Slide 1: Q2 2023 Earnings
Q2 2023 Earnings August 3, 2023 1
Slide 2: Disclaimer and Notes
Disclaimer and Notes In General. This disclaimer applies to this document and the verbal or written comments of any person presenting it. This document, taken together with any such verbal or written comments, is referred to herein as the “Presentation.” Gannett Co., Inc. is referred to in this Pres
Slide 3: Scalable, data-driven digital media platform
Gannett operates a scalable, data-driven digital media platform that aligns with consumer and digital marketing trends. We are a subscription-led and digitally-focused media and marketing solutions company that is committed to empowering communities to thrive. Our strategy is focused on driving audi
Slide 4: Key Stats and Value Drivers
Key Stats and Value Drivers Executed on Growth Segments and Investment Strategy in Q2 2023 Drive Digital Subscription Drive Digital Marketing Value Drivers Growth Solutions (DMS) Growth $37.9M $121.6M $15.1M (4) Digital-only Subscription Revenues DMS Core Platform Revenues Total Debt Paydown 17.3% Y
Slide 5: Q2 2023 Results and Non-GAAP Highlights
Q2 2023 Results and Non-GAAP Highlights(1) Significant Improvement in Key Financial Metrics Revenues Adjusted EBITDA o $672.4M Total Operating Revenues o $71.2M Adjusted EBITDA o Same store revenues(1) improved to down 8.6% compared to o Adjusted EBITDA up $20.3 million, or 39.9%, compared to the th
Slide 6: Balance Sheet and Liquidity
Balance Sheet and Liquidity Q2 2023 Significant Debt Repayment Q2 2023 Cash on the balance sheet of $106.6 million at the end of Q2 2023 $1,759M $1,575M Total debt principal outstanding at June 30, 2023 of $1,219.7 million $1,369M Net leverage ratio(1) of 4.03x $1,272M $1,235M $1,220M − First Lien N
Slide 7: Business Outlook
Business Outlook(1) The Company Raises its Full Year 2023 Outlook (6) Full Year 2023 Outlook Prior Full Year 2023 Outlook Revenues $2.75B to $2.80B $2.75B to $2.80B Same store total revenues Year-over- (5%) to (3%) (5%) to (3%) Year(2)(4)(5)(non-GAAP basis) Net income (loss) attributable to Gannett
Slide 8: Key Operating Pillars
Key Operating Pillars Second Quarter 2023 Update 8
Slide 9: Key Operating Pillars
Key Operating Pillars Strong opportunities for creating stakeholder value Drive digital Drive Digital Optimize our Prioritize Build ESG efforts, subscription Marketing legacy circulation investments including ID&E, growth Solutions and advertising in growth to foster culture (DMS) growth businesses
Slide 10: Gannett's Operating Segments
Gannett’s Operating Segments Our two distinct reportable segments(1) align well with our strategic pillars and are consistent with our long- term transformation to a subscription-led and digitally-focused media and marketing solutions company Gannett’s top fiscal priorities: Revenue, Adjusted EBITDA
Slide 11: Gannett Media: Drive Digital Subscription Growth
Gannett Media: Drive Digital Subscription Growth Driving growth through trusted and unbiased content, data analytics, and improved product experience Digital-only Subscription(1) Growth Digital-only Subscription Revenue Growth $2,500,000.00 $12.00 $40.00 $37.9M $34.5M $35.5M $35.8M 1.98M 2.03M 2.02M
Slide 12: Digital Marketing Solutions: Drive DMS Growth
Digital Marketing Solutions: Drive DMS Growth Digital Marketing Solutions – Driving Growth and Further Value for our Shareholders Our DMS business is focused on: Helping SMBs (1) Build their online presence, (2) Drive awareness & leads, (3) Manage & nurture leads and (4) Measure what works While gro
Slide 13: Digital Marketing Solutions: Drive DMS Growth
Digital Marketing Solutions: Drive DMS Growth Digital Marketing Solutions - Core Platform Revenues (M) (1) Average Customer Count (K)(2) $119.7 $121.6 16.2 15.8 $116.4 $118.7 15.3 14.7 15.3 $111.4 Q2 22 Q3 22 Q4 22 Q1 23 Q2 23 Q2 22 Q3 22 Q4 22 Q1 23 Q2 23 Q2 2023 – 4.4% growth YOY ARPU(2) Customer
Slide 14: Appendix
Appendix 14
Slide 15: Diversified Revenues
Gannett Diversified Revenues(1) Q2 2023 ($ in millions) Q2 2023 % of Total Print Advertising Revenues(2) $149.3 22.2% Digital Marketing Services $122.5 18.2% Digital Media $68.0 10.1% Digital Classified $13.5 2.0% Total Digital Advertising and Marketing Services $204.0 30.3% Revenues(2) Digital-only
Slide 16: Debt and Leverage Overview
Debt and Leverage Overview ($ in millions) Rate Balance as of June 30, 2023 2024 Notes 4.75% $3.3 2027 Notes 6.0% $485.3 Senior Secured Term Loan (due 2026)(1) 10.27%(2) $392.0 2026 Senior Notes 6.0% $339.1 Total Debt Outstanding 7.37% Blended Rate $1,219.7 Q2 2023 LTM Adjusted EBITDA(3) $276.3 Cash
Slide 17: Same Store Year-over-Year Revenues Metrics
Same Store Year-over-Year Revenues Metrics(1) FY 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 FY 2022 Q1 2023 Q2 2023 Print Advertising -8.9% -7.0% -11.3% -12.1% -16.8% -11.9% -10.7% -8.9% Digital Advertising and Marketing 7.1% 4.4% -3.5% -7.8% -4.3% -3.0% -3.7% -2.3% Services Advertising and Marketing Serv
Slide 18: Non-GAAP Reconciliation
Non-GAAP Reconciliation The Company uses non-GAAP financial performance and liquidity measures to supplement the financial information presented on a U.S. GAAP basis. These non-GAAP financial measures, which may not be comparable to similarly titled measures reported by other companies, should not b
Slide 19: Key Performance Indicators
Key Performance Indicators A key performance indicator ("KPI") is generally defined as a quantifiable measurement or metric used to gauge performance, specifically to help determine strategic, financial, and operational achievements, especially compared to those of similar businesses. We define Digi
Slide 20: Same Store Non-GAAP Revenues Reconciliation
Gannett Same Store Non-GAAP Revenues Reconciliation(1) Total Digital and Digital-only Subscription Revenues 3 months ended 3 months ended % (in thousands) $ Variance June 30, 2023 June 30, 2022 Variance Total Digital Revenues $262,103 $261,768 $355 0.1% Acquired revenues - - Currency impact 714 - Ex
Slide 21: Non-GAAP Reconciliation: Adjusted EBITDA
Gannett Non-GAAP Reconciliation(1) Adjusted EBITDA Total Company Total Company 3 months ended 3 months ended (in thousands) (in thousands) June 30, 2023 June 30, 2022 Net loss attributable to Gannett ($12,677) Net loss attributable to Gannett ($53,688) Provision for income taxes 1,333 Provision for
Slide 22: Non-GAAP Reconciliation: DMS Adjusted EBITDA
Gannett Non-GAAP Reconciliation(1) Adjusted EBITDA Digital Marketing Solutions Segment Digital Marketing Solutions Segment 3 months ended 3 months ended (in thousands) (in thousands) June 30, 2023 June 30, 2022 Net income attributable to Gannett $9,273 Net income attributable to Gannett $4,306 Depre
Slide 23: Non-GAAP Reconciliation: LTM Adjusted EBITDA
Gannett Non-GAAP Reconciliation(1) LTM Adjusted EBITDA Gannett Media Segment Digital Marketing Solutions Segment LTM ended LTM ended (in thousands) (in thousands) June 30, 2023 June 30, 2023 Net income attributable to Gannett $121,519 Net income attributable to Gannett $32,252 Non-operating pension
Slide 24: Non-GAAP Reconciliation: Corporate and Other LTM
Gannett Non-GAAP Reconciliation(1) LTM Adjusted EBITDA Corporate and Other (in thousands) LTM ended June 30, 2023 Net loss attributable to Gannett ($177,451) Benefit for income taxes (29,198) Interest expense 113,165 Gain on early extinguishment of debt (4,387) Depreciation and amortization 18,053 I
Slide 25: Adjusted Net Income and Free Cash Flow
Gannett Non-GAAP Reconciliation(1) Adjusted Net Income attributable to Gannett and Free Cash Flow 3 months ended 3 months ended (in thousands) (in thousands) June 30, 2023 June 30, 2023 Net loss attributable to Gannett ($12,677) Cash provided by operating activities (GAAP basis) $46,068 Integration
Slide 26: Same Store Reconciliation Q2 2023 and Q1 2023
Gannett Same Store Non-GAAP Revenues Reconciliation(1) Q2 2023 and Q1 2023 Same Store Year-over-Year Revenues Metrics 3 months ended 3 months ended $ % 3 months ended 3 months ended $ % (in thousands) (in thousands) June 30, 2023 June 30, 2022 Variance Variance March 31, 2023 March 30, 2022 Variance
Slide 27: Same Store Reconciliation Full Year 2022 and 2021
Gannett Same Store Non-GAAP Revenues Reconciliation(1) Full Year 2022 and Full Year 2021 Same Store Year-over-Year Revenues Metrics 12 months ended 12 months ended 12 months ended 12 months ended (in thousands) $ Variance % Variance (in thousands) $ Variance % Variance December 31, 2022 December 31,
Slide 28: Same Store Reconciliation Q4 2022 and Q3 2022
Gannett Same Store Non-GAAP Revenues Reconciliation(1) Q4 2022 and Q3 2022 Same Store Year-over-Year Revenues Metrics 3 months ended 3 months ended 3 months ended 3 months ended $ % (in thousands) $ Variance % Variance (in thousands) December 31, 2022 December 31, 2021 September 30, 2022 September 3
Slide 29: Same Store Reconciliation Q2 2022 and Q1 2022
Gannett Same Store Non-GAAP Revenues Reconciliation(1) Q2 2022 and Q1 2022 Same Store Year-over-Year Revenues Metrics 3 months ended 3 months ended 3 months ended 3 months ended $ % (in thousands) $ Variance % Variance (in thousands) June 30, 2022 June 30, 2021 March 31, 2022 March 31, 2021 Variance
Slide 30: Same Store Revenues Reconciliation: Business Outlook
Gannett Same Store Non-GAAP Revenues Reconciliation(1)(2) Business Outlook(3) 12 months ended 12 months ended December 31, 2022 (Est.) December 31, 2023 (Est.) Total Revenues $2.95B(4) $2.75B to $2.80B Acquired revenues - ~($9M) Currency impact - ~($0.2M) Exited operations ($42M) - Same Store Revenu
Slide 31: Non-GAAP Reconciliation – Business Outlook: Adjusted EBITDA
(1)(2) Gannett Non-GAAP Reconciliation – Business Outlook Adjusted EBITDA and Adjusted Net income (loss) attributable to Gannett 12 months ended December 31, 2023 (Est.) Net income (loss) attributable to Gannett ($10M) to $20M Provision for income taxes $10M to $30M Interest expense $105M to $115M N
Slide 32: Non-GAAP Reconciliation – Business Outlook: Free Cash Flow
(1)(2) Gannett Non-GAAP Reconciliation – Business Outlook Free Cash Flow 12 months ended December 31, 2023 (Est.) Cash provided by operating activities (GAAP basis) $130M to $150M Capital Expenditures ~$40M Free cash flow (non-GAAP basis) $90M to $110M 1. Projections are based on Company estimates a