Southern Cross Media Group Limited · ASX:SXL
Southern Cross Media — H1 FY17 Earnings Presentation
25 slides from Southern Cross Media's earnings presentation, Feb 23, 2017
Slide 1: H1 FY17 Investor Presentation
For personal use only SOUTHERN CROSS AUSTEREO H1 FY17 INVESTOR PRESENTATION 23 February 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 23 February 2017. Th
Slide 3: H1 FY17 Results
For personal use only H1 FY17 Results Grant Blackley 3
Slide 4: Results Summary
RESULTS SUMMARY For personal use only • Improvement across all key financial measures H1 FY17 • Group revenue up 9.2% with strong growth in TV revenues following successful affiliation switch to Revenue $351.8m 9.2% Nine EBITDA $92.6m 1.3% • EBITDA growth of 1.3% - normalised growth over prior year
Slide 5: Headline Achievements
HEADLINE ACHIEVEMENTS For personal use only • Advertising revenue growth across all asset classes – group revenue up 9.2% Sales • Improving revenues from national sales following change in TV affiliation and improved Performance sales practices and disciplines across all assets • Successful launch o
Slide 6: H1 FY17 Financial Results
For personal use only H1 FY17 FINANCIAL RESULTS Nick McKechnie 6
Slide 7: Group Reported Statutory Results
GROUP REPORTED STATUTORY RESULTS For personal use only $ millions H1 FY16 H1 FY17 Var. • Underlying expense growth 2.5%, after Revenue 322.0 351.8 9.2% excluding affiliation and revenue related Expenses (230.7) (259.5) (12.5%) costs Equity Accounted Profit 0.1 0.3 nm • Finance costs significantly lo
Slide 8: Cashflow
CASHFLOW For personal use only $ millions H1 FY17 • EBITDA to cash conversion has increased Opening Cash 94.8 to 82.4% (H1 FY16 74.0%) Cash from Operations 76.3 Tax payment (24.4) • Increased intangible asset base – Payments for Non-Current Assets (14.2) Authentic Entertainment. Network Net financin
Slide 9: Debt Facilities
DEBT FACILITIES For personal use only $m’s 506.9 • Interest cover headroom further improved to over 9x - as 472.6 financing costs reduced by 28.1% 340.5 347.8 • Drawn debt $395m with $100m undrawn facility – facility matures January 2019 • Balance of Receivables facility of $36.8m ($36.8m at 30 June
Slide 10: Disposal of Non-Core Assets: Transmission Sites
DISPOSAL OF NON-CORE ASSETS: TRANSMISSION SITES For personal use only Signed contract to sell 45 transmission sites to Axicom – specialist tower operator on 15th February 2017 – continues process of divesting non-core assets • $12.6m sales proceeds • $1.5m to $2.0m EBITDA divested • Long term access
Slide 11: Operational Review
For personal use only OPERATIONAL REVIEW 11
Slide 12: Operational Review
OPERATIONAL REVIEW For personal use only $ millions H1 FY16² H1 FY17 Var. Regional Revenue 188.5 216.7 15.0% Change in TV affiliation Metro Revenue 121.0 125.2 3.5% Corporate Revenue 12.5 9.9 (20.8%) H1 FY16 included $2.4m profit on sale of DMD Total Revenue 322.0 351.8 9.2% Regional Expenses (123.7
Slide 13: Metro Radio
METRO RADIO For personal use only $ millions H1 FY16² H1 FY17 Var. • Normalised revenue growth $8.6m (7.1%) accounting for $4.4m adverse impact from ATN contract Total Revenue 121.0 125.2 3.5% • ATN will deliver small revenue increase in H2 following Broadcast & Production (10.3) (10.0) (2.9%) anniv
Slide 14: Metro Advertising Revenue
METRO ADVERTISING REVENUE For personal use only Commercial share³ $m’s 115.0 111.4 1.6 50.0% Market 6.0 45.0% growth 28.2 40.0% +8.8% +0.7% +9.2% +5.5% (1.1%) +3.4% against 35.0% prior year 28.9 30.0% 25.0% 20.0% 85.2 15.0% 28.5% 28.8% 28.4% 29.1% 30.0% 28.2% 76.5 10.0% 5.0% 0.0% H1 FY16 H1 FY17 Q1
Slide 15: Regional – TV & Radio
REGIONAL – TV & RADIO For personal use only $ millions H1 FY16 H1 FY17 Var. TV Revenue 104.3 130.1 24.7% • TV revenue up by 24.7% Radio Revenue 84.2 86.6 2.8% • Radio revenue up by 2.8% Total Revenue 188.5 216.7 15.0% • One off marketing expenses $1.4m - Nine Broadcast & Production (44.4) (66.8) (50
Slide 16: Regional Radio Advertising Revenues
REGIONAL RADIO ADVERTISING REVENUES For personal use only • Potential to sell nationally - “ease of buying” $m’s 81.4 83.9 • National radio rebrand an “industry first” 40 regional HIT stations 28 regional Triple M stations 57.5 58.2 • Regional surveys – “first in 20 years” 24 regional surveys
Slide 17: Regional TV Advertising Revenues
REGIONAL TV ADVERTISING REVENUES For personal use only $m’s 122.7 • Advertising revenues increased by 28.7% 95.3 Nine markets – revenue up 56.8% (inclusive of 55.0 Olympics impact) 44.3 Regional news rollout underway – further stimulus to ratings and revenue 67.7 Stronger ratings start to CY17
Slide 18: Regional TV Advertising Revenue Share
REGIONAL TV ADVERTISING REVENUE SHARE For personal use only TEN → NINE – QLD, SNSW, VIC TEN - NNSW SEVEN - TAS Commercial Share & Power Ratio⁴ Commercial Share & Power Ratio⁴ 1.175 Commercial Share & Power Ratio⁴ 120.0% 40.0% 0.95 1.03 1.50 30.0% 0.92 1.10 100.0% 0.89 1.17 1.17 1.16 30.0% 0.90 80.0%
Slide 19: Corporate
CORPORATE For personal use only $ millions H1 FY16² H1 FY17 Var. • H1 FY16 revenue impacted by $2.4m gain on disposal Total Revenue 12.5 9.9 (20.8%) of DMD • Broadcast and production costs improved through Broadcast & Production (1.7) 4.7 nm reduction in radio licence fees held over from FY16 Employ
Slide 20: Outlook and Strategic Vision
For personal use only OUTLOOK AND STRATEGIC VISION Grant Blackley 20
Slide 21: Outlook & Guidance
OUTLOOK & GUIDANCE For personal use only • Advertising market remains relatively short with low growth forecast EBITDA • H2 FY17 EBITDA expected to deliver growth on H2 FY16 with full year operating EBITDA forecast to be at lower end of the guidance range of $177m - $183m Growth drivers positively i
Slide 22: Strategic Vision
STRATEGIC VISION For personal use only • Continued investment in core radio brands and localised content Leading • Stronger leverage of our scale and asset base entertainment • Expand into adjacent platforms & markets – evidenced by Vevo & Podcast One Australia provider • Invest in compelling conten
Slide 23: Q&A
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Slide 24: Appendix 1: H1 FY16 Metro Sales Reclassification
APPENDIX 1: H1 FY16 METRO SALES RECLASSIFICATION For personal use only METRO CORPORATE Cost of Local Sales Cost of H1 FY16 H1 FY16 H1 FY16 Local Sales H1 FY16 $ millions Local Sales Recharge Local Sales As reported Reclassed As reported Recharge Reclassed Resources Resources Total Revenue 121.0 - -
Slide 25: For personal use only
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Southern Cross Media Group — H1 FY17 Earnings Presentation on 6ix