Nine Entertainment Co. Holdings Limited · ASX:NEC
Nine Entertainment — FY2021 Earnings Presentation
36 slides from Nine Entertainment's earnings presentation, Aug 25, 2021
Slide 1: 2021 Financial Year Results
Slide 2: Important Notice and Disclaimer
Important Notice and Disclaimer Forward looking statements can generally be identified by Nothing contained in this presentation nor any information This document is a presentation of general background the use of forward looking words such as, ‘expect’, made available to you is, or shall be relied
Slide 3: Mike Sneesby, Chief Executive Officer
MIKE SNEESBY CHIEF EXECUTIVE OFFICER 3
Slide 4: Operational Highlights
OPERATION AL HIGHLIGHT S AD MARKET GROW TH S TRONG AUDIENCE RESULT S TELEVISION COMBINED IN GROW TH Television leads the ad Across all platforms – Growth in revenue and market recovery, as Broadcasting, Streaming, profitability for TV Combined – advertisers focus on brand Publishing & Marketplaces C
Slide 5: Total Television Drives Profit Growth
TOTAL TELEVISION DRIVES PROFIT GROW TH $M TOTAL TV +$145M TV COMBINED +$137M (15.5) +0.1 +25.7 Refer to glossary in Appendix 6 for definitions. Totals may not add due to rounding IFRIC adjusted 5
Slide 6: Digital Growth Continues
DIGITAL GROW TH CONTINUES EBITDA, $M REVENUE, $M 300 1000 DIGITAL REVENUE +19% TO 39%1 OF GROUP REVENUE 900 250 800 700 200 600 150 500 DIGITAL EBITDA 400 +41% TO 44%1 100 OF GROUP EBITDA 300 200 50 100 0 0 FY19 FY20 FY21 Digital EBITDA Domain Digital EBITDA Total Digital revenue Digital includes 9N
Slide 7: Maria Phillips, Chief Financial Officer
MARIA PHILLIPS CHIEF FINANCIAL OFFICER 7
Slide 8: Group Results
GROUP RESULT S GROUP GROUP GROUP FY REVENUE EBITDA COSTS DIVIDEND $2,332M $565M $1,767M 10.5 CPS (+8%) (+43%) (~UNCH’D) (+3.5CPS) A$M FY21 FY20 VARIANCE REVENUE1 2,331.5 2,155.3 +8% GROUP EBITDA1 564.7 394.8 +43% EBIT1 415.6 249.1 +67% GROUP NPAT, PRE MINORITIES1 277.5 157.7 +76% GROUP NPAT, AFTER M
Slide 9: Specific Items
SPECIFIC ITEMS A$M H1 FY21 H2 FY21 FY21 DOMAIN - REFER DOMAIN ACCOUNTS (ASX:DHG), 17TH AUG 2021 - (7.0) (7.0) IMPAIRMENT OF GOODWILL & OTHER INTANGIBLES - (61.5) (61.5) IMPAIRMENT OF OTHER ASSETS (5.3) (2.9) (8.2) RESTRUCTURING COSTS (2.6) (19.3) (21.9) NET PROFIT ON SALE OF ASSETS HELD FOR SALE - 8
Slide 10: Cash Flows
CASH FLOWS CASH FY21 CONVERSION 1 CAPEX 96% $76M (INCL. $25M FOR SYDNEY MOVE) A$M, WHOLLY-OWNED H1 FY21 REPORTED FY21 REPORTED3 DOMAIN3 FY21 ADJUSTED2 FY20 ADJUSTED1 EBITDA (BEFORE ASSOCIATES) 354.5 563.7 100.6 463.1 304.0 WORKING CAPITAL (65.7) (31.8) (12.1) (19.7) 106.6 ASSOCIATES - 0.1 - 0.1 5.5
Slide 11: Strong Cash Flows Reduce Debt
S TRONG CASH FLOWS REDUCE DEBT $M 100% owned EBITDA Includes ~$25m for Nth Sydney 12.8 (0.9) relocation A$M, AS AT 30TH JUNE WHOLLY OWNED GROUP DOMAIN CONSOLIDATED GROUP INTEREST BEARING LOANS AND BORROWINGS1 248.8 173.1 421.9 LESS: CASH AND CASH EQUIVALENTS (77.7) (94.2) (171.9) NET DEBT/(CASH) 171
Slide 12: Divisionals: FY21 Final Results
DIVISIONALS FY21 FINAL RESULTS 12
Slide 13: Broadcast
BROADCAS T Revenue contribution1 – FY21 A$M FY21 FY20 VARIANCE TELEVISION REVENUE 1,151.8 1,024.9 +12% COMBINED RADIO 90.8 102.6 -11% 53% BROADCAST REV 1,242.6 1,127.5 +10% TELEVISION COSTS 827.7 837.4 -1% COMBINED 4% RADIO 82.4 92.8 -11% EBITDA contribution1,2 – FY21 BROADCAST 910.1 930.2 -2% COSTS
Slide 14: Television Combined - FTA + BVOD
TELEVISION COMBINED - FTA + BVOD TOTAL MARKET LEADING AUDIENCE REVENUE GROW TH OF 12% +14% SHARE FOR A TO $2.9B ACROSS FTA & BVOD 40.1% SHARE A$M FY21 FY20 VARIANCE REVENUE FTA 1,044.7 951.8 +10% 9NOW 107.1 73.1 +46% TOTAL TELEVISION COMBINED 1,151.8 1,024.9 +12% COSTS FTA 794.0 814.0 -2% 9NOW 33.7
Slide 15: Free to Air Television (FTA)
FREE TO AIR TELEVISION (FTA) NO.1 RATINGS METRO FTA H2 FY21 HIGHEST SHARE MARKET 40.3% 2 SHARE MARGIN FOR ALL KEY BUYING +11.5% 1 REVENUE > 10 YEARS DEMOS ~H2 FY19 $M FY21 FY204 VARIANCE FTA REVENUE PREMIUM AD REVENUE 190.0 161.4 +18% OTHER3 854.7 790.4 +8% TOTAL FTA REVENUE 1,044.7 951.8 +10% FTA C
Slide 16: Underlying FTA Costs Down >4%
$M UNDERLYING FTA COS T S DOWN >4% 814.0 vs UK Ashes in FY20 794.0 Waive of charge in FY21 Tournament Return of 777.9 delay in 2021 season post Sales Includes incentives, COVID renegotiated bonuses etc NRL, as well as lower international and local spend -4.4% -2.5% Refer to glossary in Appendix 6 fo
Slide 17: 9Now – Broadcast Video on Demand
9NOW – BROADCAS T VIDEO ON DEMAND DAILY ACTIVE ACCELERATING 46% OF 9NOW SALES USERS GROW TH IN LIVE ATTRACT A PREMIUM +13% 3 STREAMING DUE TO DATA +39% 4 (FROM 40% AT H1) A$M FY21 FY20 VARIANCE REVENUE2 107.1 73.1 +46% COSTS 33.7 23.4 +44% EBITDA 73.4 49.7 +48% MARGIN 68.5% 68.0% +0.5 PTS • FY21 BVO
Slide 18: Radio
RADIO AUDIENCE COSTS DOWN NINE RADIO EBITDA GROW TH 18% (~$18M ) AGENCY SHARE 2 MOMENTUM +11% 1 OVER TWO YEARS +3 PTS RETURNING IN H2 A$M FY21 FY20 VARIANCE REVENUE 90.8 102.6 -11% COSTS 82.4 92.8 -11% EBITDA 8.4 9.8 -14% MARGIN 9.2% 9.5% -0.3 PTS • Broadened demographics, driven by changes to on ai
Slide 19: Stan – Subscription Video on Demand
S TAN – SUBSCRIPTION VIDEO ON DEMAND Revenue contribution1 – FY21 ACTIVE STAN REVENUE SUCCESSFUL OVERALL ARPU 14% SUBSCRIBERS GROWTH LAUNCH OF GROW TH ~2.4M OF 29% STAN SPORT ~7% 3 A$M FY21 FY20 VARIANCE TOTAL REVENUE 311.8 242.1 +29% COSTS – STAN 239.3 211.1 +13% ENTERTAINMENT EBITDA contribution1,
Slide 20: Publishing
PUBLISHING Revenue contribution1 – FY21 DIGITAL SUBSCRIPTION 9% ~45% OF READER REVENUE GROW TH GROW TH REVENUE OF 20% TO IN DIGITAL NOW DIGITAL >$100M ADVERTISING (FROM <40% 3 ) 22% A$M FY21 FY204 VARIANCE DIGITAL REVENUE SUBSCRIPTION & LICENSING 102.8 86.0 +20% ADVERTISING – O & O 149.4 136.6 +9% E
Slide 21: Domain
DOMAIN A$M, CONTINUING BUSINESS BASIS FY21 FY20 VARIANCE REVENUE RESIDENTIAL 195.3 161.6 +21% Revenue contribution1 – FY21 MEDIA, DEVELOPERS & COMMERCIAL 46.0 43.0 +7% AGENT & PROPERTY DATA SOLUTIONS 24.2 22.4 +8% CORE DIGITAL 265.5 227.0 +17% 8% CONSUMER SOL’NS 5.5 5.6 -1% TOTAL DIGITAL 271.0 232.6
Slide 22: Mike Sneesby, Chief Executive Officer
MIKE SNEESBY CHIEF EXECUTIVE OFFICER 22
Slide 23: Our Digital Plan Is Focussed on Creating Shareholder Value
OUR DIGITAL PLAN IS FOCUSSED ON CREATING SHAREHOLDER VALUE BROADCAST STREAMING PUBLISHING MARKETPLACES ↓ ↓ ↓ ↓ ↓ Accelerating growth of TV Combined Growing ownership & Accelerating shift to Supporting broader with incremental streaming audiences control of content digital reader revenues marketplace
Slide 24: TV Combined Has Reached an Inflexion Point
T V COMBINED HAS REACHED AN INFLEXION POINT REVENUE 2019 2020 2021 2022 2023 2024 2025 FTA BVOD OPPORTUNITY TO ACCELERATE 9NOW’S GROWTH • Growth of live streaming improving the seamless TV Combined sales proposition • Launch of VOZ provides opportunities to accelerate market growth • Further develop
Slide 25: Long Term Opportunity of Total Television
LONG TERM OPPORTUNITY OF TOTAL TELEVISION SPORT DRAMA REALIT Y NEWS & CURRENT AFFAIRS BROAD CATALOGUE 25
Slide 26: Stan Sport Delivers Long Term Incremental Value
S TAN SPOR T DELIVERS LONG TERM INCREMENTAL VALUE • Successful launch with 250,000 active SUBSCRIBERS subscribers • ~40% incremental to Stan (new or reactivated) • 7% growth in overall Stan ARPU (3 months to ARPU June over PCP) • Sport + higher uptake of premium • Sport subscribers view ~20% more St
Slide 27: Stan Sport Delivers Total TV Benefits
S TAN SPOR T DELIVERS TOTAL T V BENEFIT S Total People 2500 2000 Incremental Ratings 1500 • No.1 Total People 40.6% share 1000 • No.1 25-54s 40.2% share 500 • Estimates include added 2.3pts of share in Total People and 2.3 0 Wimbledon Women's final Rugby - Wallabies vs France pts share to 25-54s Met
Slide 28: Trading Update & Key FY22 Drivers
TRADING UPDATE & KEY FY22 DRIVERS FTA & RADIO 9NOW S TAN PUBLISHING DOMAIN FTA market conditions BVOD continues to grow Strong revenue Growing digital and Underlying property market remain strong strongly momentum subscription base remains strong Nine’s Q1 FTA ad revenue 9Now revenue in July up Grow
Slide 29: Appendices
APPENDICES FY21 FULL YEAR RESULTS 29
Slide 30: Appendix 1: FY21 IFRIC Adjusted Group Divisional Results
APPENDIX 1: FY21 IFRIC ADJUSTED GROUP DIVISIONAL RESULTS BROADCAST FY21, A$M PUBLISHING STAN DOMAIN CORPORATE ASSOCIATES TOTAL (INCL 9NOW) EBITDA - REPORTED 332.5 117.2 39.5 100.6 (26.1) 1.0 564.7 IFRIC ADJ 0.1 - - 1.5 - - 1.6 EBITDA - PRE IFRIC 332.6 117.2 39.5 102.1 (26.1) 1.0 566.3 PCP 197.3 92.0
Slide 31: Appendix 2: FY20 IFRIC Adjusted Group Divisional Results
APPENDIX 2: FY20 IFRIC ADJUSTED GROUP DIVISIONAL RESULTS BROADCAST FY20, A$M PUBLISHING STAN DOMAIN CORPORATE ASSOCIATES TOTAL (INCL 9NOW) EBITDA - REPORTED 197.3 91.5 31.0 84.7 (10.6) 0.9 394.8 IFRIC ADJ 0.1 0.5 - 1.3 - - 1.9 EBITDA - PRE IFRIC 197.4 92.0 31.0 86.0 (10.6) 0.9 396.7 EBIT - REPORTED
Slide 32: Appendix 3: Reconciliation of Digital Revenues
APPENDIX 3: RECONCILIATION OF DIGITAL REVENUES A$M FY20 IFRIC1 COGS2 FY20 ADJ FY21 IFRIC1 COGS2 FY21 ADJ 9NOW REVENUE 81.7 - (8.6) 73.1 118.1 - (11.0) 107.1 COSTS (32.0) - 8.6 (23.4) (44.7) - 11.0 (33.7) EBITDA 49.7 - - 49.7 73.4 - - 73.4 PUBLISHING REVENUE 525.2 - (6.7) 518.5 511.1 - (6.6) 504.5 CO
Slide 33: Appendix 4: Publishing Group Results
APPENDIX 4: PUBLISHING GROUP RESULTS FY20 METRO SALES A$M SYNDICATION 9 DIGITAL FY20 CALC FY21 MEDIA1 REPRESENTATION DIGITAL REVENUE SUBSCRIPTION & 77.3 8.7 - - 86.0 102.8 LICENSING ADVERTISING 67.7 - 92.2 (23.3) 136.6 149.4 WEATHERZONE 2.9 - - - 2.9 - OTHER 28.0 (8.7) - 23.3 42.6 28.1 PRINT REVENUE
Slide 34: Appendix 5: Forward Estimates
APPENDIX 5: FORWARD ESTIMATES ITEM FY22 CORPORATE COSTS – WHOLLY OWNED ~$30M TO 34M DEPRECIATION & AMORTISATION - REPORTED ~$160M TO 170M INTEREST EXPENSE - REPORTED $25-30M TAX RATE - REPORTED ~30% CAPEX (EX DOMAIN) ~$65 TO 75M 60-80% OF NET PROFIT AFTER TAX, BEFORE SPECIFIC ITEMS DIVIDEND Refer to
Slide 35: Appendix 6: Glossary
APPENDIX 6: GLOSSARY Broadcast –Broadcast comprises Nine Network, 9Now and Key demographics – All People 25-54, 16-39, 18-49 and Publishing – comprises mastheads, nine.com.au, Pedestrian Nine Radio. Grocery Buyers with Children and Drive BVOD – Broadcast Video on Demand Metro – Sydney, Melbourne, Br
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Nine Entertainment Co. Holdings — FY2021 Earnings Presentation on 6ix