Nine Entertainment Co. Holdings Limited · ASX:NEC
Nine Entertainment — FY2014 Earnings Presentation
28 slides from Nine Entertainment's earnings presentation, Aug 28, 2014
Slide 1: Full Year Results Briefing
David Gyngell CEO Full Year Results Briefing Simon Kelly COO/CFO Peter Wiltshire Group Sales Director 28 August 2014 Geoff Jones MD, Nine Live Alex Parsons MD, Nine Digital
Slide 2: Disclaimer
Disclaimer Important notice and disclaimer expectations, estimates and intentions expressed in such forward This document is a presentation of general background information looking statements and many of these factors are outside the control about the activities of Nine Entertainment Co. Holdings L
Slide 3: Positive momentum across the business
Positive momentum across the business • Result moderately ahead of Prospectus Pro Forma forecast • Revenue share gains and cost control drive improved TV result in a softening advertising market • Integration of Nine Adelaide and Nine Perth on track • Record Live result with strong contributions fro
Slide 4: FY14 result - ahead of Prospectus
FY14 result - ahead of Prospectus Reported Pro Forma Prospectus Actual Forecast Variance Actual Variance $m FY14 FY13 FY14 FY14 % FY13 % Revenue 1,550.4 1,270.1 1,578.3 1,565.9 +0.8 1,493.0 +5.8 Group EBITDA 309.7 261.9 311.0 305.0 +2.0 297.2 +4.7 NPAT 57.9 1,200.8 144.2 139.5 +3.4 136.7 +5.5 Operat
Slide 5: Reconciling the result
Reconciling the result Prospectus Actual Forecast $m FY14 FY14 Variance Reported NPAT 57.9 82.2 (24.3) IPO transaction costs 13.8 13.2 +0.6 Public company costs (1.0) (1.0) - Net interest adjustment 7.3 8.9 (1.6) Impact of historical divestments 5.7 - +5.7 Impact of historical acquisitions 7.2 6.5 +
Slide 6: Positive cash flow and conservative debt profile
Positive cash flow and conservative debt profile Prospectus Actual Forecast Actual Pro Forma FY14 FY14 Variance FY13 Operating Free Cash Flow, $m 271.9 232.6 +39.3 234.1 Operating Free Cash Flow Conversion 87% 76% +11 pts 79% Capital Expenditure and Purchased Ticketing 49.4 50.4 -1.0 41.4 Rights, $m
Slide 7: All divisions have positive momentum
All divisions have positive momentum Pro Forma • 6% revenue growth driven by Live Actual Vs Vs $m FY14 Prospectus FY13 and TV. Revenue Network 1,227.6 -0.3% +4.3% • 5% outperformance relative to Live 228.0 +7.7% +36.4% Prospectus at the EBITDA line Digital 122.7 - na • Corporate costs in line with P
Slide 8: television
::television
Slide 9: Nine Network – continued positive momentum
Nine Network – continued positive momentum Prospectus Pro Forma Actual Forecast Actual $m FY14 FY14 Variance FY13 Variance Revenue 1,227.6 1,231.4 -0.3% 1,177.6 +4.3% EBITDA 241.5 237.6 +1.6% 221.0 +9.3% Margin 19.7% 19.3% +0.4 pts 18.8% +0.9 pts • FTA Metro market growth of 3.5%^. Underlying growth
Slide 10: Nine's Metro Ratings and Revenue Share
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 FY07 H1 FY08 H2 FY08 H1 FY09 H2 FY09 H1 FY10 H2 FY10 H1 FY11 H2 FY11 H1 FY12 H2 FY12 H1 FY13 H2 FY13 H1 FY14 H2 FY14 Ratings share Revenue share * F
Slide 11: live
live
Slide 12: Nine Live – all segments growing
Nine Live – all segments growing Prospectus Actual Forecast Actual $m FY14 FY14 Variance FY13 Variance Revenue 228.0 211.8 +7.7% 167.4 +36.2% EBITDA 68.0 67.1 +1.4% 57.3 +18.7% Margin 29.9% 31.7% - 1.8 pts 34.3% -4.4 pts • Revenue growth driven by all key segments, especially Nine Touring and Events
Slide 13: Ticketek's ticket volumes
Core ticketing business continues to grow as Live diversifies Contribution to Nine Live Revenue Ticketek’s ticket volumes^ $m m 250 16.0 15.0 200 14.0 150 13.0 100 12.0 50 11.0 0 10.0 FY10 FY11 FY12 FY13 FY14 FY10 FY11 FY12 FY13 FY14 Ticketek Allphones Nine Touring and Events Other ^ Ticket volumes
Slide 14: New Opportunities for Nine Live
New Opportunities for Nine Live International Champions Cup (ICC) • 50:50 partnership with TLA • Bringing Europe’s best soccer teams to Australia in CY15 - 18 • Three games per year with key international teams on rotation • Nine Live will provide ticketing, sponsorship and hospitality services for
Slide 15: Daily Mail Australia. SERIOUS + POPULAR
Daily Mail Australia. / SERIOUS + POPULAR
Slide 16: Nine Digital – tracks to expectations as business transitions
Nine Digital – tracks to expectations as business transitions Pro Forma Pro Forma Pro Forma Underlying Underlying Underlying Actual Actual Forecast $m FY14 FY13 Variance FY14 FY13 FY14 Revenue 158.7 147.9 +7.3% 122.7 147.9 122.7 EBITDA 28.0 33.1 -15.4% 15.6 33.1 15.6 Margin 17.7% 22.4% -4.7 pts 12.7
Slide 17: 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 • 9Jumpin catch-up TV for NINE, Go and GEM. Total long form streams up 51% in FY14 on
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Slide 19: Positive progress on key strategic initiatives
Positive progress on key strategic initiatives Nine Network Nine Digital • Targeting a 40% revenue share • Consolidation and integration into Nine Network • Integration of Nine Adelaide and Nine Perth advertising sponsored business • One hour News • 9news.com.au • Healthy sports pipeline – Cricket W
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Slide 21: Appendices
Appendices • Appendix 1: Summary of segmental results • Appendix 2: Cash flow • Appendix 3a: Pro Forma adjustments – Nine Network • Appendix 3b: Pro Forma adjustments – Cash Flow • Appendix 4: Debt and leverage calculations • Appendix 5: Glossary 21 Refer to glossary in Appendix 5 for definitions of
Slide 22: Appendix 1: Segmental profit and loss
Appendix 1: Segmental profit and loss Reported Pro Forma Prospectus Actual Forecast Actual $m FY14 FY13 FY14 FY14 Variance FY13 Revenue Network 1,215.1 1,099.2 1,227.6 1,231.4 -0.3% 1,177.6 Live 228.0 170.9 228.0 211.8 +7.7% 167.4 Digital 107.2 - 122.7 122.7 - 147.9 Total Revenue 1,550.4 1,270.1 1,5
Slide 23: Appendix 2: Cash flow
Appendix 2: Cash flow Prospectus Actual Forecast Actual Pro Forma, $m FY14 FY14 Variance FY13 Variance EBITDA 306.5 301.5 +5.0 293.1 +13.4 Change in working capital (42.0) (75.1) +33.1 (61.3) +19.3 Distributions from Associates 2.9 1.3 +1.6 2.3 +0.6 Net non cash IPO adjustments 4.5 4.8 (0.3) - +4.5
Slide 24: Appendix 3a: Pro Forma adjustments – Nine Network
Appendix 3a: Pro Forma adjustments – Nine Network FY14 FY13 $m Revenue EBITDA Revenue EBITDA Reported 1,215.1 234.2 1,099.2 178.2 Affiliate fees Adelaide/Perth (11.6) - (83.0) - Actual revenue Adelaide/Perth 24.1 - 161.4 - Incremental EBITDA Adelaide/Perth - 7.3 - 42.8 Pro Forma 1,227.6 241.5 1,177.
Slide 25: Appendix 3b: Pro Forma adjustments – Cash flow
Appendix 3b: Pro Forma adjustments – Cash flow Actual Actual $m FY14 FY13 Statutory cash flows from operating activities 189.0 (38.3) Statutory interest received (4.6) (5.4) Statutory interest and other costs of finance paid 69.6 174.8 Statutory income tax 22.7 - Statutory free cash flow 276.7 131.0
Slide 26: Appendix 4: Debt and leverage calculations
Appendix 4: Debt and leverage calculations Actual Actual Pro Forma As at, $m 30 Jun 2014 31 Dec 2013 30 Jun 2013 Interest bearing loans and 603.1 898.0 870.7 borrowings MTM derivatives - (133.9) (99.7) Gross debt (net of MTM 603.1 764.1 771.0 derivatives) Cash and cash equivalents (219.8) (429.4) (3
Slide 27: 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 • IPO – Initial Public Off
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Nine Entertainment Co. Holdings — FY2014 Earnings Presentation on 6ix