Sinclair, Inc. · NASDAQ:SBGI
Sinclair — Sinclair Broadcast Group — Barclays High Yield Bond & Syndicated Loan Conference 2016
19 slides from Sinclair's conference presentation, June 2016
Slide 1: Barclays High Yield Bond & Syndicated Loan Conference
Barclays High Yield Bond & Syndicated Loan Conference June 2016
Slide 2: Safe Harbor
Safe Harbor The following information contains, or may be deemed to contain, "forward-looking statements" (as defined in the U.S. Private Securities Litigation Reform Act of 1995). Any statements about our expectations, beliefs, plans, objectives, assumptions or future events or performance are no
Slide 3: Sinclair Broadcast Group – Connecting People With Content
Sinclair Broadcast Group – Connecting People With Content Leader Creator Innovator Free cash flow generator 3
Slide 4: Leading Broadcaster
Leading Broadcaster Only Broadcaster with Economies of Scale, National Reach, and Diversified Asset Base: 173 TV stations 483 channels 81 markets 50 Multi-station markets 77 news markets 44M TV households No market more than 5% of revenue Largest ABC, CBS, FOX, CW, MNT affiliate grou
Slide 5: Creating & Diversifying Content Offerings
Creating & Diversifying Content Offerings 40% 2015 Ad Revenues by Content Type 30% 29% 29% 30% 20% 10% 8% 4% 0% Local News Syndicated Network Local Sports Paid/DR Net Time Sales by Content Type 5
Slide 6: Creating & Diversifying Original Content
Creating & Diversifying Original Content Benefits: Lower programming costs; syndication & streaming rights Local News Over 2,200 hours per week Over 50% of SBG newscasts ranked #1 or #2 in their markets National news show, ‘Full Measure with Sharyl Attkisson’ Circa – next generation digital-
Slide 7: Creating New Sales Channels
Creating New Sales Channels Programmatic/Audience Network: Compete for advertising budgets reserved for cable network buys OxMyx Media Group, Programmatic JV with Visible World Aggregate and sell Sinclair and other broadcasters’ impressions on a national scale across multiple dayparts Automa
Slide 8: Creating Multiple Delivery Platforms
Creating Multiple Delivery Platforms Digital: Break local news on Desktop, Mobile Apps, Social Media Package digital sales with/without linear TV spots Engage Millennials Offer Advertising Agency services Compete for Internet advertising dollars Addressable and dynamic ad insertion 24/7
Slide 9: Creating Multiple Delivery Platforms
Creating Multiple Delivery Platforms Multicast Channels: Leader in over-the-air broadcast channel offerings (473 channels) Digital-only Magazines: Seattle, Cincinnati and D.C. ‘Refined’ digital lifestyle/City magazines Companion TV show 9
Slide 10: Innovating Industry Technology
Innovating Industry Technology Digital Content Management & Video Management Systems: Automate content workflow - Break news first on digital platforms Customizable Mobile Apps with playlist functionality Alarm clock features Dedicated Weather Apps Dynamic ad insertion with addressable ads
Slide 11: Next Generation Broadcast Platform – Pro Consumer
Next Generation Broadcast Platform – Pro Consumer NGBP will allow broadcasters to do what they do today, only BETTER! Provides for mobility IP end-to-end Increases capacity UHD/4K content delivery New business use cases: Targeted advertising Data leasing Subscription-based offerings
Slide 12: NGBP Economics – Sinclair Only
NGBP Economics – Sinclair Only Current Spectrum Future Spectrum Future Spectrum (Additional Channels) (Additional Channels) (Wireless) $1.5bn $154mm $46mm Broadcast Price $.000021 $.000022 $.00022 per Gigabyte Wired / Wireless $0.01 – 0.05 $0.01 – 0.05 $2.00-$3.00 Wholesale Price per Wired Wired Wir
Slide 13: Growing Key Financial Metrics
Growing Key Financial Metrics 2,000 $1,899 4-Year CAGRs (FY2011 – FY2015): 1,800 Net Broadcast Revenue: 33% EBITDA: 28% 1,600 $1,502 Free Cash Flow: 26% 1,400 1,200 $1,071 1,000 $786 800 $718 $652 $592 600 $488-525 (1) $442 $450-488 (1) 400 $341 $371 $273 $320 $179 $238 200 $153 - Avg2010/2011 Avg20
Slide 14: Declining Net Leverage
Declining Net Leverage Great 2013: 7.0 Recession Acquired 58 Pre- 6.3x stations for 2014: 2012: 2016: 6.0 Recession $1.0B Acquired 14 Acquired Acquired 31 stations for 5.4x stations for TC for $1.2B $1.1B 5.0x $350M 5.0 4.7x 4.6x 4.2x 4.3x 4.0x 4.0 Low to Mid-3xs 3.0 2.0 1.0 - 2006 2009 2010 2011 20
Slide 15: Strong Balance Sheet
Strong Balance Sheet No near-term refinancing risk for 2 years Healthy credit statistics Total Net Leverage (‘14/’15 avg) of 4.7x Total Net Leverage (‘15/’16 avg) of 4.0x estimated 5.0% Avg. Cost of Debt Revolver $1,694 Senior Unsecured Notes $950 Term Loans $632 $640 $950 $550 $304 $350 2
Slide 16: Free Cash Flow Generator
Free Cash Flow Generator FCF Metrics Free Cash Flow ($ in Millions) 2016/2017 FCF Yield ~ 16% $469 50% EBITDA conversion for 2015 2016/2017 FCF per share of $5.33 $372 $320 2015 Uses of FCF: $238 18% Acquisitions/Investments $179 17% Dividends 16% Scheduled debt repayment 8% Share repu
Slide 17: Outperforming Equity Returns
Outperforming Equity Returns Ticker: SBGI SBGI: 47% p.a. Market Cap: $2.9B S&P 500: 13% p.a. Enterprise Value: $6.6B Cumulative Equity Performance 2012 - 2016 250% SBGI S&P 500 0% 2012 2013 2014 2015 2016 Source: Yahoo Finance as of May 11, 2016 Shows the cumulative return on SBGI stock and the S&P
Slide 18: Value Drivers
Value Drivers Components Metric Commentary/Opportunities Core Business Core ad – GDP growth $4.74 - $5.13 FCF/share est. All segments growing Net Retrans – Teen growth % average for 2015/2016 Digital – mid-20% growth in $5.13 - $5.53 FCF/share est. 2016E average for 2016/2017 Political
Slide 19: Why Sinclair Broadcast Group
Why Sinclair Broadcast Group Broadcast leader with scale, reach and diversification Original content creator (local news, live sports, first run syndication) Revenue innovator (retrans, Digital CMS, programmatic) Multi-platform distributor (OTA, MVPD, digital, networks, mobile apps) Techno
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