, everybody. Thanks for taking the question. Coming back on the FreeTV Scandinavian part, what is your outlook on the Swedish, Norwegian and Danish TV ad markets going into Q2 knowing that the comp base are getting a bit easier?
I mean, I know you're expecting to lose a bit of share there, but can you share with us what's your view for those TV ad markets going into
Q2? Yes. Just to recap, I think we I mean, our estimate now is for the Q1 that we have seen growth in Sweden and growth in Norway and decline in Denmark. However, as I said earlier as well, we are believing the market is going to grow going forward. And it should be the same picture in the Q2.
To what extent it's really hard to forecast for us at this stage, particularly because we had a of mixed picture. So there will be growth. Best guess maybe is low single digit percentage figure. The positive momentum or the positive signs we have seen are the price increases on the E and A agreement. The negative impact, as I said, was a kind of unclear picture when it comes to Denmark.
And based on those elements we put together, the best guess we have is single low single digit potential for growth, 2nd quarter and for the rest of the year.
Okay. And in Denmark, does the change in status of TV2, does that well, have you seen any impact on your audience, which I think you did? And also on your advertising market share? In a word, has the change in status of TV2, has it changed anything for your day to day business so far?
The Danish market has been always extremely competitive, particularly because TV2 works under different financial criteria than we do. And obviously, the change there has an impact or the change of the status of TB2 has an impact on the competitive landscape. We took the decision obviously not to follow TV2 like we do in other markets rather keep the distance to SBS. And that kind of goal has worked. So even the fact that we declined a little bit year on year, for example, on the ratings doesn't have a negative impact on the advertising side where we believe we have kept our market share versus TP2 despite their major investments.
So to sum it up, I think Denmark is not a problem for us at this stage.
All right. Now moving to pay TV in the Nordics. How sustainable is the 10 percent ARPU growth that you mentioned? I know your guidance is for low to mid single digit, but what's behind this strong ARPU growth? And shall we see again a strong low teens ARPU growth going into Q2?
Yes. As we said, the ARPA growth is one of the driving factors for growth in the Nordic base side. We anticipate and keep the kind of view that it will grow, but rather kind of mid single percentage point every year based on price and based on value added services we are selling. The price elasticity is still there. We haven't seen any kind of any major reaction or negative reaction when we increased prices like we did last time.
And we see better, better intake as well for value added services. So the mid single digit percentage figure, we feel safe. Just to recap again, the 9% sales growth, as Matthias said earlier as well, had a one off effect as well, which was a bit artificial.
Okay. And can you share with us, sorry, what was the contribution of ViaPlay to the growth of the pay TV Nordics business?
No. We for various reasons and mainly competitive reasons, we don't reveal any figures if it comes to via play. The only thing we can say obviously is that if you have a look at the product, it looks very strong. I mean, the content lineup is probably one of the best you find in Europe. The technical platform works very well.
But at the same time, remember as well, it's an investment into the future, which right now only generates more cost than revenues. But if you don't invest, in a couple of years, we will get an even bigger bill. So the project is fine. It costs money. It looks strong.
But besides that, for various reasons, we don't say more.
Okay. And then I would have two last questions. The first one is on Czech Republic. You said the market was down, but isn't that due to the fact that, well, state broadcasters have, of course, left the field? And well, did you see any boost coming from the ban of the ban, sorry, of public advertising in Czech Republic?
No. I mean the effect of the public broadcasters stopping to have advertising was a kind of gradual move. So it's not kind of one off effect you see any kind of major impact during this quarter. So we believe as a substance, the market has been soft in the Q1, most likely down. And going forward, you don't see
any kind of major impact. The strong performance only relates to the strong rating situation we have right Right. And the last question is on the subscribers in pay TV in emerging markets, which I think were well, as you said, strong year on year, but kind of slightly down quarter on quarter. At the same time, the costs are only up 5 shall we expect some reinvestments there to kind of fuel the subscriber intake engine?
I mean, if you take the picture on the principal level, obviously, if you look at the biggest investment and the most important one for us, obviously, is in Ukraine. And there you see positive momentum even in the Q1 in terms of subscribers. You see swings sometimes in subscriber intake on the basis of the business model in Russia, which is the low cost, low end model, and therefore, swings are there. So I wouldn't read too much on a quarter by quarter level always. Plus FX, again, that's for all 3 places, obviously, first quarter is a very low sales quarter and churn, slightly higher.
But so if you take Ukraine, for example, you have seen positive momentum. In terms of cost, we don't anticipate any kind of major cost increases. We just continue along the lines we have done in the past. So you're going to see more investments over time in channels, in content and technology. But it's going to be the same model like we have in Scandinavia, meaning you find the kind of normal balance and grow with the flow and invest with the growth.
So it's not a kind of investment period in that
sense. We will now take our next question from Rasmus Enberg from Handelsbank. Please go ahead.
Yes, hi. I had a couple of questions. Firstly, on your Pay TV Emerging Markets business. Is this the one big jump? Or should we continue to see improvements quarter by quarter there in regards to the earnings?
No. I mean, it's a new level you reach. Upon that level, obviously, you're going to continue the performance like previously. So there is I mean it's kind of normal to cover intake into normal investments like we had in previous years.
Okay. Regarding free TV in Scandinavia, can you first sort of I mean, as I understand it, when you talk about late signings of the annual contracts, Does that mean that your March was better than January February, firstly?
We can't go into this kind of detail level because that really goes down to operational issues and competitive issues as well. So the only thing we are saying is the reason why we despite ratings going up didn't take market share or kept the market share is due to the fact that you had a hangover from the ratios last year and the focus on the annual agreement.
Okay. And then the other question on Free TV, I mean, considering the European Championship and the loss of the order that you gave up, the ice hockey rights, should we expect free TV costs to be basically flat or down in Q2 now and then be boosted in the second half of the year? Or how do you sort of how should we think about that when we forecast?
Yes. I mean, we don't give any kind of concrete forecasts and guidance. But I mean, the way the model works is that, of course, obviously, Q1 was a peak level. Q2, on the own productions you produce, you're going to have still have those kind of own productions running. They're going to be offset, of course, as well by the cost savings we have not showing the AISOC award championship.
And therefore, 2nd quarter cost will be significantly lower. But to be more concrete at this stage is a bit risky.
Okay. All right. Good. Thank you.
Thank you, Roop.
We will now take our next question from Stefan Licht from Deutsche Bank. Please go ahead.
Hi, guys. Two questions. Firstly, if you look at sort of the swing in the Pay TV Emerging Markets business there, Can you help me understand to what extent that comes from sort of lower losses within the DTH as opposed to sort of the price better price in MiniPay?
It is a combination of volume growth on MiniPay. You see some you see probably lower losses as well in the investments we do in Ukraine. And in other places, you see a more stable situation because the recession is over there in that respect in the Baltic. So it's a combination of various factors. So it just underlines and underpins that the Payees is a very attractive business area for us going forward.
Okay. And then when it comes to Norway, I mean, you've done a lot of changes when it comes to people. And I guess it's fair to say that we should evaluate you again during the autumn when sort of the new schedule comes out. But what about sort of the opportunity to launch a 3rd channel in that market? What's the status?
What can we expect?
Yes. I think Norway is I mean, of all the 3 countries we are in, it's the most complicated one because it's a combination of the operational issues, which we are fixing. And then, of course, it's a bit of a structural issue of the 3rd channel. We are on the second point, if it comes to a new channel, we don't control the destiny alone fully. So obviously, the time frame is not completely under our control.
And therefore, at this stage, I can't say more than saying, yes, it is an issue. And if we have an opportunity, we're going to do something there.
All right. Thank you.
We will now take our next question from Bila Dagh from Danske Bank. Please go ahead.
Hi. Could you just give us a sense of the competitive landscape with regards to FreeTV Scandinavia? What is your view on the overall programming spend today? And looking beyond 2012 as to compare to the preceding years? Is the competition substantially tougher nowadays?
Yes. I think it's a good question. I think the kind of peak competitive levels are phasing out. I mean, we have new management in place at TV4. We have a new owner at TV2 in Norway, for example.
So I assume we're coming more back to normalized levels now in normal years. So Q1 this year was the most painful quarter for us because of the catch up effect compared to last year in terms of comps. The second quarter will be a bit different. But then going into the second half and next year, I think we should be absolutely back to normal days and normal levels in terms of competitive pressure and price pressure if it comes to content.
Okay. And then a follow-up and a detailed question on the OpEx program spend in Q1. And was that evenly spread out on the various markets? Or are you pinpointing certain markets beyond Q1, so to say? What should we expect in terms of focus on railings for the full year?
Without going too much detail because again, it would harm the operations, but it was more or less spread out evenly of all 3 countries.
We will now take our next question from Lisa Yang from Goldman Sachs. Please go ahead.
Hi. First question is on the OpEx in the Q1. Can you comment was there any one off in that quarter, any cost brought forward? And can you confirm that the cost of the Champions League should be spread equally over the 4 quarters this year?
There was no significant or any material one off costs were delayed or moved between quarters. And if I understand the second question right, yes, we confirm that we take the new Genesli contract spread out over 12 months
this year.
Okay. Also can you just a couple of small questions. Can you comment on your audience share trends in April? And can you let us know why you sold that 24? What was the profit and revenue last year?
And did you are you considering disposing of other areas in the business that are not really making money?
If you look at the rate of rating trends in Scandinavia, it's more or less a picture like in the Q1. So, you see the kind of positive momentum in Sweden. No one, you still have a problem in Norway and Denmark is fine. This is what we highlighted earlier as well. You will see an impact rather in the second half than the first half of this year because we are still relying on the kind of program expansion position made earlier at the end of last year.
So that's the reason. But it's not going down any further or dramatically in the main market. We talk about PAD24. We always we launched PAD24 many years ago with the anticipation that all the betting companies will go in and try to acquire SportRite. And therefore, a new competitor would enter the market and we should be ready for that.
The world has changed, the market has changed. It's obvious that betting companies don't have a intention to become content aggregator to become support. And therefore, we decided a while ago that Bet24 will become non core. And if somebody comes and offers a fair price, a good price, we would sell. That happened now.
We can't reveal for confidential reasons, of course, any kind of details of the profit of the company and other things, but it was a good price and it was now you bought the shareholders, but we decided to exit.
Okay. Maybe sorry, and last question, please. Just in Czech Republic, you mentioned that the prices were still down year on year. But I mean, your competitor, CME, also stated that they were trying to increase prices in both Bulgaria and Czech Republic. Maybe can you comment on that?
I mean, why is that different from what you're seeing?
I can only comment on things I know myself. And the way, with Bulgaria, I don't think it was the Czech market. In Bulgaria, we still have seen in the Q1 the tendency to sell out inventory for even lower prices from our competitor. And that, of course, puts price pressure on the market. From one point of time, they will have the same situation.
I can check whether they've come to a solar situation, then things are going to get more stable. But in Bulgaria, we are still probably a bit behind what happened in the Czech market. So we have seen in the Q1 market prices down. And if there changes in the future, we will be the first one to be very happy.
Okay. Thank you very much.
Thank you.
We will take our last question from Sarah Simon from Berenberg. Please go ahead. Yeah. Hi. Just a quick one.
I'm just wondering what kind of visibility you've got in terms of the ad markets and how that looks relative in terms of kind of duration forward, how that compares with where we were say 3 months ago?
Yes. I think the same. In Kienenever, you have a bit more outlook or whatever, a bit more safety to make a kind of projection, which we did with single low single digit percentage growth in the market. And Eastern Europe still remains pretty unclear and vague and influenced a lot by the macroeconomic side. So it's harder for us to get a clear picture really at this stage in Eastern Europe and therefore we are a bit more conservative and safe.
And so can you just explain why you have more visibility in Scandinavia? Is that because of these annual deals?
It's three things. It's the underlying economy, of course, is very solid. B, you don't see any impact yet from a non euro crisis. I haven't seen any kind of impact from the euro crisis. And third, you see trends like in the annual agreement, for example, where prices are going up on a modest level.
That concludes the question and answer session. I would now like to turn the call back to Hans Holger Albrecht for his closing remarks.
Thank you, operator, and thanks, everyone, for participating today and for your continued interest in MTG. We look forward to meet you or speak to you over the coming weeks months, and we will keep you obviously updated on our progress. In the meantime, thanks, and goodbye for now.
That concludes today's conference call. Thank you for your participation. You may