Southern Cross Media Group Limited · ASX:SXL
Southern Cross Media — H1 FY24 Earnings Presentation
32 slides from Southern Cross Media's earnings presentation, Feb 29, 2024
Slide 1: H1 FY24 Results
H1 FY24 RESULTS 6 MONTHS TO 31 DECEMBER 2023
Slide 2: H1 FY24 Overview
H1 FY24 OVERVIEW JOHN KELLY 2
Slide 3: Transaction Update
TRANSACTION UPDATE • On 18 October 2023, SCA received an unsolicited non-binding indicative proposal from ARN Media (ARN) and Anchorage Capital Partners Overview (ACP) (together, the Consortium) to acquire 100% of SCA via a scheme of arrangement (Proposed Transaction) • Consideration under the Propo
Slide 4: H1 FY24 Results Highlights
H1 FY24 RESULTS HIGHLIGHTS Revenue EBITDA1 Costs1 $252.6m $31.1m $221.5m Capex Net Debt Dividends $11.7m $106.6m 1.0cps Fully Franked Cost Out Program Proforma EBITDA1,2 $30m $20m $49.9m identified to be realised in FY24 EBITDA ($31.1m) + annualised Cost Out ($10.2m) + Digital break even ($8.6m) 1 E
Slide 5: Building Shareholder Value
BUILDING SHAREHOLDER VALUE REVENUE COST & CAPEX LiSTNR • Total audio revenues have • Strategic Cost Review has • Major investment in platform remained flat in a challenging identified ~$30m of annualised technology complete, with market cost savings from FY25, with enhanced LiSTNR app released ~$20m
Slide 6: Continued Momentum: SCA is #1
BUILDING SHAREHOLDER VALUE CONTINUED MOMENTUM: SCA IS #1 #1 #1 #1 Metro Radio P10+, P25-541 Metro Radio M25-541 Metro Radio P10+, P25-54, W25-541 #1 #1 #1 Regional Radio Network2 Podcast Sales Network3 Podcast3 1 GFK Radio Share Ratings. Survey 8 2023. 5 Cap Cities. P25-54, M25-54, W25-54, P10+ Mon-
Slide 7: Proudly National, Fiercely Local
BUILDING SHAREHOLDER VALUE PROUDLY NATIONAL, FIERCELY LOCAL Regional Radio Revenues +8.9% • SCA's distinctive strategy of embracing a Proudly National, +2.5% $49.2m +6.6% Fiercely Local approach in regional markets has proven highly $44.0m $45.1m beneficial, with local SME advertisers showing resili
Slide 8: Accelerated Cost Management
BUILDING SHAREHOLDER VALUE ACCELERATED COST MANAGEMENT Proforma H1FY24 NRR Expenses • The Cost Out program will deliver ~$20m in annualised cost savings in FY24 (excluding implementation costs) – with $4.6 million of those savings already realised in H1FY24 • FY25 will see an additional $9 million i
Slide 9: Growing Underlying Earnings
BUILDING SHAREHOLDER VALUE GROWING UNDERLYING EARNINGS Proforma H1FY24 EBITDA • Increase in Proforma EBITDA to $49.9m, from reported EBITDA of $31.1m for H1FY24 • The increase in proforma H1FY24 EBITDA is achieved by adjusting for: o Successful implementation of the cost-out program in H1FY24 that h
Slide 10: Broadcast Strong; Digital Growing
BUILDING SHAREHOLDER VALUE BROADCAST STRONG; DIGITAL GROWING Weekly Listening AM/FM/DAB+ Weekly Listening Online Audio 80% 80% 79% 74% 71% 66% 2021 2022 2023 2021 2022 2023 Source: The Infinite Dial Australia 2023 Study, Edison Research. Total Australian Population 12+. % listened to AM/FM/DAB+ in p
Slide 11: Digital Audio Market Continues to Grow
BUILDING SHAREHOLDER VALUE DIGITAL AUDIO MARKET CONTINUES TO GROW Daily Time Spent Ad Revenue Share3 on Media2 • Audio consumption holds a 37% share of audience time spent on daily media, however advertisers currently allocate only 6% of their 6% spend to audio • Despite audio's audience prominence,
Slide 12: Increasing Monetisable Audience
BUILDING SHAREHOLDER VALUE INCREASING MONETISABLE AUDIENCE SCA National Radio Cume Audience1 LiSTNR Podcast Network Audience2 8.9m 9.0m 8.5m 7.4m 5.7m July 2022 June 2023 Dec 2023 H1 FY23 H1 FY24 1 Gfk Radio Ratings. Survey 5 2022, Survey 5 2023, Survey 8 2023 + Relevant Regional Surveys. All People
Slide 13: Digital Revenue Growth
BUILDING SHAREHOLDER VALUE DIGITAL REVENUE GROWTH • The momentum of Digital Advertising shows a strong and consistent Digital Advertising Revenue growth trajectory of 30% CAGR since FY19 $15.6m • Stream starts have increased 17% and listening hours 7% on pcp1 CAGR +30% $12.3m • All revenue streams a
Slide 14: Digital Foundation Complete – Capex to Decline
BUILDING SHAREHOLDER VALUE DIGITAL FOUNDATION COMPLETE – CAPEX TO DECLINE Capital Expenditure $29.9m • SCA’s investments in the digital platform are complete, with capex now declining -- facilitating centralisation and opex savings • Capital expenditure for H1 FY24 rose by $3.9m vs H1 FY23 due to in
Slide 15: LiSTNR Upgrade Improves UX & Monetisation
BUILDING SHAREHOLDER VALUE LiSTNR UPGRADE IMPROVES UX & MONETISATION • SCA has completed the major investment in LiSTNR with the release of the most significant upgrade to the platform since launch solidifying • Key user improvements solidify LiSTNR's position as a leading content destination includ
Slide 16: LiSTNR Ad Tech Provides Access to Further Premium & Value-Adding Services
BUILDING SHAREHOLDER VALUE LiSTNR AD TECH PROVIDES ACCESS TO FURTHER PREMIUM AD TECH CAPABILITY EXAMPLES NOVA ARN (iHEART) SPOTIFY META GOOGLE $$$ Suppression of Clean Room Solution existing customers User Age, Gender, INCREASING PRICE PREMIUM & VALUE-ADDING SERVICES 1P Data (logged in users) Locati
Slide 17: LiSTNR to Breakeven in Q4FY24
BUILDING SHAREHOLDER VALUE LiSTNR TO BREAKEVEN IN Q4FY24 Digital EBITDA • Major digital investments are complete, improving both experience and commercial opportunity Q4 FY24 • Together with strong cost reduction and substantially lowered capital investment, LiSTNR remains on track to reach EBITDA b
Slide 18: H1 FY24 Financial Results
H1 FY24 FINANCIAL RESULTS TIM YOUNG 18
Slide 19: Group Results
$ millions H1 FY241 H1 FY231,2 Var $ Var % Revenue 252.6 260.1 (7.6) (2.9%) GROUP RESULTS Revenue Related Expenses Non-Revenue Related 62.0 63.3 (1.3) (2.1%) Expenses 159.5 152.7 6.8 4.5% • Group revenues declined by 2.9% compared to the prior corresponding period (pcp), although there was a notewor
Slide 20: Broadcast Radio
BROADCAST RADIO $ millions H1 FY241 H1 FY231,2 Var $ Var % • Overall radio revenue saw a decline of $4.1m, representing a 2.2% decrease: Revenue 184.0 188.1 (4.1) (2.2%) • Metro Radio declined 6.4%, or $6.2m amidst an industry-wide downturn, with market revenues down 1% in Q1 and 6% in Q2. With new
Slide 21: Digital
DIGITAL $ millions H1 FY241 H1 FY231,2 Var $ Var % • LiSTNR revenue has increased by 27.0% to $15.6m, with healthy growth in both InStream and Podcast revenue lines Revenue 15.6 12.3 3.3 27.0% • Total expenses grew by 6.1%, primarily influenced by a $0.6m increase in revenue related costs, a consequ
Slide 22: Television
TELEVISION $ millions H1 FY241 H1 FY231 Var $ Var % • Television revenues saw a contraction of 11.1%, with National revenues the main driver contracting 14.7%, and Local revenues Revenue 53.0 59.6 (6.6) (11.1%) down 9.8% • Total expenses were down $2.2m or 4.8%, with Non-Revenue Revenue Related Expe
Slide 23: Cashflow
$ millions H1 FY24 H1 FY23 Var $ Net Debt Start of Period (105.0) (78.5) (26.5) Net Cash from Operations 20.5 30.3 (9.9) CASHFLOW Principal lease payments Capex net of sales proceeds (3.6) (3.4) (0.2) (6.3) (4.6) (1.7) • Operating Cash Conversion was stable, holding at 70.4% Free cash flow 10.6 22.3
Slide 24: FY24 Trading Outlook
FY24 TRADING OUTLOOK JOHN KELLY
Slide 25: FY24 Outlook
FY24 OUTLOOK Ad markets remain challenging with Broadcast radio revenues LiSTNR remains on target to achieve tracking ahead of the market Digital audio Q3 revenue pacing at EBITDA break-even in Q4 FY24 SCA is dedicated to translating ~50% growth LiSTNR will progress to Cash flow audience growth into
Slide 26: Q&A
Q&A 26
Slide 27: 27
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Slide 28: Disclaimer
DISCLAIMER 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 29 February 2024. The information in this presentation is of a general background na
Slide 29: Appendix
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Slide 30: Reconciliations
APPENDIX RECONCILIATIONS RECONCILIATION TO REPORTED NPAT H1 FY24 Reported H1 FY24 NRIs H1 FY24 Underlying H1 FY23 Reported H1 FY23 NRIs H1 FY23 Underlying EBITDA 29.1 2.0 31.1 43.2 0.9 44.1 Depreciation & Amortisation 15.1 0.0 15.1 14.4 0.0 14.4 EBIT 13.9 2.0 15.9 28.7 0.9 29.7 Net Finance Costs 9.5
Slide 31: Reconciliations
APPENDIX RECONCILIATIONS RECONCILIATION TO H1 FY23 INVESTOR PRESENTATION Broadcast Audio Digital Television NRIs & NRIs & NRIs & $ millions Presented Adjusted Presented Adjusted Presented Adjusted Adjustment Adjustment Adjustment Revenue 188.2 -0.0 188.1 12.2 0.0 12.3 59.6 0.0 59.6 Revenue Related E
Slide 32: Broadcast Radio Revenue
APPENDIX BROADCAST RADIO REVENUE METRO Radio Advertising Revenue REGIONAL Radio Advertising Revenue $80.3m $81.9m $96.8m $90.6m $20.6m +0.3% $20.7m +6.0% $46.8m $50.8m -8.2% $76.2m $69.9m -7.9% $33.5m $31.1m H1 FY23 H1 FY24 H1 FY23 H1 FY24 Agency Direct National Local 32
Southern Cross Media Group — H1 FY24 Earnings Presentation on 6ix