Nine Entertainment Co. Holdings Limited · ASX:NEC
Nine Entertainment — H1 FY15 Earnings Presentation
26 slides from Nine Entertainment's earnings presentation, Feb 26, 2015
Slide 1: Interim Results Briefing
David Gyngell CEO Interim Results Briefing Simon Kelly COO/CFO Peter Wiltshire Group Sales Director 26 February 2015 Geoff Jones MD, Nine Live Alex Parsons MD, Nine Digital
Slide 2: Disclaimer
Disclaimer Important notice and disclaimer expectations, estimates and intentions expressed in such forward This document is a presentation of general background information looking statements and many of these factors are outside the control of about the activities of Nine Entertainment Co. Holding
Slide 3: H1 FY15 result in line with AGM guidance
H1 FY15 result in line with AGM guidance Pro Forma • Profit After Tax1 of $88.8m, in line with $85m-$90m1 AGM $m H1 FY15 H1 FY14 Variance guidance Revenue 829.2 845.6 -1.9% • FTA Revenue impacted by weak advertising environment, Group EBITDA 171.0 188.7 -9.4% partially offset by revenue share gains
Slide 4: Focus on cash and capital management
Focus on cash and capital management Pro Forma H1 FY15 H1 FY14 Variance Operating Free Cash Flow, $m 133.2 178.0 -44.8 Operating Free Cash Flow Conversion 78% 94% -16 pts Capital Expenditure and Purchased -26.0 -26.8 +0.8 Ticketing Rights, $m Pro Forma As at 31 Dec 2014 30 Jun 2014 Variance Net Debt
Slide 5: H1 – solid result in a challenging ad market
H1 – solid result in a challenging ad market Market down 3%, share up Pro Forma $m H1 FY15 H1 FY14 Variance Lower Touring and Events Revenue Network 645.5 649.6 -0.6% contribution Live 102.5 134.6 -23.9% Digital 81.3 61.4 +32.4% Extra quarter of Microsoft default traffic + new revenue initiatives To
Slide 6: television
::television
Slide 7: Nine Network – positive share momentum
Nine Network – positive share momentum Pro Forma $m H1 FY15 H1 FY14 Variance Revenue 645.5 649.6 -0.6% EBITDA 131.8 149.2 -11.7% Margin 20.4% 23.0% -2.6 pts • FTA Metro market decline of 3%1. Trend improving from 5% Q1 decline to 1% decline in Q2 • FTA Regional market down 3%1 in half • Market leade
Slide 8: Revenue share follows ratings improvement
Revenue share follows ratings improvement Nine’s Metro Ratings1 and Revenue2 Share 40.0% 39.0% 38.0% 37.0% 36.0% 35.0% 34.0% 33.0% 32.0% 31.0% 30.0% H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 FY07 FY08 FY08 FY09 FY09 FY10 FY10 FY11 FY11 FY12 FY12 FY13 FY13 FY14 FY14 FY15 Ratings share Revenue s
Slide 9: Programming
Programming News and Current Affairs Sport TO COME Drama TO COME Family Entertainment 9 Refer to glossary in Appendix 4 for definitions of all capitalised terms. Totals may not add due to rounding.
Slide 10: live
live
Slide 11: Nine Live – solid result vs record pcp
Nine Live – solid result vs record pcp $m H1 FY15 H1 FY14 Variance Revenue 102.5 134.6 -23.9% EBITDA 36.0 40.1 -10.2% Margin 35.1% 29.8% +5.3 pts • Revenue decline primarily driven by lower volume of event promotions by Nine Touring and Events • Core Ticketek business slightly weaker reflecting soft
Slide 12: Tough comps – 2nd highest Live result on record
Tough comps – 2nd highest Live result on record Contribution to Nine Live Revenue Ticketek’s ticket volumes - m $m 160 9.0 140 8.0 120 7.0 6.0 100 5.0 80 4.0 60 3.0 40 2.0 20 1.0 0 0.0 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 FY10 FY10 FY11 FY11 FY12 FY12 FY13 FY13 FY14 FY14
Slide 13: Opportunities for Nine Live
Opportunities for Nine Live Ticketing • Average >3 years remaining on top 10 venue contracts • Leveraging long term ticketing contracts International Sport • International Champions Cup (soccer). Each July for 4 years . Year 1 - Manchester City, Real Madrid and AS Roma playing at the MCG in 2015 • F
Slide 14: digital
Daily Pail Australia imagination +tintelligence SERIOUS + POPULAI rae syndrome Police shooting victim ‘acting ike a zombie TERROR ARRE! Neighbour shocked as police raid “quiet” pair's Sydney home
Slide 15: Nine Digital – business transitions and integrates
Nine Digital – business transitions and integrates Underlying Underlying Underlying Pro Forma Pro Forma $m H1 FY15 H1 FY14 Variance H1 FY14 Variance Revenue 81.3 79.4 +2.4% 61.4 +32.4% EBITDA 10.8 13.7 -21.2% 7.8 +38.5% Margin 13.3% 17.3% - 4.0 pts 12.7% +0.6 pts • Underlying revenue growth of 2% un
Slide 16: Under 100% ownership – Digital is evolving
Under 100% ownership – Digital is evolving • Launch of new ninemsn home page in November 2014 • Continuing to bridge TV and Digital • Ongoing success with News • Partnerships and Ventures • Establishment of Data Business • New Opportunities 1 Nielsen January 2015 16 Refer to glossary in Appendix 4 f
Slide 17: Stan launched in late January
Stan launched in late January • 50:50 joint venture with Fairfax Media to launch and operate an Australian SVOD service • Addressable market of >4m subscribers with international experience showing a propensity to subscribe for multiple offerings • Up to $50m committed each, over a number of years t
Slide 18: entertainment co.
entertainment co.
Slide 19: Positive progress on key strategic initiatives
Positive progress on key strategic initiatives Nine Network Nine Digital • Confident of delivering a 40% revenue share • Benefits of consolidation and integration into • Integration of Nine Adelaide and Nine Perth on plan broader group • Healthy sports pipeline incl. Cricket World Cup, Rugby World •
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Slide 21: Appendices
Appendices • Appendix 1: Cash flow • Appendix 2: Cash flow reconciliation • Appendix 3: Debt and leverage calculations • Appendix 4: Glossary 21 Refer to glossary in Appendix 4 for definitions of all capitalised terms. Totals may not add due to rounding.
Slide 22: Appendix 1: Cash flow
Appendix 1: Cash flow Pro Forma $m H1 FY15 H1 FY14 Variance EBITDA 169.3 186.6 -17.3 Change in working capital (37.5) (9.6) -27.9 Distributions from Associates 1.3 1.0 +0.3 Operating Free Cash Flow 133.2 178.0 -44.8 Capital Expenditure and Purchased (26.0) (26.8) +0.8 Ticketing Rights Operating Free
Slide 23: Appendix 2: Cash flow reconciliation
Appendix 2: Cash flow reconciliation Pro Forma $m H1 FY15 H1 FY14 Statutory cashflows from operating activities 133.1 149.9 Statutory interest received (2.3) (2.7) Statutory interest and other costs of finance paid 4.4 29.8 Statutory income tax 4.3 21.3 Statutory Free Cash Flow 139.5 198.3 Impact of
Slide 24: Appendix 3: Debt and leverage calculations
Appendix 3: Debt and leverage calculations Actual Actual As at, $m 31 Dec 2014 30 Jun 2014 Variance Interest bearing loans and 585.0 603.1 -18.1 borrowings1 Cash and cash equivalents (241.6) (219.8) -21.8 Cash held on trust 133.6 126.5 +7.1 Deferred payment related to Mi9 13.6 27.7 -14.1 Net Debt 49
Slide 25: Appendix 4: Glossary
Appendix 4: Glossary • EBITDA – earnings before interest, tax, depreciation and amortisation, from continuing businesses before Specific Items • FTA – free-to-air • FY – full year • Group EBITDA – EBITDA plus share of Associates’ net profit, from continuing businesses before Specific Items • Interes
Slide 26: Nine Entertainment Co.
nine::: entertainment co.
Nine Entertainment Co. Holdings — H1 FY15 Earnings Presentation on 6ix