Southern Cross Media Group Limited · ASX:SXL
Southern Cross Media — FY2017 Earnings Presentation
28 slides from Southern Cross Media's earnings presentation, Aug 24, 2017
Slide 1: Southern Cross Austereo FY17 Investor Presentation
For personal use only SOUTHERN CROSS AUSTEREO FY17 INVESTOR PRESENTATION 24 August 2017 1
Slide 2: Disclaimer
Disclaimer For personal use only Summary information The material in this presentation has been prepared by Southern Cross Media Group Limited ABN 91 116 024 536 (“Southern Cross Austereo”) and contains summary information about Southern Cross Austereo’s activities current as at 24 August 2017. The
Slide 3: FY17 Results
For personal use only FY17 Results Grant Blackley 3
Slide 4: Results Summary
RESULTS SUMMARY For personal use only • Improvement across all key financial FY17 measures – building on a strong prior year performance Revenue $690.8m 7.5% • Revenue up 7.5% with growth in all asset EBITDA $177.4m 5.8% classes • Reported Net Profit After Tax (NPAT) up Reported NPAT $108.6m 40.7% 4
Slide 5: Headline Achievements
HEADLINE ACHIEVEMENTS For personal use only • Advertising revenue growth across all asset classes – group revenue up 7.5% Sales • Highly successful transition of regional television audiences and revenue following Performance transition to Nine Network July 1st, 2016 • Growth in both Metro & Regiona
Slide 6: FY17 Financial Results
For personal use only FY17 FINANCIAL RESULTS Nick McKechnie 6
Slide 7: Group Reported Statutory Results
GROUP REPORTED STATUTORY RESULTS For personal use only $ millions FY16 FY17 Var. Revenue 642.3 690.8 7.5% • Net Profit After Tax (NPAT) up 40.7% Expenses (474.6) (513.4) 8.2% • Underlying expense growth 1.5% (after excluding affiliation and revenue related EBITDA 167.7 177.4 5.8% costs) EBITDA Margi
Slide 8: Cashflow
CASHFLOW For personal use only $ millions FY16 FY17 • EBITDA to cash conversion at 86.1% - Opening Cash 143.1 94.8 underlying conversion of 91% if adjusted Cash from Operations 156.5 152.7 for benefit of licence fee relief (which will Tax payment (32.8) (36.4) be realised in FY18) Net Payments for N
Slide 9: Debt Facilities
DEBT FACILITIES For personal use only $m’s Net Debt 472.6 • Further reduction of net debt to $321m • 18% reduction in debt over year - including repayment 340.2 347.8 of $37m securitised receivables facility – syndicated 321.0 facility is lower cost following leverage reduction • Balance sheet flexi
Slide 10: Disposal of Non-Core Assets
DISPOSAL OF NON-CORE ASSETS For personal use only Disposal of NNSW TV licence – May 2017 • $55m consideration, $45m paid upfront and $10m unconditional deferred payment due May 2018 • Negative impact on group EBITDA in June 2017. Full year impact on EBITDA in FY18 circa $10m • Reduced exposure to Fr
Slide 11: Operational Review
For personal use only OPERATIONAL REVIEW 11
Slide 12: Operational Review
OPERATIONAL REVIEW For personal use only $ millions FY16¹ FY17 Var. • Group EBITDA up 5.8%. Trading EBITDA of Metro Revenue 242.3 247.2 2.0% $166.6m, excluding $10.8m of material one-off Regional Revenue² 382.2 421.4 10.3% items, is in line with trading update Corporate Revenue² 17.8 22.2 24.7% • Me
Slide 13: Metro Radio
METRO RADIO For personal use only • EBITDA margin improved 21.1% to 24.3% $ millions FY16¹ FY17 Var. • Normalised revenue growth of $7.1m or 3.3% - Total Revenue 242.3 247.2 2.0% after accounting for adverse impact of ATN Broadcast & Production (20.6) (13.2) 35.9% contract. This builds on revenue gr
Slide 14: Metro Advertising Revenue
METRO ADVERTISING REVENUE For personal use only $m’s Commercial share ³ 222.2 225.3 $m’s 4.4 50.0% 395.3 400.0 8.4 45.0% 390.8 40.0% 384.6 390.0 55.0 35.0% 378.5 56.5 380.0 30.0% 25.0% 370.0 20.0% 29.1% 29.1% 28.9% 28.7% 15.0% 360.0 157.3 166.0 10.0% 350.0 5.0% 0.0% 340.0 H1 FY16 H2 FY16 H1 FY17 H2
Slide 15: Regional – TV & Radio
REGIONAL – TV & RADIO For personal use only $ millions FY16 FY17 Var. • “Year of Transition” - substantial increase in TV TV Revenue 213.2 246.9 15.8% revenue from Nine affiliation switch Radio Revenue 169.0 174.5 3.3% • Increase in broadcast and production costs due Total Revenue 382.2 421.4 9.3% t
Slide 16: Regional Radio Advertising Revenues
REGIONAL RADIO ADVERTISING REVENUES For personal use only $m’s • Regional radio revenue up a further 2.0% - after 165.3 consolidating growth of 6.1% in prior year 162.1 • National revenue grew by 3.4% despite impact of Federal Election in FY16 112.3 113.8 • Local revenue growth of 1.3% or $1.5m – gr
Slide 17: Regional TV Advertising Revenues
REGIONAL TV ADVERTISING REVENUES For personal use only $m’s 233.0 • TV Advertising revenues up $42.8m or 22.5% after 190.2 successful transition to Nine Network affiliation 106.4 87.0 • Revenue across Channel Nine affiliated markets up 52.5% 103.2 126.6 • Slowing rate of decline in regional TV marke
Slide 18: Regional TV Advertising Revenue Share
REGIONAL TV ADVERTISING REVENUE SHARE For personal use only TEN → NINE - Regional QLD, SNSW & VIC ⁴ • SCA converting ratings to revenue with strong Commercial Share & Power Ratio and improving power ratio performance – 50.0% 1.20 delivering 103% in H1 and 106% in H2 45.0% 1.06 1.10 • Nine Network co
Slide 19: Corporate
CORPORATE For personal use only $ millions FY16¹ FY17 Var. • Revenue impacted by prior year loss on Telco Total Revenue 17.8 22.2 24.7% disposal of $5.0m Total Expenses (32.4) (30.7) 5.2% • Total Expenses positively impacted by resolution of copyright dispute, excluding this costs are flat EBITDA (1
Slide 20: Outlook and Strategic Vision
For personal use only OUTLOOK AND STRATEGIC VISION Grant Blackley 20
Slide 21: Outlook – The Year Ahead
OUTLOOK – THE YEAR AHEAD For personal use only • Trading update – July & August has been soft and a challenging market driven by weaker national spends Trading • SCA has been largely insulated through the benefit of a relatively high exposure to stronger local revenues, Update balancing weaker natio
Slide 22: Strategic Vision – Winning Aspiration
STRATEGIC VISION – WINNING ASPIRATION For personal use only “SCA is an entertainment company that seeks to deliver market leading value creating brands. Leveraging off our core competencies we provide content and insightful services that bind communities together to facilitate rewarding interactions
Slide 23: Strategic Vision - Core Competencies & Key Attributes
STRATEGIC VISION - CORE COMPETENCIES & KEY ATTRIBUTES For personal use only Three core competencies particularly stand out for SCA: • National reach: Through SCA’s various licenses and distribution platforms it is able to reach and engage with 95% of Australians. SCA is able to leverage off this rea
Slide 24: SCA Strategy FY2018 & FY2019
SCA STRATEGY FY 2018 & FY 2019 For personal use only $ Monetize all Ensure an improved Explore non-audio Optimise key audio available audience audio experience for entertainment in assets efficiently with our audience growth markets clients • Focus on Triple M • Accessibility to SCA’s • Improved aud
Slide 25: For personal use only
=Or personal use only ball SOUTHERN CROSS AUSTEREO
Slide 26: Appendix 1: Accounting Policy Change
APPENDIX 1: ACCOUNTING POLICY CHANGE For personal use only Accounting for indefinite lived assets • Review of tax effect accounting for licenses and brands following IFRS Interpretations Committee agenda decision • Intangibles with indefinite lives now assumed to be recovered through use, rather tha
Slide 27: Appendix 2: FY16 Metro Sales Reclassification
APPENDIX 2: FY16 METRO SALES RECLASSIFICATION For personal use only METRO CORPORATE Cost of Local Sales Cost of FY16 FY16 FY16 Local Sales FY16 $ millions Local Sales Recharge Local Sales As reported Reclassed As reported Recharge Reclassed Resources Resources Total Revenue 242.3 - - 242.3 17.8 - -
Slide 28: For personal use only
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Southern Cross Media Group — FY2017 Earnings Presentation on 6ix