Southern Cross Media Group Limited · ASX:SXL
Southern Cross Media — H1 FY20 Earnings Presentation
27 slides from Southern Cross Media's earnings presentation, Feb 20, 2020
Slide 1: Southern Cross Austereo H1 FY20 Investor Presentation
For personal use only Southern Cross Austereo H1 FY20 Investor Presentation 20 February 2020
Slide 2: Disclaimer
Disclaimer For personal use only Summary information The material in this presentation has been prepared by Southern Cross Media Group Limited ABN 91 116 024 536 (SCA) and contains summary information about SCA’s activities current as at 20 February 2020. The information in this presentation is of a
Slide 3: FY20 Interim Results
For personal use only FY20 Interim Results Grant Blackley
Slide 4: Group Results Summary
GROUP RESULTS SUMMARY For personal use only H1 FY20 H1 FY20 Var. To H1 FY20 • Underlying EBITDA $62.2m – in line with $ millions H1 FY19 (excl AASB16) (Reported) (exc. AASB16) October, 2019 trading update guidance Revenue 308.1 308.1 335.7 (8.2%) EBITDA 67.5 59.3 82.1 (27.7%) • Group revenue down 8.
Slide 5: Headline Achievements
HEADLINE ACHIEVEMENTS For personal use only Sales • National regional advertiser investment boosts revenue – outperforming metro markets Performance • Television affiliation – market leading power ratio further improved with Nine – now 1.11x • Digital audio revenues in podcasting and addressable adv
Slide 6: Cost Base Adjusted
COST BASE ADJUSTED For personal use only • Respecting the weaker advertising conditions in H1 FY20, a thorough and holistic review of operating & capital costs was completed in late H1 FY20 – resulting in: Meaningful savings in labour, discretionary costs and capital expenditure $2.9m of restruc
Slide 7: FY20 Interim Financial Results
For personal use only FY20 INTERIM FINANCIAL RESULTS Nick McKechnie
Slide 8: Group Reported Statutory Results
GROUP REPORTED STATUTORY RESULTS For personal use only H1 FY20 H1 FY20 Var. to H1 FY20 • Group NPAT $20.4m $ millions (exc. H1 FY19 (excl AASB16) (Reported) AASB16) Revenue 308.1 308.1 335.7 (8.2%) – $22.4m excluding AASB16 Expenses (240.6) (248.8) (253.7) (1.9%) • Group revenues down 8.2% - backdro
Slide 9: Cashflow
CASHFLOW For personal use only $ millions H1 FY20 H1 FY19 32.4 56.1 • Free cash conversion of 91.0% remains high Opening Cash Net Cash from Operations 62.2 80.9 given strong quality of assets Leases (7.7) (0.1) • Reduced capex reflects positive impact of Cash from Operations less Leases 54.5 80.8 ou
Slide 10: Balance Sheet
BALANCE SHEET For personal use only • SCAs existing balance sheet strength $m's Net Debt enabled debt funded acquisition of Redwave media 347.8 • $28m purchase price increased net debt to $330.5m 330.5 324.7 • Bank facilities successfully refinanced Redwave Media December 2019: Acquisition $28m Faci
Slide 11: Operational Review
For personal use only OPERATIONAL REVIEW
Slide 12: Operational Review
OPERATIONAL REVIEW For personal use only $ millions H1 FY20 H1 FY19 Var. Audio Revenue 210.9 230.2 (8.4%) Television Revenue 96.2 104.7 (8.1%) Corporate Revenue 1.1 0.9 23.2% Total Revenue 308.1 335.7 (8.2%) Audio Expenses (149.8) (150.0) (0.1%) Television Expenses (83.1) (88.4) (6.0%) Corporate Exp
Slide 13: Audio - Overview
AUDIO - OVERVIEW For personal use only $ millions H1 FY20 H1 FY19 Var. • Underlying EBITDA was back 23.8% to $61.1m Total Revenue 210.9 230.2 (8.4%) delivering an Underlying EBITDA margin of 29.0% Broadcast & Production (12.6) (12.4) 2.3% Employee (78.1) (75.6) 3.3% • Revenues declined 8.4% due to l
Slide 14: Audio – Radio Audiences
AUDIO – RADIO AUDIENCES For personal use only Radio remains a healthy platform – cumulative audiences grow while Time Spent Listening remains stable Market experiencing a cyclical weakness – audio assets are well positioned for market improvement P 10+ NATIONAL CUME VS TSL TABLE Mon-Sun 5:30am - 12:
Slide 15: Audio – Broadcast Advertising Revenues
AUDIO – BROADCAST ADVERTISING REVENUES For personal use only $m's • Metro advertising revenues contracted $15.9m 120.5 or 13.2% with weakness across both local and national markets 104.6 28.6 94.2 • Regional advertising revenues declined $5.4m 24.6 88.8 or 5.7% - highlighting resilience of this impo
Slide 16: Audio – Redwave Radio Acquisition
AUDIO – REDWAVE RADIO AQUISITION For personal use only • Important acquisition – taking SCA’s network to 96 stations across Australia – the largest Radio Group in Australia • $28.0m Redwave acquisition further extends network coverage across Western Australia- with an additional 8 radio stations acr
Slide 17: Digital Audio Is Expanding Rapidly
DIGITAL AUDIO IS EXPANDING RAPIDLY For personal use only Consumption and distribution of digital audio is expanding rapidly – SCA is at the forefront : PodcastOne Australia (P1A) Australia’s Leading premium podcast network - 38% increase in episodes over prior year Increased incremental reach th
Slide 18: Digital Audio Is Expanding Rapidly
DIGITAL AUDIO IS EXPANDING RAPIDLY For personal use only Instream Addressable Advertising – the BVOD of Radio: Scale is important – SCA addressable audience via mobile devices in excess of 3m monthly users SCA signed in unique known users growing strongly, with over 450,000 Australians – unlocki
Slide 19: Television - Overview
TELEVISION - OVERVIEW For personal use only $ millions H1 FY20 H1 FY19 Var. • Underlying EBITDA of $13.1m down $3.1m Total Revenue 96.2 104.7 (8.1%) on FY19 Broadcast & Production (46.2) (50.1) (7.7%) • Overall Television revenues reduced $8.5m or Employee (14.9) (15.0) (1.1%) 8.1% Selling, General
Slide 20: Television – Leading Power Ratio
TELEVISION – LEADING POWER RATIO For personal use only Nine Commercial Share & Power Ratio1 • SCA continues to grow the 4-aggregated 1.11 revenue power ratio for Nine – delivering 1.04 1.05 highest ever revenue power ratio of 1.11x • Commercial revenue share has grown in H1 FY20 - despite lower audi
Slide 21: Outlook
For personal use only OUTLOOK Grant Blackley
Slide 22: Strategic Update
STRATEGIC UPDATE For personal use only SCA adopts a Dual Transformation Pathway • Relentless focus on content quality & improved creativity Transformation A: • Superior customer solutions focus by all teams in every Make SCA’s existing core business more geography resilient, effective & efficient •
Slide 23: Underpinning Our Competitive Advantage
UNDERPINING OUR COMPETITIVE ADVANTAGE For personal use only Proudly National, Fiercely Local We are Proudly National • Largest Radio Group in Australia – 96 radio stations in portfolio • Specialist TV Broadcast affiliate – 105 TV signals across 35 markets • Australia’s #1 Commercial Podcast Network
Slide 24: Trading Update
TRADING UPDATE For personal use only • Advertising markets remain challenging across January and February – with similar levels of trading to the first half of the year • Q2 analysis forecasting improving category trend – lead by Insurance and Banking segments – both weak sectors in 2019. Expectatio
Slide 25: Appendix
For personal use only APPENDIX
Slide 26: Reconciliation of Underlying Results
RECONCILIATION OF UNDERLYING RESULTS For personal use only Reported Significant Underlying Significant Underlying $ millions AASB16 H1 FY19 H1 FY20 Items H1 FY20 Items H1 FY19 Revenue 308.1 308.1 335.7 335.7 Expenses (240.6) (8.2) 2.9 (245.9) (253.7) 2.8 (250.9) EBITDA 67.5 62.2 82.1 84.8 EBITDA Mar
Slide 27: For personal use only
For personal use only
Southern Cross Media Group — H1 FY20 Earnings Presentation on 6ix