Nine Entertainment Co. Holdings Limited · ASX:NEC
Nine Entertainment — H1 FY2021 Earnings Presentation
34 slides from Nine Entertainment's earnings presentation, Feb 24, 2021
Slide 1: FY21 Interim Results
FY21 INTERIM RESULTS 24 FEBRUARY, 2021
Slide 2: Important Notice and Disclaimer
Important Notice and Disclaimer expectations about the performance of its businesses. likelihood of achievement or reasonableness of any This document is a presentation of general background Forward looking statements can generally be identified by forward looking statements, forecast financial info
Slide 3: Chief Executive Officer
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Slide 4: Operational Highlights
OPERATIONAL HIGHLIGHTS STRONG AUDIENCE RESULTS AD MARKET STRENGTH ON-DEMAND GROWTH Growth in Q2 ad market, led by FTA television Across all platforms Double-digit growth in streams across Stan and BVOD, and improving trends in and 9Now Publishing and Radio INVESTING IN GROWTH STRATEGY ON TRACK STRON
Slide 5: Structural Growth in Total Television Drives Profit
STRUCTURAL GROWTH IN TOTAL TELEVISION DRIVES PROFIT $M 0.9 14.3 (2.4) 14.6 TOTAL TV EBITDA +$89M 5 Refer to glossary in Appendix 6 for definitions. Totals may not add due to rounding
Slide 6: Digital Transformation Accelerating
DIGITAL TRANSFORMATION ACCELERATING $M, EBITDA1,2 400 350 300 250 200 150 DIGITAL 100 ACCOUNTS FOR DIGITAL EBITDA 41% +53% OF GROUP 50 EBITDA, AT >$140M 0 H1 FY20 H1 FY21 Digital Domain Non-Digital 1 Digital includes 9Now, Stan and the digital components of Domain (59%) and Publishing 2 Economic int
Slide 7: Chief Financial Officer
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Slide 8: Group Results
GROUP RESULTS GROUP GROUP GROUP H1 REVENUE EBITDA COSTS DIVIDEND $1,163M $355M $808M 5CPS (+42%) (-13%) (Unchanged) A$M H1FY21 H1FY20 VARIANCE REVENUE2 1,162.8 1,182.5 -2% GROUP EBITDA2 355.4 250.8 +42% EBIT2 279.1 176.9 +58% GROUP NPAT, PRE MINORITIES2 186.9 114.3 +64% GROUP NPAT, AFTER MINORITIES2
Slide 9: Specific Items
SPECIFIC ITEMS A$M H1 FY21 DOMAIN - REFER DOMAIN ACCOUNTS (ASX:DHG), 16TH FEB 2021 0.0 RESTRUCTURING & TERMINATION-RELATED COSTS (2.6) IMPAIRMENT (5.3) TOTAL SPECIFIC ITEMS BEFORE TAX (7.9) TOTAL TAX RELATING TO SPECIFIC ITEMS 2.8 NET SPECIFIC ITEMS AFTER TAX (5.1) 9 Refer to glossary in Appendix 6
Slide 10: Cash Flows
CASH FLOWS H1 FY21 CAPEX 2 CASH CONVERSION 2 ~$43M 84% Including $18m for Sydney move H1 FY21 H1 FY21 H1 FY20 A$M, WHOLLY-OWNED DOMAIN REPORTED ADJUSTED2 ADJUSTED1 EBITDA (BEFORE ASSOCIATES) 354.5 (54.4) 300.1 198.6 WORKING CAPITAL (65.7) 17.6 (48.1) (23.1) ASSOCIATES - - - 3.1 OPERATING CASH FLOW,
Slide 11: Strong Cash Flows Reduce Debt
STRONG CASH FLOWS REDUCE DEBT $M 100% owned continuing business EBITDA Includes ~$18m for Nth 1.6 2.7 Sydney relocation A$M WHOLLY OWNED GROUP DOMAIN CONSOLIDATED GROUP INTEREST BEARING LOANS AND BORROWINGS 203.4 172.0 375.4 LESS: CASH AND CASH EQUIVALENTS (53.9) (60.5) (114.4) NET DEBT/(CASH) 149.5
Slide 12: FY21 Interim Results: Business Review
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Slide 13: Broadcast – Television & Radio
BROADCAST – TELEVISION & RADIO Revenue contribution1 – H1 FY21 A$M H1 FY21 H1 FY20 VARIANCE REVENUE FTA TELEVISION 522.8 531.2 -2% 9NOW 54.6 42.0 +30% RADIO 44.0 57.6 -24% 51% BROADCAST REV 621.5 630.8 -1% COSTS FTA TELEVISION 351.5 420.6 -16% 5% 9NOW 21.4 14.7 +46% EBITDA contribution1,2 – H1 FY21
Slide 14: Free to Air Television (FTA)
FREE TO AIR TELEVISION (FTA) Q1 MARKET METRO FTA REVENUE FTA COSTS -14% 1 MARKET SHARE DOWN Q2 MARKET +0.6% 1 38.6% 1 19% in H1 2 +17% 1 $M H1 FY21 H1 FY20 VARIANCE TELEVISION REVENUE PREMIUM AD REVENUE 87.9 84.7 +4% OTHER3 434.9 446.5 -3% TOTAL TELEVISION REVENUE 522.8 531.2 -2% TELEVISION COSTS 35
Slide 15: Cost Out Reflects Structural Changes
COST OUT REFLECTS STRUCTURAL CHANGES $M 450 Cyclical 400 Structural ($55m)1 350 300 250 200 -16% 150 100 NRL One-off sport International News 50 0 H1 FY20 H1 FY21 TOTAL Refer to glossary in Appendix 6 for definitions. Totals may not add due to rounding. 1 I ncludes $4m of cost out manifesting as hig
Slide 16: 9Now - Broadcast Video on Demand
9NOW - BROADCAST VIDEO ON DEMAND BVOD MARKET1 9NOW REVENUE ~40% OF +44% SHARE 1 9NOW SALES TO $123M ~45% ATTRACT A PREMIUM DUE TO DATA A$M H1 FY21 H1 FY20 VARIANCE REVENUE 54.6 42.0 +30% COSTS 21.4 14.7 +46% EBITDA 33.2 27.3 +22% MARGIN 60.8% 65.0% -4.2 PTS • 8% increase in daily active users2 (with
Slide 17: FTA + BVOD - Television Combined
FTA + BVOD - TELEVISION COMBINED TOTAL MARKET1 NO.1 METRO VOZ TO ENABLE +1.6% SHARE 1 CROSS PLATFORM TO $1.8B 39.1% SALES A$M H1 FY21 H1 FY20 VARIANCE REVENUE 577.4 573.2 +1% COSTS 372.9 435.3 -14% EBITDA 204.5 137.9 +48% MARGIN 35.4% 24.1% +11.3 PTS TV combined – Revenue and EBITDA 800 Revenue, $m
Slide 18: Nine Radio
NINE RADIO AUDIENCE NINE RADIO RADIO GROWTH COSTS AGENCY MARKET +15% DOWN SHARE -19% 1 WITH CHANGED 18% FORMATS +3.4 PTS A$M H1 FY21 H1 FY20 VARIANCE REVENUE 44.0 57.6 -24% COSTS 41.1 50.0 -18% EBITDA 2.9 7.6 -62% MARGIN 6.6% 13.2% -6.6 PTS • Completion of acquisition from 21 November 2019 • Rebuild
Slide 19: Nine Publishing
NINE PUBLISHING Revenue contribution1 – H1 FY21 DIGITAL READER MASTHEADS 4% REVENUE DOUBLE-DIGIT GROWTH 60% SUBSCRIBER IN DIGITAL OF TOTAL GROWTH ADVERTISING MASTHEAD REVENUE 22% A$M H1 FY21 H1 FY203 VARIANCE DIGITAL REVENUE SUBSCRIPTION & LICENSING 51.9 41.3 +26% ADVERTISING – O & O 82.5 79.6 +4% O
Slide 20: Publishing Cost Out - Both Structural and Cyclical
PUBLISHING COST OUT - BOTH STRUCTURAL AND CYCLICAL $M 250 Cyclical Structural ($17m) 200 150 -11% 100 Printing 50 Distribution Other production - incl AAP closure Sales & marketing -32% Weatherzone sale 0 H1 FY20 H1 FY21 Production/Distribution Other costs Refer to glossary in Appendix 6 for definit
Slide 21: Stan
STAN Revenue contribution1 – H1 FY21 ACTIVE EBITDA 13% REVENUE GROWTH SUBSCRIBERS GROWTH OF +28% 2.3M CO S T S U P 1 0 % $23M A$M H1 FY21 H1 FY20 VARIANCE REVENUE 149.1 116.6 +28% COSTS 112.6 102.6 +10% EBITDA 36.5 14.0 +161% EBITDA contribution1,2 – H1 FY21 MARGIN 24.5% 12.0% +12.5 PTS 10% • Subscr
Slide 22: Domain
DOMAIN Revenue contribution1 – H1 FY21 A$M, CONTINUING BUSINESS BASIS H1 FY21 H1 FY20 VARIANCE REVENUE RESIDENTIAL 93.5 84.5 +11% MEDIA, DEVELOPERS & COMMERCIAL 22.1 24.2 -9% 7% AGENT SERVICES 11.7 12.2 -4% CORE DIGITAL 127.3 120.8 +5% CONSUMER SOL’NS 2.9 2.6 +13% TOTAL DIGITAL 130.2 123.4 +5% PRINT
Slide 23: Chief Executive Officer
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Slide 24: Nine – Executing Our Digital Future Plan
NINE – EXECUTING OUR DIGITAL FUTURE PLAN CONTENT PLATFORMS COMPETITIVE ADVANTAGE THE KEY TO DISTRIBUTE AND PROMOTE THROUGH BROADCAST PUBLISHING VOD MARKETPLACES Scale – Ability to leverage multiple Content decisions based on Efficient delivery Migration to digital Continued Leveraging Nine’s platfor
Slide 25: CY20 Enabled Nine to Bring Forward Its Strategic Plan
CY20 ENABLED NINE TO BRING FORWARD ITS STRATEGIC PLAN FREE TO AIR ON DEMAND PUBLISHING We expect Metro FTA ad spend to settle at Audiences and subscriptions have rebased Growth in digital audiences particularly or above pre-COVID trend levels at higher levels, and continue to grow focused on premium
Slide 26: Key Drivers to H2 FY21
KEY DRIVERS TO H2 FY21 BROADCAST 9NOW PUBLISHING STAN DOMAIN FTA market conditions BVOD market continuing Growing digital and Subscriber momentum Significant leverage to remain buoyant with Q3e to grow strongly subscription base returning after improving property cycle low-mid single digit ad consol
Slide 27: Appendices
FY21 INTERIM RESULTS APPENDICES
Slide 28: Appendix 1: Combined Group Divisional Results
APPENDIX 1: COMBINED GROUP DIVISIONAL RESULTS BROADCAST H1 FY21, A$M PUBLISHING STAN DOMAIN CORPORATE ASSOCIATES INTERSEGMENT TOTAL (INCL 9NOW) REVENUE 621.5 263.4 149.1 136.9 1.1 - (9.2) 1,162.8 PCP 630.8 288.3 116.6 147.0 9.2 - (9.4) 1,182.5 % CHG -1% -9% +28% -7% -88% - +2% -2% EBITDA 207.4 68.1
Slide 29: Appendix 2: Publishing Group Results
APPENDIX 2: PUBLISHING GROUP RESULTS H1 FY20 SALES A$M METRO SYNDICATION 9 DIGITAL H1 FY20 CALC H1 FY21 REPRESENTATION MEDIA1 DIGITAL REVENUE SUBSCRIPTION & 37.0 +4.3 - 41.2 51.9 LICENSING ADVERTISING 36.2 57.4 (14.0) 79.6 82.5 WEATHERZONE 2.9 - 2.9 OTHER 17.1 (4.3) - +14.0 26.8 15.0 PRINT REVENUE S
Slide 30: Appendix 3: Minority Interests
APPENDIX 3: MINORITY INTERESTS A$M H1 FY21 H1 FY20 MACQUARIE RADIO (54.4% UNTIL COMPLETION) - 1.3 DOMAIN (59.0%) 9.2 7.9 TOTAL MINORITIES, CONTINUING BUSINESSES, PRE SPECIFIC ITEMS 9.2 9.2 30 30
Slide 31: Appendix 4: Impact of COVID-19
APPENDIX 4: IMPACT OF COVID-19 JobKeeper: The JobKeeper allowance was again received for Pedestrian TV, Drive, Nine Events and Domain, as detailed below. These payments were accounted as an offset to expenses. As announced with the result, the Company has subsequently resolved to return the componen
Slide 32: Appendix 5: Forward Estimates
APPENDIX 5: FORWARD ESTIMATES FY21 FY22 CORPORATE COSTS – WHOLLY OWNED ~$25M TO 27M ~$27M TO 32M DEPRECIATION & AMORTISATION - REPORTED ~$155M TO 160M ~$170M TO 180M INTEREST EXPENSE - REPORTED ~$25M TO $30M TAX RATE - REPORTED ~30% ~30% CAPEX (EX DOMAIN) ~$90M (incl ~$30m FOR NORTH SYDNEY MOVE) ~$5
Slide 33: Appendix 6: Glossary
APPENDIX 6: GLOSSARY Broadcast –Broadcast comprises Nine Network, 9Now and divided by wholly owned Group EBITDA plus dividends UA – Unique Audience Nine Radio. received (last 12 months) VOZ - VirtualOZ BVOD – Broadcast Video on Demand Net Profit after Tax (NPAT) – Net profit after tax, before Cash c
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Nine Entertainment Co. Holdings — H1 FY2021 Earnings Presentation on 6ix