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DISCLAIMER This presentation (the "Presentation") has been prepared by Kino Polska TV S.A. (the "Company, KPTV ) and is for informational purposes only. Its purpose is to present selected data on Kino Polska TV S.A. Capital Group (the "Group") and its prospects for development. It may not be regarded as part of an invitation or offer to acquire securities or to make investments. This presentation does not constitute or form part of any offer or invitation to conduct other transactions in securities. The information contained in this Presentation not arising directly from the periodical reports published by companies belonging to Kino Polska TV S.A. Capital Group has not been independently verified, and therefore there is no guarantee that it is complete and fully reflect the actual state. This Presentation contains statements relating to the future. These statements contain the words such as "anticipate", "intend", "estimate", "be", "expect", "assess" and words of similar meaning. All statements, other than these relating to historical facts, contained in this Presentation, including, among others, statements regarding the Group's financial position, its business strategy, plans and objectives of the management boards for future operations (including development plans and objectives relating to the Group's products and services) are forward-looking statements. Such forward-looking statements are subject to known and unknown risks, are characterized by inherent uncertainties and are subject to other important factors that could cause those actual results or achievements of the Group's operations would be materially different from any future results, operations or achievements expressed directly or implied in these forward-looking statements. These statements are based on numerous assumptions regarding present and future business strategies of the Group and the environment in which it will be operating in the future. The statements contained herein, have been prepared solely as at the Presentation day. The Company expressly waives any duties or obligations to disseminate any updates or revisions of any statements that are contained herein, designed to reflect changes in the Company's expectations or changes in events, conditions or circumstances on which any such statement has been based, unless the applicable laws require otherwise. The Company hereby reserves that the forward-looking statements are not guarantees of future performances and that its actual financial position, business strategy, plans and objectives of the management boards for future operations may differ materially from these described or implied in such statements contained in this Presentation. Moreover, even if the financial position, business strategy, plans and objectives of management boards for future operations of the Group are consistent with the forward-looking statements in this Presentation, those results or developments may not provide any indication as to the results or events in subsequent periods. The Company undertakes no obligation to publish any updates, changes or corrections of information, data or statements contained in this Presentation, unless such an obligation is provided by applicable laws. The Group is not responsible for the results of the decisions which were taken after reading of this Presentation. The only reliable source on the financial results of Kino Polska TV S.A. Capital Group are current and periodic reports, submitted by the companies of Kino Polska TV S.A Capital Group in performing its information obligations arising under relevant Polish laws.
CONSOLIDATED FINANCIAL RESULTS 3
Our Way Forward We are now on our way to become a solid global company We have a good team in place, we will work closely to achieve our goals Our product quality is increasing. In order to achieve sustainable growth we have to conduct sales in order to achieve even greater results. 4
CONSOLIDATED FINANCIAL RESULTS KPTV S.A. consolidated financial results after acquisition of Filmbox International Ltd. we received all revenues from FilmBox movie channels distribution in Poland (before we had only a 10% margin on distribution) and revenues from foreign territories that is the why we have a higher broadcasting revenue at the consolidation stage, we eliminate the revenues from production of FilmBox movie channels that is the why we had lower revenues and costs from the channels production (the costs of FilmBox movie channels production now is presented in the other operating segments mainly in broadcasting activities) 5
CONSOLIDATED FINANCIAL RESULTS FilmBox channels vs consolidated financial results of KPTV S.A. Group before acquisition of Filmbox International Ltd. - KPTV S.A. Group was not the owner of the FilmBox movie channels - KPTV S.A. Group had only a margin on FilmBox channels distribution and on production services - KPTV S.A. Group depended on receivables from SPI 6
Free to Air / DTT (Basic Distribution) Filmbox Products CEE Premium Pay TV Global Thematic Pay TV 7
PAY TV CHANNELS & GEOGRAPHICAL PRESENCE SPI channels are currently broadcast on four continents: Europe, North America, Asia, Africa. New territories coming in the nearest future are the Balcan Countries, Russia, the Baltic Republics and South America. 8
THE MAIN CLIENTS OF KPTV S.A. CAPITAL GROUP - EXCLUDING RELATED PARTIES POLAND ROMANIA HUNGARY CZECH REPUBLIC NC+ UPC ROMANIA MAGYAR TELEKOM POLSAT CYFROWY M7 Group SLOVAKIA SLOVAK TELECOM ROMTELECOM UPC UPC CZ UPC SK UPC POLSKA DIRECT ONE UPC DIRECT TELEFONICA CZ ORANGE MULTIMEDIA POLSKA ORANGE ROMANIA PR TELECOM DIGI CZ SLOVANET VECTRA ENIA SAN INVITEL NEJ TV IFCmedia 9
On the Launch Phase Launching in Africa Launching in Russia Launching in Ukraine Launching in Latin America 10
Income Sources For Filmbox Advertising CPS- Cost Per Subscriber Premium Package Sales Online services 11
What We Have Done So Far To Increase the Income? 12
Stronger Team In Place We have established a strong international team who will be responsible for : Central Eastern Europe Americas Brazil Africa Russia Bulgaria Ex Yugo Countries Middle East 13
Conducted Uplift of the Brand Our new logo received very positive reactions The brand - new on air graphics looks great FilmBox brand is now at the heart of our company 14
New Deals Made! We made new deals with new platforms We started to increase our premium package sales We renewed existing deals with more favorable conditions 15
Marketing We created local marketing teams We started to work closer with the platforms We started to create synergies between our brands and channels We focused on premium packages and created marketing activities accordingly. 16
Filmbox Live a multiscreen entertainment platform THE FUTURE OF ONLINE ENTERTAINMENT Live-Streaming TV VOD Movie Library Theme-based Applications Designed for Connected TVs, mobile devices, PCs Subscription-based Services Credit Card/SMS/Payment Options NEW, IMPROVED FILMBOXLIVE 2.0 AVAILABLE FOR ios, Android, WEB, Smart TV. 17
Filmbox Online Service Integration We have started to integrate our online service Filmbox Live in to our premium packages We also started to offer FilmBox Live as an online tool for our existing clients 18
Filmbox International STRENGTHS Good Penetration in to Platforms Good relations with all the clients An increasingly good team in place Cost efficient content strategy A very good online complimentary product in place Opportunities We can increase our premium penetration and increase our revenues We are entering in to new countries. New platforms results in new profit We create advertising revenues through basic tier channel Weaknesses Premium package penetration is still low Premium product and basic product is sometimes confused Brand recognition can be improved Threats Content costs may rise in time Increasing DTT penetration may cause problem for our partners Lag times in deals are causing slow movements in results 19
FilmBox s goal is to provide a 360 services and channels to reach the subscribers at each platform. Filmbox Tier Channel: Entertaining service for the Basic and EBS packages Filmbox Premium Package Pay TV: value added entertainment service for subscribers to get the newest films and series Filmbox Live: Additional and Stand alone live TV online stream and SVOD services with real content: film, series and much more 20
Filmbox - the WIN/WIN/WIN solution Subscriber s prospective: getting all services with real entertainment at any device, anytime, anywhere for one subscription Operator s prospective: Filmbox is providing multiscreen entertaining services with a reasonable business model, charging the subscriber instead of the business partner doing it directly FilmBox s prospective: opportunity to grow and develop content and services providing the best entertainment service in the market 21
NUMBER OF ACTIVE SUBSCRIBERS - ROMANIA Channel As at 31.12.2012 As at 31.12.2013 As at 31.03.2014 Estimation 2014 FilmBox Basic 623 884 890 915 FilmBox HD 20 27 28 87 FilmBox Family 101 79 75 135 FilmBox Extra 1 101 82 78 138 This table contains information about the number of active subscribers (households) with access to each channel in Romania. The reason of decrease of number of active subscribers of FilmBox Family and FilmBox Extra 1 compared 31.03.2014/31.12.2013 - decrease of the number of UPC clients 22
NUMBER OF ACTIVE SUBSCRIBERS - HUNGARY Channel As at 31.12.2012 As at 31.12.2013 As at 31.03.2014 Estimation 2014 FilmBox Basic 622 1 341 1 315 1 400 FilmBox Plus 322 34 64 70 FilmBox HD 33 19 21 25 FilmBox Family 40 43 43 55 FilmBox Extra 31 33 40 55 FilmBox Extra 1 39 42 0 0 FilmBox Arthouse - - 8 2 This table contains information about the number of active subscribers (households) with access to each channel in Hungary. The reason of decrease of number of active subscribers of FilmBox Basic compared 31.03.2014/31.12.2013- some clients sold their network to RCS where FilmBox channels are not present 23
NUMBER OF ACTIVE SUBSCRIBERS CZECH REPUBLIC Channel As at 31.12.2012 As at 31.12.2013 As at 31.03.2014 Estimation 2014 FilmBox Basic 893 896 879 879 FilmBox Plus 643 659 657 710 FilmBox HD 282 283 285 309 FilmBox Family 19 22 20 27 FilmBox Extra 10 21 20 27 This table contains information about the number of active subscribers (households) with access to each channel in Czech Republic. The reason of decrease of number of active subscribers compared 31.03.2014/31.12.2013 - decrease of the number of UPC clients 24
NUMBER OF ACTIVE SUBSCRIBERS - SLOVAKIA Channel As at 31.12.2012 As at 31.12.2013 As at 31.03.2014 Estimation 2014 FilmBox Basic 285 321 331 357 FilmBox Plus 9 25 34 37 FilmBox HD 8 29 39 43 FilmBox Family 8 22 27 30 FilmBox Extra 8 22 27 30 This table contains information about the number of active subscribers (households) with access to each channel in Slovakia. 25
NUMBER OF FORECASTED NEW SUBSCRIBERS Territories and channels Estimation of number of active subscribers as at the end of 2014 EX Yugo (FilmBox Basic, FilmBox HD) 100 Bulgaria (FilmBox Basic, FilmBox HD) 75 Ukraine (FilmBox Arthouse) 50 Africa (FilmBox Arthouse, FilmBox Basic) 25 SOON: Russia, India 26
NUMBER OF ACTIVE SUBSCRIBERS - POLAND Name of channel As at 31.12.2012 As at 31.12.2013 As at 31.03.2014 Estimation 2014 Telewizja Kino Polska 8 175 8 322 8 206 8 260 Kino Polska Muzyka 1 707 5 540 5 618 5 680 FilmBox Basic 4 810 5 110 5 211 5 150 FilmBox Premium 1 698 1 725 1 758 1 775 The presented above table provides information regarding the number of active subscribers with access to different channels under the services provided by cable and satellite operators in Poland. The increase in the number of active subscribers (compared 2012/1Q 2014) of the channel Kino Polska Muzyka was mainly related to the introduction of this channel to the offer of Cyfrowy Polsat and nc +, as well as the extension of its distribution in the major Polish cable operators (among other: UPC, Vectra, Multimedia Polska). 27
CONSOLIDATED FINANCIAL RESULTS Operating segments BROADCASTING ACTIVITY Revenues 1 Q 2013 (in thousand PLN) Revenues 1 Q 2014 (in thousand PLN) y/y (%) Profitability 1 Q 2013 (%) Profitability 1 Q 2014 (%) 11 787 15 360* +30% 24% 25% CHANNEL PRODUCTION 9 262 1 333-86% 9% 13% ADVERTISING 3 248 3 990 +23% 89% 87%** VOD 984 593-40% 29% 38% *revenues from this source would have been higher if not for the fusion of nc + and a decrease of the revenue from this operator (increase about 1 535k PLN in 1Q 2014 (y/y)) **in 1 Q 2014 we had costs of barter which has not yet brought revenues 28
FILMBOX MOVIE CHANNELS EBITDA PER TERRITORY 1Q2014 Poland Romania Hungary Czech Republic Slovakia Other territory TOTAL Revenues 6 520 975 1 289 1 851 603 0 11 238 Costs 4 154 599 1 275 996 691 1 695 9 410 EBIT 2 366 376 14 855-87 -1 695 1 828 Depreciation/Amortization 522 243 280 268 244 975 2 532 EBITDA 2 888 619 293 1 123 157-720 4 360 (in thousand PLN) 29
FORECAST OF CONSOLIDATED EBITDA FOR 2014 EBITDA PUBLICATED ON JULY 3, 2013 ADJUSTED EBITDA* PUBLICATED ON MAY 15, 2014 EBITDA 1Q 2014* 55 mln PLN 42 mln PLN 8,3 mln PLN *EBITDA does not include any impact of Stopklatka S.A such as profit on sales of Stopklatka S.A. shares and Stopklatka S.A. net loss The reason of the decrease of EBITDA profit forecast for 2014: merger nc + and the associated outflow of a part of the subscribers of the newly created platform, which affected the decrease in revenues of Kino Polska TV S.A. Capital Group by approximately 35% obtained from this contractor, in the Czech Republic in connection with a significant competition from television channels distributed by free digital terrestrial television, the revenues on the broadcast of film channels of the FilmBox brand are at a lower level than expected. 30
CONSOLIDATED FINANCIAL RESULTS The factors which have had a negative impact on the financial results (1Q2014 vs 1Q2013) Differences between 1Q2014-1Q2013 decrease of revenues from nc + - 1 535k increase of foreign exchange differences - 431k increase of net loss STK SA - 215k lower financial income (decrease of positive foreign exchange differences) - 228k increase of other operating expenses, mainly: - 554k impairment loss of intangible assets -281k impairment on receivables -210k donations given to Fundacja Kino Polska -80k (in PLN) 31
ADVERTISING REVENUES & VIEWERSHIP Kino Polska Televsion The lowest viewership level was mainly connected with the high base of the comparative period, achieved, among other, through the broadcast of popular TV series enjoying at that time high viewing figures. 32
ADVERTISING REVENUES & VIEWERSHIP Kino Polska Muzyka One of the main factors affecting such significant improvement in the viewership of this channel was its introduction to the offer of Cyfrowy Polsat and nc +, as well as the extension of its distribution at the major Polish cable operators (including UPC, Vectra, Multimedia Polska). 33
ADVERTISING REVENUES & VIEWERSHIP FilmBox (basic) The results of viewership of the FilmBox channel were influenced mainly by specific programming offer. The programming content of the channel is currently on the defensive due to the dispersion of film offers in a number of television channels, and additionally, the availability of similar content is very broad in the non-linear sources. 34
DIVIDEND FOR YEAR 2013 The total amount that Kino Polska TV S.A. may allocate for the payment of dividend for 2013 amounts to PLN 6,269,693.62 The amount allocated to the payment of dividend may consists of the following components: Kino Polska TV S.A. net profit for 2013 in the amount of PLN 3,458,236.10; Kino Polska TV S.A. supplementary capital as at 31 December 2013, which, according to the provisions of the Code of Commercial Companies ( CCC ) may be allocated for distribution, generated from the profits in the period 2007-2012 in the amount of PLN 2,811,457.52. In the adopted dividend pay-out policy in 2013-2014, the Management Board of Kino Polska TV S.A. assumed that the supplementary capital for the period 2003-2006 resulting from payments to shareholders in the amount of PLN 6,386,911.27 would be fully allocated for the payment of dividend to shareholders for 2013, which for formal reasons (CCC requirements) proved to be impossible. 35
DIVIDEND FOR YEAR 2013 On June 2, 2014 the Supervisory Board of Kino Polska TV S.A. gave its positive opinion to the motion of the Management Board of the Company regarding distribution of profit of the Company for 2013 in the amount of PLN 3 458 236,10 and profit for previous year in the amount of PLN 2 761 395,70 in such a manner that the achieved profits should be paid to the shareholders as a dividend. The Management Board of the Company will recommend at the next General Shareholders Meeting of Kino Polska TV S.A. to exclude the right to dividend for 2013 in relation to 6 million series C shares acquired by Oblio International B.V. (currently SPI International B.V.) in exchange for 100% of shares in Filmbox International Ltd. In this case the dividend for 2013 and for previous year will cover 13,821,404 of the Company s shares and its amount per one share will amount to PLN 0.45 (the total amount of the dividend PLN 6,219,631.80). 36