Slide 1: Annual Results 2023
Annual Results 2023 22nd February 2024 1
Slide 2: Agenda
Agenda 1 Financial and Operational Highlights 2 Financial Performance 3 Investor Proposition 2024 4 SCA Update 5 Trading Outlook
Slide 3: Financial and Operational highlights
Financial and Operational highlights Financial Operational Revenue1 EBITDA1,2 #1 Metro Network4 #1 Breakfast Network8 $334.3M $71.6M 6.2M 3.1M - 1% - 13% + 4% + 8% NPAT1,2 Net Debt Regional Audiences iHeartRadio5 Registered Users $29.5M $75.1M 1.9M 2.6M - 22% + 23% + 10% Dividend #1 Podcast Publishe
Slide 4: 2023 key radio categories in growth
2023 key radio categories in growth • Top 5 radio spenders account for 43% of SMI radio revenue • 3 of the top 5 experienced growth year-on-year Top 5 Category Spenders - Radio (SMI) $120m $108m • Decline in total radio revenue in ‘23 driven by decline on $101m Gov spend; Back -$31m $100m • Radio’s
Slide 5: Continued success generating audiences
Continued success generating audiences We continue to grow our audiences across broadcast radio, digital audio streaming and Metro Podcasting Streaming podcasting through a considered content strategy that delivers Australia’s most popular content from world class talent, coupled with a Market Marke
Slide 6: Digital audiences are growing - revenue to follow
Digital audiences are growing - revenue to follow Digital audio revenue is in growth, but Growth will come from within the digital pool audience growth still outpaces advertising growth 100% 0.1 90% 0.09 79% Digital (Audio) $98m 80% 74% 0.08 Radio $619m 7% Audience Reach Revenue Share (SMI) 70% 0.07
Slide 7: Revenue out-performing market in H2
Revenue out-performing market in H2 Media-i National Radio/Streaming NPS • Investment in sales capability post regional acquisition resulting in Radio / Streaming Rank Promote Passive Detract NPS improving ARN performance • ARN sales team exceptionally well regarded on key measurement metrics ARN 1
Slide 8: Revenue upside from Regional Radio acquisition
Revenue upside from Regional Radio acquisition • ARN is a major force in regional media, with 47 regional stations across Australia serving as key pillars of the Remaining communities they broadcast in Opportunity • 2-year regional integration program now complete; on time and on-budget • In 2023 we
Slide 9: Unique, long-term contracts creating alignment and commercial opportunity
Unique, long-term contracts creating alignment and commercial opportunity • Top rating Breakfast shows in Sydney and Melbourne extended on longer term contracts o Kyle and Jackie O have been secured until 31 December 2034 o Christian O’Connell has been secured until 31 December 2029 • Aligning the o
Slide 10: Kyle & Jackie O to drive commercial opportunity in Melbourne
Kyle & Jackie O to drive commercial opportunity in Melbourne • Value of Melbourne radio market - $219m; KIIS1011 & KIIS1065 Audience Share Sydney value $200m • KIIS 1065 has 54% more average audience than KIIS101.1 • KIIS 1065 breakfast ranking = #1; KIIS101.1 ranking = #6 • K&J syndicated ‘Hour of
Slide 11: FY23 Financial Performance
FY23 Financial Performance Andrew Nye
Slide 12: Statutory results
Statutory results % change A$ million 2023 2022 % Change Pro forma1 Statutory result impacted by non-cash part impairment of ARN intangibles and gain on sale of Soprano investment Revenue before finance income 334.3 344.9 (3%) (1%) Other income 2.5 3.4 (25%) (25%) • Pro forma removes Soprano NPAT, a
Slide 13: ARN Group – Metro, Regional, Digital
ARN Group – Metro, Regional, Digital A$ million 2023 2022 % Improving metro revenue share into Q2 Change • Total advertising revenues declined 2% Metro 182.8 192.5 (5%) o Metro revenues -5% marginally ahead of market Regional 104.4 107.7 (3%) o National regional revenues -6% impacted by lower govern
Slide 14: Digital Audio
Digital Audio A$ million 2023 2022 % Change 36% revenue growth and losses narrowing Total revenue 19.8 14.6 36% • Consistent revenue trajectory since May 2023, with market share Revenue related costs (11.8) (7.9) 49% gains over last 4 months People & operating costs (16.9) (18.8) (10%) • Revenue rel
Slide 15: ARN Group – FY24 cost base
ARN Group – FY24 cost base Review of ARN operating model well progressed • Review commenced mid-2023 • Focused on simplifying and standardising radio operations • Objective to maximise operating margins through the cycle and enable continued investment. • $10m permanent annualised savings identified
Slide 16: Cody Outdoor – Hong Kong
Cody Outdoor – Hong Kong Secured iconic HK Tramways tram body contract Local currency 2023 • Cody Outdoor successful tenderer for iconic HK Tramways tram Excl exited Pro forma body contract; announced 22 February 2024. % contracts1 current A$ million 2023 2022 change % change contracts o Advertising
Slide 17: Group cash flow
Group cash flow Cash generation impacted by Sydney office relocation A$ million Dec 2023 Dec 2022 • Operating cash conversion 70.4%, down from 79.2%; temporary Net cash flow from operations 50.4 72.7 deterioration in working capital owing to Sydney relocation build in Dec Principal lease payments (1
Slide 18: Group balance sheet
Group balance sheet Sound balance sheet A$ million Dec 2023 Dec 2022 Change • Net debt $75.1 million and 1.26x1 leverage; impacted by necessary capex Cash and cash equivalents 18.9 23.9 (5.0) investment in Sydney office relocation Receivables 72.5 65.7 6.9 Tax asset 8.0 – 8.0 • Good tenure and undra
Slide 19: Investor Proposition 2024
Investor 4 Proposition 2024 K
Slide 20: ARN is an audio centric entertainment business
ARN is an audio centric entertainment business Building the foundations for future value creation. Attracting audiences Ensuring scale Meeting the market on its terms Creating & curating Australia’s most Distributing content everywhere across all Specialist skills plus technical capability to magnet
Slide 21: Investor headwinds and tailwinds into 2024
Investor headwinds and tailwinds into 2024 HEADWINDS TAILWINDS Kyle & Jackie O broadcasting into Realisation of regional revenue Macro environment Melbourne synergies Continued negative impact on consumer +$8m revenue synergy in 2023; Gaining sentiment Audience and commercial upside national revenue
Slide 22: SCA Update
SCA Update
Slide 23: Update on proposed transaction with SCA
Update on proposed transaction with SCA • On 18 October 2023, ARN and Anchorage Capital Partners Limited1 (“ACP”, and together with ARN the “Consortium”) made a non-binding indicative proposal to acquire 100% of the fully diluted share capital of Southern Cross Media Group Limited (“SCA”) (the “Indi
Slide 24: Commercial rationale for the proposed transaction
Commercial rationale for the proposed transaction (pre-transaction) (post-transaction) Enhance ARN's • 8 metro radio stations + 47 regional radio stations1 • 10 metro radio stations + 88 regional stations2 Proposed transaction audio business • 50% share in 2 Canberra stations (with SCA) • 50% intere
Slide 25: Trading Outlook
Trading Outlook
Slide 26: Trading Outlook – positive start to the year
Trading Outlook – positive start to the year January metro, regional and digital revenues were all up on the prior comparative period and delivered market share gains. Q1 total revenue is pacing 1% ahead of the prior comparative period with radio revenues pacing ~2% down offset by digital audio reve
Slide 27: ARN Media Limited / ABN 95 008 637 643
ARN Media Limited / ABN 95 008 637 643
Slide 28: Disclaimer
Disclaimer This document has been prepared by ARN Media Limited (ARN Media) to provide general information about the activities of ARN Media and its subsidiaries at the time of release of this document. Unless specified otherwise, information in this document refers to the relevant financial period
Slide 29: Appendices
4 Appendices N
Slide 30: Reconciliation of segment result to statutory result
Reconciliation of segment result to statutory result Segment result Significant items Statutory result A$ million 2023 2022 2023 2022 2023 2022 Revenue before finance income 334.3 344.9 – – 334.3 344.9 Other income 2.5 3.4 39.4 5.3 41.9 8.7 Share of associate profits 5.1 9.7 – – 5.1 9.7 Costs (270.3
Slide 31: Significant items
A$ million 2023 2022 Significant items Gain on sale of Soprano 39.1 – ATO interest and other income 1.4 – Current year includes: Fair value adjustment on Lux Group shares – 5.3 • Gain on sale of Soprano net of transaction costs • Interest and other income received from ATO $1.4m Integration costs –
Slide 32: ARN Media Corporate
ARN Media Corporate • FY23 Corporate costs expectation remains unchanged at ~$10m A$ million 2023 2022 % change to $11m, subject to on-target achievement of FY23 incentive targets Salary and wages 3.9 3.7 6% Incentives provided for 0.6 1.1 (49%) Board costs 1.0 1.1 (5%) Compliance and advisor costs
Slide 33: AASB 16 Leases – 2023
AASB 16 Leases – 2023 AASB 16 Leases AASB 16 Leases AASB 16 Leases Result without Reported A$ million Adjustment Adjustment Adjustment adoption of 2023 ARN HK Outdoor Investments AASB 16 ARN 72.2 (6.2) – – 66.0 Hong Kong 6.6 – (5.6)2 – 1.0 Investments 2.5 – – (0.3) 2.2 Corporate (9.8) – – – (9.8) Un
Slide 34: AASB 16 Leases – 2022
AASB 16 Leases – 2022 AASB 16 Leases AASB 16 Leases AASB 16 Leases Result without Reported A$ million Adjustment Adjustment Adjustment adoption of 2022 ARN HK Outdoor Investments AASB 16 ARN 86.5 (5.7) – – 80.8 Hong Kong 8.8 – (7.6)2 – 1.1 Investments 5.9 – – (0.2) 5.7 Corporate (9.5) – – – (9.5) Un