Nine Entertainment Co. Holdings Limited · ASX:NEC
Nine Entertainment — FY2018 Earnings Presentation
25 slides from Nine Entertainment's earnings presentation, Aug 23, 2018
Slide 1: FY18 Results Briefing
FY18 RESULTS BRIEFING 23 August 2018
Slide 2: Disclaimer
Disclaimer Important Notice and Disclaimer generally be identified by the use of forward looking words such as, warranty or guarantee as to the past, present or the future This document is a presentation of general background information ‘expect’, ‘anticipate’, ‘likely’, ‘intend’, ‘should’, ‘could’,
Slide 3: Hugh Marks, Chief Executive Officer
Hugh Marks Chief Executive Officer CONFIDENTIAL - DRAFT 3
Slide 4: Highlights FY18
POSITIVE FTA 6.5M+ REGISTERED USERS ON STRONG SECOND HALF HIGHLIG HTS RATINGS & REVENUE 9NOW, REPORTING 90% SUBSCRIBER GROWTH AT SHARE MOMENTUM REVENUE GROWTH STAN TO 1.1M-PLUS ACTIVES FY18 46% GROWTH IN DIGITAL ROLL-OUT OF AUTOMATED BUILD OUT OF FIRST PUBLISHING EBITDA, EX SALES PLATFORM PARTY DATA
Slide 5: Greg Barnes, Chief Financial Officer
Greg Barnes Chief Financial Officer CONFIDENTIAL - DRAFT 5
Slide 6: Momentum Across All Businesses
Momentum Across All Businesses GROUP GROUP EBITDA DPS NET DEBT REVENUE +25% 10.0 CPS $121M +6% TO $257M $M FY18 FY17 VARIANCE REVENUE 1 1,318.2 1,237.8 +6% GROUP EBIT DA1 257.2 205.6 +25% EBIT 1 220.5 170.3 +29% NPAT 1 156.7 123.6 +27% STATUTORY NET PROFIT/(LOS S) 209.7 (203.4) NM BASIC EARNINGS PER
Slide 7: Television Results Underpinned by Improved Market and Share
Television Results Underpinned by Improved Market and Share METRO NINE’S 23% FTA FTA SHARE 38.6%1 GROWTH IN COSTS +2%^ MARKET (+2.9% PTS) PREMIUM +2.5%1 REVS ^1% EX LICENCE FEE/EXTRA WEEK IMPACT $M FY18 FY17 VARIANCE REVENUE PREMIUM AD REVENUE 175.5 143.0 +23% OTHER2 976.9 937.4 +4% TOTAL REV 1,152.
Slide 8: Digital Growth Driven by 9Now
Digital Growth Driven by 9Now 9NOW REVENUE DIGITAL 9NOW TOTAL +89%1 PUBLISHING STREAMS DIGITAL REVENUE +93% COSTS EBITDA +5% +5% ~3X1 $M FY18 FY17 VARIANCE REVENUE 9NOW 40.8 21.6 +89% DIGITAL PUBLISHING 125.0 119.0 +5% OTHER2 0 14.1 - TOTAL REV 165.8 154.7 +7% TOTAL COSTS 131.7 125.8 +5% EBITDA 9NOW
Slide 9: Subscribers Race Through One Million
Subscribers Race Through One Million ACTIVE SUBSCRIPTION OPERATING EBITDA LOSS SUBS REVENUE COSTS DOWN 50% 1.1M+ +72% +23% Q4 VS Q1 AUGUST 2018 FY18 VS FY17 FY18 VS FY17 • More than 1.1m active subscribers after record May-June-July adds • Clear local leader in market, with engaged and growing audie
Slide 10: Strong Cashflow on Improved Working Capital
Strong Cashflow on Improved Working Capital $M H1 FY18 H2 FY18 FY18 FY17 EBITDA 180.9 75.2 256.1 205.4 WORKING CAPITAL 0.6 (19.7) (19.1) (62.6) LICENCE/SPECTRUM FEE TIMING (1.3) 5.9 4.6 (34.8) ASSOCIATES 0.5 0.5 1.0 1.2 OPERATING CASH FLOW, PRE SPECIFIC ITEMS, TAX AND 180.7 61.9 242.6 109.2 INTEREST
Slide 11: Michael Stephenson, Chief Sales Officer
Michael Stephenson Chief Sales Officer CONFIDENTIAL - DRAFT 11
Slide 12: Premium Integrated Partnerships Driving Revenue Growth
Premium Integrated Partnerships Driving Revenue Growth 200+ +23%1 +15%1 +53%1 MAJOR REVENUE GROWTH IN GROWTH IN ADVERTISERS GROWTH SPORT ENTERTAINMENT • Premium revenue now accounts for 15% of total revenue • Over 100 new premium relationships up year on year • Premium digital and IP revenue growing
Slide 13: Focussed on Delivering Full Funnel Marketing Solutions
Focussed on Delivering Full Funnel Marketing Solutions Television Brand Print Awareness Radio Advanced Audience Targeting (Virtual OZ) Brand Consideration BVOD Conversion & Sales Digital Addressable Advertising (6.5 million declared IDs) 13 Refer to glossary in Appendix 4 for definition s Full Year
Slide 14: Advanced Audience Targeting Delivering New Revenue Growth
Advanced Audience Targeting Delivering New Revenue Growth Advanced Audience Targeting Addressable Advertising Delivery of more targeted and more effective advertising Delivery of addressable advertising across against audience segments across television and 9Now device using 6.5 million declared 9No
Slide 15: 9Galaxy – The Most Advanced Buying Experience
9Galaxy – The Most Advanced Buying Experience Nine’s proprietary sales & traffic technology sits at the centre of 9Galaxy Genesis is used to on-board client briefs and GamePlan dynamically optimises the delivery optimise schedules against forecast OzTAM ratings of all campaigns maximising the utilis
Slide 16: Hugh Marks, Chief Executive Officer
Hugh Marks Chief Executive Officer CONFIDENTIAL - DRAFT 16
Slide 17: Primary Drivers of Value Creation
Primary Drivers of Value Creation Premium advertising solutions at scale • Ability to trade integrated solutions across key platforms • Underpinned by a significant shared first party data proposal Domain • Significant opportunity given market share and share discount to market leader • Enhanced by
Slide 18: Time line to Nine-Fairfax merger completion
Time line to Nine-Fairfax merger completion Early 17 14 Early November October October November December Scheme Booklet Payment of Final Dividend Scheme Meeting Annual General Meeting Completion • To be sent to • 5.0c fully franked to • Fairfax • 11am in Sydney Fairfax NEC shareholders shareholders
Slide 19: Current Trading Outlook for FY19
Current Trading Metro September Qtr FTA revenues are trading ~1% ahead of same time last year Core Sept Qtr digital revenues 1 are pacing ~15% ahead for the same period Outlook for FY19 FTA Television 9Now Digital Publishing Group EBITDA • Metro market • Positive • Growth in Digital • Between $280m-
Slide 20: Appendix
Appendix CONFIDENTIAL - DRAFT 20
Slide 21: Appendix 1. Specific Items
Appendix 1. Specific Items $M H1 FY18 H2 FY18 FY18 PROFIT ON DISPOSAL OF PROPERTIES 78.2 (1.3) 76.9 RESTRUCTURING COSTS (3.2) (2.6) (5.8) DERIVATIVE REVALUATION (12.9) (1.8) (14.7) OTHER - 0.3 0.3 TOTAL SPECIFIC ITEMS BEFORE TAX 62.1 (5.4) 56.7 TOTAL TAX RELATING TO SPECIFIC ITEMS (4.2) 0.4 (3.8) NE
Slide 22: Appendix 2. Sports Contracted Rights Costs
Appendix 2. Sports Contracted Rights Costs $M FY18 FY19 FY20 FY21 FY22 FY23 NRL CASH COSTS (66.8) (96.3) (111.2) (107.5) (116.2) (30.0) P&L COSTS (94.8) (102.5) (117.5) (120.0) (122.5) (65.0) FOXTEL SIMULCAST REVENUE 9.0 TENNIS (PRE ANY SALE OF INCREMENTAL RIGHTS) CASH COSTS (10.0) (38.5) (60.0) (60
Slide 23: Appendix 3. Debt and Leverage Calculations
Appendix 3. Debt and Leverage Calculations $M 30 JUN 2018 31 DEC 2017 30 JUN 2017 INTEREST BEARING LOANS AND BORROWINGS (157.6) 144.1 291.2 LESS: CASH AND CASH EQUIVALENTS 36.4 97.8 66.7 NET DEBT/(CASH) 121.3 46.2 224.5 NET LEVERAGE 0.5X 0.2X 1.1X 23 CONFIDENTIAL - DRAFT 23 Full Year Results Aug 201
Slide 24: Appendix 4. Glossary
Appendix 4. Glossary ARPU – Average Revenue Per User SF – Short form BVOD – Broadcast Video on Demand Specific Items – Amounts as set out in Note 1.4 of the 30 June EBITDA – Earnings before interest, tax, depreciation and 2018 Statutory Accounts amortisation , before Specific Items Statutory Account
Slide 25: :3:Nine
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Nine Entertainment Co. Holdings — FY2018 Earnings Presentation on 6ix