Reservoir Media, Inc.. · NASDAQ:RSVR
Reservoir Media, Inc — Investor Presentation (November 2024)
34 slides from Reservoir Media, Inc's investor presentation, Nov 13, 2024
Slide 1: Investor Presentation November 2024
I NVES TOR PR ESENTATI ON Novem ber 2024
Slide 2: Forward Looking Statements
Forward Looking Statements This presentation contains “forward-looking statements” for purposes of the safe harbor provisions under the U.S. Private securities litigation reform act of 1995, as amended. These forward-looking statements are generally identified by words such as “anticipate,” “believe
Slide 3: Disclaimer
Disclaimer 3 Industry and Market Data The information in this presentation also includes information provided by third parties. None of Reservoir, its affiliates or any third parties that provide information to Reservoir or its affiliates, such as market research firms, guarantee the accuracy, compl
Slide 4: First U.S.-Based Publicly Traded Independent Music Company
First U.S.-Based Publicly Traded Independent Music Company • NASDAQ: RSVR $8.11 (at 9/30/24) • Market Cap: $528M (at 9/30/24) • Fiscal Year End: Mar 31st • Shares Outstanding: 65M • 150K+ Copyrights • 36K+ master recordings • Offices in NYC (HQ), LA, Nashville, London, Toronto, & Abu Dhabi KEY FACTS
Slide 5: Compelling Investment Highlights
1 As of 09-30-24 2 Wall Street Research 3 Based on 80% of LTM as of 06/30/24 Net Publisher Share (NPS) and Net Label Share (NLS) Compelling Investment Highlights Leading Independent Music Company With Proven Platform • $956M of invested capital since inception1 • $778M of that amount in acquisitions
Slide 6: Music industry ecosystem: publishing and recorded music
Music 101 MUSIC PUBLISHING SONGWRITERS PUBLISHER ARTISTS PERFORMING RIGHTS FOREIGN SUB-PUBLISHERS RECORD LABELS ORGANIZATIONS DIGITAL SERVICES THIRD PARTIES The YouTube • CATALOG • FUTURES RECORDED MUSIC CONSUMERS PLATFORMS RECORD LABEL ARTISTS The YouTube 6
Slide 7: History of Growth
History of Growth 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | eviews yt Tee JAMIE HARTMAN JOEY BADAS$ ALI TAMPOS! MIGos Al , dim HARPER JONIMITCHELL © OAKFELDER NICK LEE 2 CHAINZ WIT DA HOODIE ROSTER SIGNINGS a Rex = 2 ax Towily Boy a ‘ Laas RECORDS m 2 WT REVEReMusi
Slide 8: Music Publishing segment overview
Digital 56% Performance 22% Synch 16% Mechanical 3% Other 3% Legacy: • Joni Mitchell • The Isley Brothers • John Denver • Billy Strayhorn • Commodores Active Songwriters: • Offset (Migos) • Ali Tamposi • 2 Chainz • Oak Felder • Jamie Hartman CATALOG EXAMPLES Music Publishing represented Reservoir’s
Slide 9: Music Publishing Top 10 Songs by NPS
“Take Me Home, Country Roads” John Denver 0.8%, (1971) “Shout” The Isley Brothers 1.0%, (1974) “It’s Your Thing” The Isley Brothers 1.0%, (1969) 1 5 9 2 6 10 3 7 4 8 “Bring Me To Life” Evanescence 0.7%, (2003) “Yeah!” Usher 0.7%, (2004) “Gimme More” Britney Spears 1.2%, (2007) “Disco Inferno” The Tr
Slide 10: Recorded Music Segment Overview
Reservoir’s first foray into the recorded music business initially was in 2012 with the acquisition of Philly Groove. Reservoir expanded its recorded music segment through the acquisition of Blue Raincoat (incl. Chrysalis Records) in 2019 and Tommy Boy Music in 2021. REVENUE MIX2 Digital 67% Physica
Slide 11: Recorded Music Top 10 Tracks by NLS
348 Recordings Account For 80%of LTM NLS2 with No Track Accounting For More Than 4% of LTM NLS Recorded Music Top 10 Tracks by NLS1 1 LTM Net Label Share (NLS) as of 06-30-24 2 Excluding Album/Compilation sales 11 “Gangsta’s Paradise” Coolio 3.9%, (1995) 1 5 9 2 6 10 3 7 4 8 “For The Love of You” Th
Slide 12: Growth Drivers
Growth Drivers 12 STRONG SECULAR TAILWINDS VALUE ENHANCEMENT INITIATIVES PROVEN M&A PLATFORM & NEW SIGNINGS OPERATING LEVERAGE & CASH FLOW GENERATION
Slide 13: Music Industry: Strong Secular Tailwinds
Rise of Digital & Availability of Streaming Digital Revenue CAGR: 11% (2023-2030) Growth Of Paid Streaming Subscribers Paid Subs CAGR: 9% (2023-2030) Growth Of Streaming In Emerging Markets EM paid subscribers to go from making up 43% of all paid subscribers up to 52% by 2030 Increased Government In
Slide 14: Music Industry: Strong Growth Forecasted
1 Wall Street Research (based on Net Revenue) Music Industry: Strong Growth Forecasted RECORDED LIVE PUBLISHING 14 INDUSTRY Recorded Music Live Music Publishing Paid Streaming Subs $65B $28B $28B $9B 663M 2023 43% 43% 14% $104B $50B $39B $15B 1.2B CAGR 7% 9% 5% 8% 9% 2030 48% 38% 14%
Slide 15: Value Enhancement Initiatives
VALUE ENHANCEMENT SYNCHRONIZATION Placement of musical compositions into television, film, advertisements, gaming platforms, and toys DIGITAL LICENSING Digital licensing partnerships with content platforms and in-home fitness brands SETTLEMENTS Representation on industry boards advocating for creato
Slide 16: Value Enhancement Examples & Industry Advocacy
“Higher” – Creed “Never Get Old” – Sinéad O’Connor “Come Baby Come” – K7 “Let There Be Love” – Peggy Lee “Dancing With Myself” – Generation X Top Synch Highlights1 Industry Advocate & Leader $18M GENERATED IN SETTLEMENT PAYMENTS Over the Past Five Years (FY20-FY24) Value Enhancement Examples & Indus
Slide 17: Proven M&A Platform
$778M CAPITAL DEPLOYED since inception1 95% of GROSS PROFIT & COST SYNERGIES FLOW to EBITDA2 12% UNLEVERED IRR since 20073 1 As of 09-30-24 2 For the period FY18-FY24 3 IRR represents a net return on invested capital since inception (2007) by the majority shareholder marking the investment to market
Slide 18: Proven M&A Platform: bought-down multiples
Note: Reflects transactions of +$7M in value that are at least 12 months old as of 03-31-24 and did not contain young assets expected to decay at closing Proven M&A Platform 15.5x WEIGHTED AVERAGE ENTRY MULTIPLE 3.8x WEIGHTED AVERAGE REDUCTION IN MULTIPLE VALUE ENHANCEMENT LEADS TO BOUGHT-DOWN MULTI
Slide 19: New Roster Signings
Advance funds to established songwriters who are then under exclusive contract to create music with the benefit of long-term ownership. NOTABLE SIGNINGS $178M+ CAPITAL DEPLOYED1 3 YEAR TYPICAL TERM CONTRACT • Joe Walsh • Ali Tamposi • Kings of Leon • Steph Jones • Killer Mike • Oak Felder • Offset •
Slide 20: New Roster Signings: futures-based investments lead to high IRR
As of 03-31-24, writer and artist signings with more than $2.5M invested IRRs based on actual performance to date and projected performance through end of deal New Roster Signings 7.2x EFFECTIVE CURRENT MULTIPLE 21.1% IRR ON SIGNIFICANT WRITER SIGNINGS 20 FUTURES BASED INVESTMENTS LEAD TO HIGH IRR D
Slide 21: Operating Leverage & Cash Flow Generation
• Asset light model • Limited incremental expenses needed as new catalogs are added • Tommy Boy acquisition expanded platform in U.S. for Recorded Music Core Infrastructure Provides Substantial Operating Leverage as the Business Grows > 95% of Acquired Gross Profit Should Fall to Adj. EBITDA1 THREE
Slide 22: Financials
Financials 22
Slide 23: Q2 Fiscal Year 2025 Results
$26 $29 $12 $12 Q2'FY24 Q2'FY25 Publishing Recorded Music & Other REVENUE ($M) $16 $18 Q2'FY24 Q2'FY25 ADJUSTED EBITDA ($M) Q2 Fiscal Year 2025 Results 6% total revenue growth year-over-year • Music Publishing revenue rose 10% year-over-year • Recorded Music revenue decreased 1% year-over-year Narro
Slide 24: Strong Growth Track Record & Forecast – Reiterated Fiscal Year 2025 Outlook
Strong Growth Track Record & Forecast – Reiterated Fiscal Year 2025 Outlook ($ in millions) Current Fiscal 2025 Outlook Growth (at mid-point) REVENUE $150 - $153 5% ADJUSTED EBITDA $59 - $62 9% $77 $84 $96 $31 $38 $49 FY2022 FY2023 FY2024 Publishing Recorded Music & Other $108 $122 $145 REVENUE • St
Slide 25: Improving Profitability
25 Note: Excludes the effect of any non-cash stock-based compensation expense related to the current stock incentive plan. $64 $74 $89 FY2022 FY2023 FY2024 GROSS PROFIT $41 $46 $56 FY2022 FY2023 FY2024 ADJUSTED EBITDA Improving Profitability $MM $MM
Slide 26: Solid Balance Sheet & Strong FCF Generator
$40 $54 $53 FY2022 FY2023 FY2024 $MM ADJUSTED FREE CASH FLOW1 1 Operating cash flows, less advances 2 Total Debt is gross debt, less deferred financing costs 3 Net Debt is gross debt, less deferred financing costs, less cash (after de-SPAC) BALANCE SHEET METRICS as of 9-30-24 TOTAL DEBT2 : $324M CAS
Slide 27: Appendix
Appendix 27
Slide 28: Music Publishing
Music Publishing 101 IP RIGHTS: • Songs owned by publisher or songwriter • Catalog = previously released songs • Futures = songwriters under active contract who are writing new songs PROTECTED ASPECT OF WORK: • Notes & lyrics RESPONSIBILITY OF PUBLISHER: Monetization & Exploitation • Catalog: identi
Slide 29: Recorded Music
Recorded Music 101 IP RIGHTS: • Collection of master recordings owned by a record label or performing artist PROTECTED ASPECT OF WORK: • Sound recording of a composition RESPONSIBILITY OF RECORD LABEL: Monetization & exploitation • Identify songs and work with producers and artists to create, market
Slide 30: RSVR Financial Model
RSVR Financial Model 101 INFRASTRUCTURE PROVIDES SUBSTANTIAL OPERATING LEVERAGE, ALLOWING US TO ACQUIRE THE GROSS PROFIT CONTRIBUTION OF ADDITIONAL CATALOGS WITHOUT INCREMENTAL EXPENSE 30 REVENUE MUSIC PUBLISHING RECORDED MUSIC Revenue / Gross Royalties LESS: Writer Royalties Net Publisher Share (NP
Slide 31: Income Statement Highlights
FISCAL YEAR END: March 31($ in M) 2020A 2021A 2022A 2023A 2024A Publishing Revenue $53 $66 $77 $84 $96 Recorded & Other Revenue $9 $14 $31 $38 $49 Total Revenue $62 $80 $108 $122 $145 Percentage Growth YoY 38% 29% 35% 13% 18% Net Publisher Share $28 $37 $42 $45 $54 Net Label Share & Other $7 $10 $22
Slide 32: Cash Flow & Balance Sheet Highlights
FISCAL YEAR END: March 31 ($ in M) 2020A 2021A 2022A 2023A 2024A Cash Flow Highlights Adj. EBITDA $23 $32 $41 $46 $56 Recoupments 14 13 13 13 14 Interest, W/C Changes & Other (5) (9) (14) (5) (17) Cash From Operating (Adj. FCF) $32 $35 $40 $54 $53 Acquisitions (108) (119) (197) (72) (50) Advances &
Slide 33: Consolidated EBITDA Reconciliation
FISCAL YEAR END: March 31 ($ in M) 2020A 2021A 2022A 2023A 2024A Net Income $ 9.4 $ 9.3 $13.1 $2.8 $0.8 Adjustments Depreciation & Amortization 9.1 14.1 19.0 22.1 25.0 Income Tax Expense / (Benefit) 4.0 2.1 4.3 5.6 0.3 Interest Expense 5.8 9.0 10.9 14.8 21.1 EBITDA $ 28.3 $ 34.5 $47.3 $45.2 $47.2 Op
Slide 34: PR Contact and IR Contact
PR Contact Suzanne Arrabito Reservoir sa@reservoir-media.com | 212-675-0541 34 IR Contact Jackie Marcus Alpha IR Group RSVR@alpha-ir.com | 312-445-2870
Reservoir Media — Investor Presentation (November 2024) on 6ix