Nine Entertainment Co. Holdings Limited · ASX:NEC
Nine Entertainment — FY2023 Earnings Presentation
32 slides from Nine Entertainment's earnings presentation, Aug 24, 2023
Slide 1: FY23 Final Results
FY23 FINAL RESULTS 24 AUGUST 2028 fA
Slide 2: Mike Sneesby, Chief Executive Officer
MIKE SNEESBY CHIEF EXECUTIVE OFFICER
Slide 3: Operational Highlights
OPE R ATI ON AL HIGHLIGHT S SUBSCRIBER ENG AGEMENT MARKET LEADING CONTENT #1 IN TOTAL TELEVISION EN ABLES PRICE RISES Nine’s content has led the Nine leads across Total Television Successful implementation of market across all platforms – on both a key ratings and price increases across both Broadca
Slide 4: Group EBITDA in line with guidance
GROUP E BI TDA I N L I N E W I TH G UI DAN C E EBITDA, A$M 4 Refer to glossary in Appendix 4 for definitions. Totals may not add due to rounding
Slide 5: Digital growth continues
D I G I TA L G R O W T H C O N T I N U E S 400 EBITDA, A$M REVENUE, A$M 1400 DIGITAL REVENUE +7% TO 350 46%1 OF GROUP REVENUE 1200 300 1000 DIGITAL EBITDA 250 (WHOLLY OWNED) +2% 800 200 600 150 400 100 200 50 0 0 FY19 FY20 FY21 FY22 FY23 Axis Title Digital EBITDA Domain Digital EBITDA Total Digital
Slide 6: Matt Stanton, Chief Financial & Strategy Officer
M AT T S TA N T O N CHIEF FINANCIAL & STRATEGY OFFICER
Slide 7: Group results – in line with guidance
G R O U P R E S U LT S – I N L I N E W I T H G U I D A N C E GROUP FY GROUP GROUP FY DIVIDEND REVENUE EBITDA MARGIN 11.0 CPS $2,695 $591M 22% (-3.0cps) (-) (-16%) A$M FY23 FY22 VARIANCE REVENUE1 2,694.6 2,688.8 - GROUP EBITDA1 591.2 700.7 (16%) EBIT1 435.5 551.6 (21%) GROUP NPAT, PRE MINORITIES1 279
Slide 8: Specific Items
S PE C I FI C I TE M S A$M H1 FY23 H2 FY23 FY23 DOMAIN - REFER DOMAIN ACCOUNTS (ASX:DHG), 17TH AUG 2023 (2.3) (7.2) (9.5) IMPAIRMENT OF GOODWILL AND OTHER INTANGIBLES - (84.5) (84.5) IMPAIRMENT OF OTHER ASSETS - (19.0) (19.0) RESTRUCTURING COSTS (1.6) (6.7) (8.3) NET PROFIT ON SALE OF INVESTMENTS AN
Slide 9: First half cash flow shortfall unwinds in H2
F I R S T H A L F C A S H F L O W S H O R T FA L L U N W I N D S I N H 2 FY CASH CONVERSION 1 FY23 CAPEX 1 91% $62M FY23 FY23 FY22 A$M DOMAIN REPORTED ADJUSTED1 ADJUSTED1 EBITDA (BEFORE ASSOCIATES) 590.9 103.3 487.6 576.8 WORKING CAPITAL (43.3) 1.2 (44.5) (7.4) ASSOCIATES 0.5 - 0.5 0.2 OPERATING CAS
Slide 10: Balance sheet remains strong with capacity
B A L A N C E S H E E T R E M A I N S S T R O N G W I T H C A PAC I T Y A$M AS AT 30 JUNE 2023, A$M CONSOLIDATED GROUP DOMAIN WHOLLY OWNED GROUP INTEREST BEARING LOANS AND BORROWINGS 642.9 219.3 423.6 LESS: CASH AND CASH EQUIVALENTS (119.7) (34.8) (84.9) NET DEBT/(CASH) 523.2 184.5 338.7 NET LEVERAG
Slide 11: Divisionals
DIVISIONALS FY23 FULL YEAR RESULTS
Slide 12: Broadcast – TV & Radio
BROADCAST – T V & RADIO Revenue1 contribution – FY23 A$M FY23 FY22 VARIANCE REVENUE TOTAL TELEVISION 1,249.6 1,269.5 (2%) RADIO 106.4 102.4 +4% BROADCAST REV 1,356.0 1,371.9 (1%) COSTS TOTAL TELEVISION 942.7 883.6 (7%) RADIO 93.8 87.2 (8%) EBITDA1,2 contribution – FY23 BROADCAST COSTS 1,036.5 970.8
Slide 13: Total Television – record share across both key platforms
T O TA L T E L E V I S I O N – R E C O R D S H A R E AC R O S S B O T H K E Y P L AT F O R M S TOTAL T V AD TOTAL T V AD MARKET 1 NINE REVENUE OF DIGITAL REVENUE MARKET 1 SHARE $1.2B $2.9B 41.8% (2%) (-9%) (+2.8 PTS) LINEAR REVENUE A$M FY23 FY22 VARIANCE REVENUE FTA 1,074.1 1,118.5 (4%) 9NOW 175.5 1
Slide 14: FTA Television – strong ratings & share performance
F TA T E L E V I S I O N – S T R O N G R AT I N G S & SHARE PERFORMANCE #1 #1 #1 RATINGS SHARE RATINGS SHARE RATINGS SHARE 25-54s 1 16-39s 1 GB+CH 1 METRO FTA NINE #1 METRO REGIONAL MARKET NET WORK REVENUE REVENUE -11%2 REVENUE SHARE SHARE 3 -4% 40.7%2 38.3%2 (+2.5 pts) (+2.8 pts) • Record and marke
Slide 15: Live accounts for ~half of 9Now minutes
L I V E AC C O U N T S F O R ~ H A L F O F 9 N O W M I N U T E S DAILY ACTIVE USERS GROW TH IN LIVE TOTAL LIVE MINUTES +18% 1 STREAMS +22% 2 +21% 2 9NOW REVENUE BVOD MARKET # 1 BVOD MARKET SHARE DIGITAL VIDEO MARKET +16% +6% TO $392M3 49.1% (+ 4.1 pts) +7% TO $3.4B4 • Live continues to drive core gr
Slide 16: Growing share of the digital video market
G R O W I N G S H A R E O F T H E D I G I TA L V I D E O M A R K E T 9Now revenue share of digital video market 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% Jul-Sept Jul-Sept Jul-Sept Jul-Sept Jul-Sept Jul-Sept Jul-Sept Oct-Dec Oct-Dec Oct-Dec Oct-Dec Oct-Dec Oct-Dec Oct-Dec Jan-Mar Jan-Mar Jan-Mar Jan-M
Slide 17: Nine Radio – strong growth in streaming revenues
NINE RADIO – STRONG GROW TH IN STREAMING REVENUES RADIO MARKET NINE RADIO DIGITAL REVENUE TOTAL LISTENING +0.2%1 AGENCY SHARE 2 2.2X PCP HOURS 3 NINE RADIO LINEAR AD ~17.3% INCL UP 19% REVENUE GROWTH +0.4% PTS STREAMING +100% ON FY21 +1.0% A$M FY23 FY22 VARIANCE REVENUE BROADCAST 102.1 100.4 +2% DIG
Slide 18: Stan – margin expansion with ARPU growth
S TA N – M A R G I N E X PA N S I O N W I T H A R P U G R O W T H Revenue1 contribution – FY23 ACTIVE SUBSCRIBERS GROW TH IN EBITDA approaching 2.6M OVERALL ARPU +30% PAYING SUBSCRIBERS +9% TO $37M >2.2M A$M FY23 FY22 VARIANCE REVENUE 427.6 381.2 +12% COSTS – STAN 300.5 277.7 (8%) ENTERTAINMENT COST
Slide 19: Publishing - robust performance in weak market
PUBLISHING - ROBUST PERFORMANCE IN WEAK MARKET Revenue1 contribution – FY23 DIGITAL REVENUES GROW TH IN ACTIVE >60% OF TOTAL SUBSCRIPTION SUBSCRIPTIONS REVENUE REVENUE >460K UNDERPINNED BY DIGITAL A$M FY23 FY22 VARIANCE DIGITAL SUBSCRIPTION & LICENSING 180.0 170.8 +5% REVENUE ADVERTISING 141.6 163.7
Slide 20: Domain – challenging market conditions
D OMAI N – C HAL L E N GI N G MARKET CONDITIONS Revenue1 contribution – FY23 A$M FY23 FY22 VARIANCE REVENUE RESIDENTIAL 223.1 239.4 (7%) MEDIA, DEVELOPERS & 47.8 49.4 (3%) COMMERCIAL AGENT SOLUTIONS 40.7 21.9 +86% DOMAIN INSIGHT 17.3 14.9 +16% CORE DIGITAL 328.9 325.6 +1% CONSUMER SOL’NS - - - TOTAL
Slide 21: Australia Belongs Here
AUS TR AL I A BE LON GS HE R E Community Company Climate We will create opportunities for all We want everyone to know they have the We are focused on developing the tools Australians to feel they belong here opportunity to join the Nine community and framework, to give us the ability to fully measu
Slide 22: Trading Update & Outlook
T RA DING UPDAT E & OUTLOOK MIKE SNEESBY
Slide 23: Trading Update
TR AD I N G UPDATE Total Television Radio Stan Publishing Domain CY23 to date, Nine leads the Nine’s Q1 Radio Strong content Digital audiences continue Sale listings in Sydney and Metro FTA ratings year in the advertising revenue performance at Stan to grow Melbourne show early signs key demographic
Slide 24: Unprecedented cross-platform Olympics & Paralympics strategy
UN P R E C E D E N TE D C RO S S - PL ATFOR M O LY M PI C S & PAR ALY M P I C S S T R AT E GY FTA 9Now Total Publishing Total Audio Stan/Stan Sport Every big moment, live Every sport, every Unprecedented Your favourite Every minute, every and free Aussie, every medal, editorial coverage and personal
Slide 25: We shape culture by sparking conversations
25 We shape culture by sparking conversations, challenging perspectives, and entertaining communities. We bring people together by celebrating the big occasions and connecting the everyday moments. Australia Belongs Here. FY23 FINAL RESULTS
Slide 26: Appendices
APPENDICES FY23 FULL YEAR RESULTS
Slide 27: Appendix 1: FY23 Group Divisional Results
APPENDIX 1: FY23 GROUP DIVISIONAL RESULTS Revenue1 contribution – FY23 A$M BROADCAST PUBLISHING STAN DOMAIN CORPORATE ASSOCIATES INTERSEGMENT TOTAL REVENUE 1,356.0 575.2 427.6 354.5 2.1 - (20.8) 2,694.6 PCP 1,371.9 593.5 381.2 356.7 4.9 - (19.4) 2,688.8 % CHG (1%) (3%) +12% +2% (56%) - - - EBITDA1,2
Slide 28: Appendix 2: Linear TV Ratings – 2023 to date
APPENDIX 2: LINEAR TV RATINGS – 2023 TO DATE 2023 TO DATE NETWORK PRIMARY CHANNEL COMMERCIAL RATINGS SHARE (%) Seven Nine Ten Seven Nine Ten CALENDAR YEAR 6PM- TOTAL 39.6 39.0 21.4 40.2 40.0 19.7 (1 JANUARY – MIDNIGHT PEOPLE 19 AUGUST) 25-54S 34.6 39.3 26.1 35.3 40.1 24.6 16-39S 35.5 39.2 25.2 35.8
Slide 29: Appendix 3: Forward Estimates
APPENDIX 3: FORWARD ESTIMATES ITEM FY24 CORPORATE COSTS – WHOLLY OWNED ~$37M TO $40M DEPRECIATION & AMORTISATION - REPORTED ~$160M TO $170M INTEREST EXPENSE – REPORTED, PRE BUY-BACK ~$50M TAX RATE - REPORTED ~30% CAPEX (EX DOMAIN) ~$90M TO $100M DIVIDEND 60-80% OF NET PROFIT AFTER TAX, BEFORE SPECIF
Slide 30: Appendix 4: Glossary
APPENDIX 4: GLOSSARY Net Leverage (wholly owned) – Net Debt (wholly owned) divided by wholly Active subscribers (Stan) – Subscribers who have an active Stan account owned Group EBITDA plus dividends received (last 12 months) in the billing period, including but not limited to paying subscribers, Net
Slide 31: Important Notice and Disclaimer
IMPORTANT NOTICE AND DISCLAIMER Important Notice and Disclaimer This document is a presentation of general background information about the activities of Nine Entertainment Co. Holdings Limited (“NEC”) current at the date of the presentation, (24 August 2023). The information contained in this prese
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Nine Entertainment Co. Holdings — FY2023 Earnings Presentation on 6ix