Nine Entertainment Co. Holdings Limited · ASX:NEC
Nine Entertainment — H1 FY2014 Earnings Presentation
27 slides from Nine Entertainment's earnings presentation, Feb 27, 2014
Slide 1: Interim Results Briefing
Interim Results Briefing 27 February 2014 David Gyngell CEO Simon Kelly COO/CFO Mark Britt CEO, Mi9 Peter Wiltshire Group Sales Director
Slide 2: Disclaimer
Disclaimer Important notice and disclaimer ‘propose’, ‘will’, ‘believe’, ‘forecast’, ‘estimate’, ‘target’ and Pro Forma Financial Information This document is a presentation of general background other similar expressions within the meaning of securities The Company has set out in this presentation
Slide 3: Positive momentum across the business
Positive momentum across the business • First half earnings moderately ahead of underlying Prospectus forecast run rate • Metro market revenue share increased from 38.1% to 38.7% • Fifth consecutive year of ratings improvement in 2013, winning all key advertising demographics • Integration of Nine A
Slide 4: On track to deliver prospectus full year forecast
On track to deliver prospectus full year forecast Prospectus Pro Forma Reported Pro Forma Variance Forecast $m H1 FY14 H1 FY13 H1 FY14 H1 FY13 % FY 14 Revenue 799.7 651.1 845.6 773.4 +9.3 1,565.9 Group EBITDA 185.4 125.6 188.7 161.8 +16.6 305.0 NPAT 89.2 (80.2) 95.2 76.6 +24.3 139.5 Operating Free C
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Slide 6: Nine Network – strong first half
Nine Network – strong first half Pro Forma Pro Forma $m H1 FY14 H1 FY13 Variance Revenue 649.6 620.3 +4.7% EBITDA 149.2 119.6 +24.7% Margin 23.0% 19.3% +3.7 pts • FTA Metro market returned to growth +5% • Fifth consecutive ratings year of share improvement • Growth in all key advertising demographic
Slide 7: Revenue share follows ratings improvement
Revenue share follows ratings improvement Nine’s Metro Ratings and Revenue Share 40.0% 39.0% 38.0% 37.0% 36.0% 35.0% 34.0% 33.0% 32.0% 31.0% 30.0% H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 FY07 FY08 FY08 FY09 FY09 FY10 FY10 FY11 FY11 FY12 FY12 FY13 FY13 FY14 Ratings share Revenue share Refer to glos
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Slide 9: Nine Events – record first half result
Nine Events – record first half result $m H1 FY14 H1 FY13 Variance Revenue 134.6 74.5 +80.7% EBITDA 40.1 25.9 +54.8% Margin 29.8% 34.8% -5.0 pts • Revenue growth driven by Nine Live and Allphones • All principal segments contributed to EBITDA growth • Core Ticketek business continues to grow • Nine
Slide 10: Core ticketing business continues to grow as Events diversifies
Core ticketing business continues to grow as Events diversifies Contribution to Events’ Revenue Ticketek’s ticket volumes^ $m m 160 10 9 140 8 120 7 100 6 80 5 4 60 3 40 2 20 1 0 0 H1 H2 H1 H2 H1 H2 H1 H2 H1 H1 H2 H1 H2 H1 H2 H1 H2 H1 FY10 FY10 FY11 FY11 FY12 FY12 FY13 FY13 FY14 FY10 FY10 FY11 FY11
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Slide 12: Nine Digital – tracks to expectations as business transitions
Nine Digital – tracks to expectations as business transitions Pro Forma Underlying Underlying Underlying Pro Forma Forecast $m H1 FY14 H1 FY13 Variance H1 FY14 FY14 Revenue 79.4 78.6 +1.0% 61.4 122.7 EBITDA 13.7 21.2 -35.4% 7.8 15.6 Margin 17.3% 27.0% -9.7 pts 12.7% 12.7% • Acquired control of Mi9 o
Slide 13: Under 100% ownership – Digital is evolving
Under 100% ownership – Digital is evolving • Deepening the integration between TV and Digital • Capitalising on great content no matter what the device, time or place • Strong cross-promotion eg. Cricket Australia • Jump-in – the home of catch-up TV for NINE, Go and GEM (web and app). 600k downloads
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Slide 15: Positive cash flow and conservative debt profile
Positive cash flow and conservative debt profile Pro Forma Pro Forma Pro Forma Forecast H1 FY14 H1 FY13 Variance FY14 Operating Free Cash Flow, $m 178.0 175.6 +2.4 232.6 Operating Free Cash Flow Conversion 94% 109% -15 pts 76% Capex and Purchased Ticketing Rights, $m 26.8 16.8 +10.0 50.4 Operating F
Slide 16: Confident of delivering Prospectus forecasts
Confident of delivering Prospectus forecasts • Moderately stronger first half result than had been assumed in the Prospectus full year forecast • Outlook for the second half remains in line with Prospectus • Q3 tracking to expectations • Limited visibility of Q4 FTA market • Events seasonality skewe
Slide 17: Positive progress on key strategic initiatives
Positive progress on key strategic initiatives Nine Network Nine Digital • Integration of Nine Adelaide and Perth • Daily Mail Australia • One hour News • Consolidation and integration • Healthy sports pipeline • StreamCo • Product mix and schedule Nine Events Group • Major Ticketek contracts renewe
Slide 18: STATE OF
STATE OF TELSTRA ORIGIN PREMIERSHIP : “\ ie CRICKET AUSTRALIA
Slide 19: Appendices
Appendices • Appendix 1: Summary of segmental results • Appendix 2: Cash flow • Appendix 3a: Pro Forma adjustments – Nine Network • Appendix 3b: Pro Forma adjustments – NPAT • Appendix 3c: Pro Forma adjustments – Cash Flow • Appendix 4: Debt and leverage calculations • Appendix 5: Glossary Refer to
Slide 20: Appendix 1: Segmental profit and loss
Appendix 1: Segmental profit and loss Reported Pro Forma $m H1 FY14 H1 FY13 H1 FY14 H1 FY13 Variance Revenue Network 637.1 576.6 649.6 620.3 +4.7% Events 134.6 74.5 134.6 74.5 +80.7% Digital 27.9 ~ 61.4 78.6 -21.9% Total Revenue 799.7 651.1 845.6 773.4 +9.3% EBITDA Network 141.9 96.0 149.2 119.6 +24
Slide 21: Appendix 2: Cash flow
Appendix 2: Cash flow Pro Forma Pro Forma Pro Forma Forecast $m H1 FY14 H1 FY13 Variance FY14 EBITDA 186.6 160.2 +26.4 301.5 Change in working capital (9.6) 14.5 -24.2 (70.3) Distributions from Associates 1.0 0.9 +0.1 1.3 Operating Free Cash Flow 178.0 175.6 +2.4 232.6 Capex and Purchased Ticketing
Slide 22: Appendix 3a: Pro Forma adjustments – Nine Network
Appendix 3a: Pro Forma adjustments – Nine Network H1 FY14 H1 FY13 $m Revenue EBITDA Revenue EBITDA Reported 637.1 141.9 576.6 96.0 Affiliate fees Adelaide/Perth (11.6) ~ (43.8) ~ Actual revenue Adelaide/Perth 24.1 ~ 87.5 ~ Incremental EBITDA Adelaide/Perth ~ 7.3 ~ 23.6 Pro Forma 649.6 149.2 620.3 11
Slide 23: Appendix 3b: Pro Forma adjustments – NPAT
Appendix 3b: Pro Forma adjustments – NPAT Pro Forma Forecast $m H1 FY14 H1 FY13 FY14 Statutory NPAT (including Specific Items) 31.7 (82.4) 82.2 Specific Items before tax 61.1 3.2 60.0 Tax effect of Specific Items (3.6) (1.0) (5.0) Statutory NPAT (excluding Specific Items) 89.2 (80.2) 137.2 Public Co
Slide 24: Appendix 3c: Pro Forma adjustments – Cash flow
Appendix 3c: Pro Forma adjustments – Cash flow $m H1 FY14 H1 FY13 Statutory cash flows from operating activities 149.9 (4.3) Statutory interest received (2.7) (6.1) Statutory interest and other costs of finance paid 29.8 129.8 Statutory income tax 21.3 ~ Statutory free cash flow 198.3 119.4 Impact o
Slide 25: Appendix 4: Debt and leverage calculations
Appendix 4: Debt and leverage calculations Pro Forma As at, $m 31 Dec 2013 30 Jun 2013 Interest bearing loans and borrowings 898.0 870.7 MTM derivatives (133.9) (99.7) Gross debt (net of MTM derivatives) 764.1 771.0 Cash and cash equivalents (429.4) (307.5) Cash held on trust 136.3 110.9 Deferred pa
Slide 26: Appendix 5: Glossary
Appendix 5: Glossary • EBITDA – earnings before interest, tax, depreciation and amortisation, from continuing businesses before Specific Items • FTA – free-to-air • Group EBITDA – EBITDA plus share of Associates’ net profit, from continuing businesses before Specific Items • Metro – Sydney, Melbourn
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Nine Entertainment Co. Holdings — H1 FY2014 Earnings Presentation on 6ix