Lee Enterprises, Incorporated · NASDAQ:LEE
Lee Enterprises — Investor Presentation (November 2023)
24 slides from Lee Enterprises's investor presentation, November 2023
Slide 1: Building Long Term Value - November 2023 Investor Presentation
BUILDING LONG TERM VALUE NOVEMBER 2023 INVESTOR PRESENTATION
Slide 2: Safe Harbor
SAFE HARBOR The information provided in this presentation may include forward-looking statements relating to future events or the future financial performance of the Company. Because such statements are subject to risks and uncertainties, actual results may differ materially from those expressed or
Slide 3: Key Themes for Today
KEY THEMES FOR TODAY 1 WHO WE ARE 2 DELIVERING INDUSTRY-LEADING DIGITAL GROWTH IN A DYNAMIC MARKET 3 SOUND THREE PILLAR DIGITAL GROWTH STRATEGY WELL-POSITIONED TO DELIVER VALUE FOR STAKEHOLDERS 4 FINANCIAL OUTLOOK – FY2024 AND BEYOND 3
Slide 4: Lee is a digital-first subscription platform providing communities with local news
LEE IS A DIGITAL-FIRST SUBSCRIPTION PLATFORM PROVIDING COMMUNITIES WITH VALUABLE, INTENSELY LOCAL NEWS Total Revenue Led by Digital-only subscriptions more than THREE PILLAR $720 million DIGITAL GROWTH 606,000 June 2023 LTM June 2023 STRATEGY 4
Slide 5: Transforming the Composition of Revenue
TRANSFORMING THE COMPOSITION OF REVENUE Where We Are Going Where We Are FY 2026E Where We Were Q3 2023 FY 2020 % Digital 21% 41% >67% Revenue Prior to launch of Three Pillar Industry-leading digital Continuing transition to a Digital Growth Strategy revenue growth is transforming digital-first organ
Slide 6: Well-Positioned to Drive Value for Stakeholders
WELL-POSITIONED TO DRIVE VALUE FOR STAKEHOLDERS Execute Three Pillar Digital Growth Strategy Generate long-term sustainable digital revenue growth, margin expansion, and strong free cash flow Continued Debt Reduction & Strengthened Balance Sheet Expect to reach <2.5x leverage target Increased Shareh
Slide 7: Key Themes for Today
KEY THEMES FOR TODAY 1 WHO WE ARE 2 DELIVERING INDUSTRY-LEADING DIGITAL GROWTH IN A DYNAMIC MARKET 3 SOUND THREE PILLAR DIGITAL GROWTH STRATEGY WELL-POSITIONED TO DELIVER VALUE FOR STAKEHOLDERS 4 FINANCIAL OUTLOOK – FY2023 AND BEYOND 7
Slide 8: Market Leading Growth
MARKET LEADING GROWTH Digital Subscriber Digital Agency Revenue Total Digital Revenue Growth Leads Industry Growth Leads Industry Growing Significantly 606K Current Digital-only Subscribers $89M Amplified LTM Revenue $265M LTM Total Digital Revenue 15 quarters of leading digital subscriber growth In
Slide 9: Key Themes for Today
KEY THEMES FOR TODAY 1 WHO WE ARE 2 DELIVERING INDUSTRY-LEADING DIGITAL GROWTH IN A DYNAMIC MARKET 3 SOUND THREE PILLAR DIGITAL GROWTH STRATEGY WELL-POSITIONED TO DELIVER VALUE FOR STAKEHOLDERS 4 FINANCIAL OUTLOOK – FY2023 AND BEYOND 9
Slide 10: Lee's Strategy for Digital Transformation: The Three Pillars
LEE’S STRATEGY FOR DIGITAL TRANSFORMATION: THE THREE PILLARS LEE IS RAPIDLY TRANSFORMING FROM A PRINT-CENTRIC TO A DIGITAL-CENTRIC COMPANY PILLAR 1 PILLAR 2 PILLAR 3 Expand digital audiences by Expand digital subscription Diversify and expand transforming the base and revenue offerings presentation
Slide 11: Digital Transformation: Expand Digital Audiences
DIGITAL TRANSFORMATION: EXPAND DIGITAL AUDIENCES ENHANCING DIGITAL PRESENTATIONS TO PROVIDE BEST-IN-CLASS USER EXPERIENCE OF LOCAL NEWS, WITH MULTI-FORMAT, RICH CONTENT PILLAR 1 PILLAR 2 PILLAR 3 • Multimedia presentation with an emphasis on video and audio to drive engagement and monetization • Emp
Slide 12: Digital Transformation: Strategies to Drive Subscription Revenue
DIGITAL TRANSFORMATION: STRATEGIES TO DRIVE SUBSCRIPTION REVENUE ENHANCING CONVERSION WITHIN LEE’S ADDRESSABLE MARKET PILLAR 1 PILLAR 2 PILLAR 3 Key initiatives… Addressable Market ‒ Optimize subscription model for digital-only growth ‒ Maximize subscription rates by leveraging first-party data Anon
Slide 13: Digital Transformation: Expand Digital Advertising Services
DIGITAL TRANSFORMATION: EXPAND DIGITAL ADVERTISING SERVICES LEVERAGE “FIRST TO MARKET” POSITION WITH ARRAY OF DIGITAL PRODUCT OFFERINGS, SERVICES AND MARKETING SOLUTIONS PILLAR 1 PILLAR 2 PILLAR 3 Diversify and Expand Offerings to Local Advertisers Amplified: Lee’s Omnichannel Marketing Solution Max
Slide 14: Digital Transformation: Key Takeaways
DIGITAL TRANSFORMATION: KEY TAKEAWAYS Digital Subscriptions Digital Advertising Lee is the fastest growing digital subscription platform Our full-service digital agency, Amplified Digital®, is with a strong track record of accelerating digital subscription growing rapidly growth Lee’s sophisti
Slide 15: Key Themes for Today
KEY THEMES FOR TODAY 1 WHO WE ARE 2 DELIVERING INDUSTRY-LEADING DIGITAL GROWTH IN A DYNAMIC MARKET 3 SOUND THREE PILLAR DIGITAL GROWTH STRATEGY WELL-POSITIONED TO DELIVER VALUE FOR STAKEHOLDERS 4 FINANCIAL OUTLOOK – FY2023 AND BEYOND 15
Slide 16: 2023 Outlook
2023 OUTLOOK 2023 2021 2022 Outlook Total Digital Revenue $189M $240M $270-285M YoY 12% 27% 13% to 19% Digital-only subscribers 402,000 532,000 632,000 YoY 65% 32% 19% Cash Costs(1) $686M $693M $610-620M YoY -3% 1% -12% to -11% Adjusted EBITDA(1) $117M $96M $85-90M YoY -5% -18% -12% to -6% (1) Adjus
Slide 17: Digital Transformation: Update on Long Term Targets
DIGITAL TRANSFORMATION: UPDATE ON LONG TERM TARGETS Amplified Digital® Growth Digital Subscription Growth $100M Target achieved mid 2024 900K Target achieved in 2026 900K $100M Target achieved in 2026 $100M+ 632K $100M+ 532K $92M $76M 402K $61M $41M 244K $40M $29M $28M $19M 2020 2021 2022 2023
Slide 18: Strong Track Record of Sustainable Cost Management
STRONG TRACK RECORD OF SUSTAINABLE COST MANAGEMENT KEY TAKEAWAYS Total Cash Costs(1) • Proficient in driving efficiencies $1.0B • Current base of $300M of direct costs associated with our $705M $693M legacy revenue streams that will be managed with $610-620M associated revenue trends • Executed $76M
Slide 19: Digital Transformation: Strengthened Balance Sheet
DIGITAL TRANSFORMATION: STRENGTHENED BALANCE SHEET • $116M debt reduction since refinancing in March 2020 Significant Gross Debt Reduction • Favorable credit agreement with Berkshire Hathaway $576M • 25-year runway w/ no breakage costs or prepayment penalties • Fixed annual interest rate, no financi
Slide 20: Lee Investment Thesis
LEE INVESTMENT THESIS WE BELIEVE OUR THREE PILLAR DIGITAL GROWTH STRATEGY WILL CREATE SUBSTANTIAL VALUE: Execute Three Pillar Digital Growth Strategy Generate long-term sustainable digital revenue growth, margin expansion, and strong free cash flow Continued Debt Reduction & Strengthened Balance She
Slide 21: Lee Enterprises
EE ENTERPRISES
Slide 22: Quarterly Revenue Composition
QUARTERLY REVENUE COMPOSITION (Millions of Dollars) Q1 FY2022 Q2 FY2022 Q3 FY2022 Q4 FY2022 FY 2022 Q1 FY2023 Q2 FY2023 Q3 FY2023 Digital Advertising and Marketing Services 42.8 43.4 46.2 49.1 181.5 47.7 46.3 49.9 YoY % 18.8% 36.1% 26.6% 32.7% 28.3% 11.6% 6.6% 8.0% Digital Only Subscription Revenue
Slide 23: Reconciliation of Non-GAAP Financial Measures
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES Adjusted EBITDA is a non-GAAP financial performance (Millions of Dollars) Q3 FY2023 measure that enhances financial statement users overall understanding of the operating performance of the Net Income 2.1 Company. The measure isolates unusual, infrequent
Slide 24: Reconciliation of Non-GAAP Financial Measures
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES Cash Costs represent a non-GAAP financial performance Q3 Q3 measure of operating expenses which are measured on an (Millions of Dollars) accrual basis and settled in cash. This measure is useful to FY2023 FY2022 investors in understanding the components
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