Southern Cross Media Group Limited · ASX:SXL
Southern Cross Media — H1 FY19 Earnings Presentation
30 slides from Southern Cross Media's earnings presentation, Feb 21, 2019
Slide 1: Southern Cross Austereo H1 FY19 Investor Presentation
For personal use only SOUTHERN CROSS AUSTEREO H1 FY19 INVESTOR PRESENTATION 21st February 2019 1
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 (“Southern Cross Austereo”) and contains summary information about Southern Cross Austereo’s activities current as at 21 February 2019. Th
Slide 3: H1 FY19 Results
For personal use only H1 FY19 Results Grant Blackley 3
Slide 4: Group Overview & Results Summary
GROUP OVERVIEW & RESULTS SUMMARY For personal use only Strong market fundamentals for Audio – Radio & Podcasting assets Group Underlying NPAT of $42.2m up 10.6% Group revenue up 0.2% to $335.7m driven by Metro Radio growth of 6.7% Group expenses down by $4.3m or 1.7% (excluding restructuring
Slide 5: Headline Achievements
HEADLINE ACHIEVEMENTS For personal use only • Metro Radio revenue up 6.7% on back of stronger ratings and better monetisation of FM + Digital Radio coupled audiences Revenue • National advertiser investment into Regional Radio continues to grow - up 9.2% on H1 FY18 Performance and 22% on H1 FY17 • S
Slide 6: H1 FY19 Financial Results
For personal use only H1 FY19 FINANCIAL RESULTS Nick McKechnie 6
Slide 7: Group Reported Statutory Results
GROUP REPORTED STATUTORY RESULTS For personal use only $ millions H1 FY19 H1 FY181 Var. • Underlying NPAT of $42.2m, up 10.6% Revenue 335.7 335.2 0.2% Expenses (253.7) (255.2) (0.6%) • Revenues up 0.2% and expenses back EBITDA 82.0 80.0 2.5% 0.6%. Growth in Audio market segment (Radio & Podcasting)
Slide 8: Group Underlying NPAT up 10.6% to $42.2m
GROUP UNDERLYING NPAT UP 10.6% TO $42.2M For personal use only $ millions H1 FY19 H1 FY18 Var. Reported EBITDA 82.0 80.0 2.5% • One off restructuring charges of $2.8m Restructuring Costs 2.8 - - relating to Workforce Planning Project and ATN Revenue (1.9) (1.9) - pending outsourcing of Television pl
Slide 9: Cashflow
CASHFLOW For personal use only $ millions H1 FY19 H1 FY18 • Quality earnings with free cash conversion Opening Cash 56.1 49.0 of 97.1% up from 91.0% in the prior Cash from Operations 80.9 68.8 corresponding period Tax payment (19.8) (18.9) • Free cashflow benefited from $5m Net Payments for Non-Curr
Slide 10: Debt & Financial Covenants
DEBT & FINANCIAL COVENANTS For personal use only • Net debt reduced by $29.7m to $295.1m Net Debt 472.6 • Continued improvement in key Debt Covenants: 347.8 Leverage Ratio reduced to 1.72x in 324.8 295.1 middle of target range of 1.5x - 2.0x Further Improvement in Interest Cover Ratio to 12.9x e
Slide 11: Operational Review
For personal use only OPERATIONAL REVIEW 11
Slide 12: Operational Review
OPERATIONAL REVIEW For personal use only $ millions H1 FY19 H1 FY18 Var. • Underlying EBITDA growth of 6.1% Audio Revenue 230.2 221.8 3.8% Television Revenue 104.7 112.7 (7.1%) • Audio segment delivered 7.3% EBITDA growth Corporate Revenue 0.8 0.7 23.6% and 3.8% revenue growth Total Revenue 335.7 33
Slide 13: Audio Segment
AUDIO SEGMENT For personal use only $ millions H1 FY19 H1 FY18 Var. • SCA revenue growth of 3.8% - affording Total Revenue 230.2 221.8 3.8% increased revenue share in market Broadcast & • EBITDA margin improved from 33.8% to (12.4) (11.7) 6.1% Production 34.4% Employee (76.7) (76.6) 0.1% • Employee
Slide 14: Audio - Metro Radio Advertising Revenues
AUDIO - METRO RADIO ADVERTISING REVENUES For personal use only $m’s • Market growth 1.2% in H1 FY19. SCA 123.6m 115.8m1 revenues increased 6.7% reflecting an 28.6 increased share 31.1 • Revenues up $7.8m driven by improved ratings, effective monetisation of Digital stations and continued focus on pr
Slide 15: Audio - Regional Radio Advertising Revenues
AUDIO - REGIONAL RADIO ADVERTISING REVENUES For personal use only $m’s • Strong compounding improvement in 93.7 95.3 national investment into the regions - revenues up 9.2% on H1 FY18 and 22.0% on H1 FY17 61.2 59.8 • Regional trade marketing and education remain critical to fuel even higher growth •
Slide 16: Audio - Podcasting: Content
AUDIO - PODCASTING For personal use only PodcastOne is the leading premium commercial podcast network in Australia Content • Demand for podcasting continues to accelerate – expected to reach 100 million downloads by April 2019 • Over 60 premium original authors currently on platform • Evergreen natu
Slide 17: Audio - Podcasting: Monetisation
AUDIO - PODCASTING For personal use only PodcastOne is the leading premium commercial podcast network in Australia Monetisation • Market interest and appreciation of podcasting continues to grow • Path to monetisation continues to improve – with year on year revenue growth of 400% • Expansion into B
Slide 18: Television
TELEVISION For personal use only • Television market challenging in H1, driven by $ millions H1 FY19 H1 FY18 Var. slowing demand in Q2 Total Revenue 104.7 112.7 (7.1%) • SCA outperformed the market – excluding impact of cricket (circa $4m in H1 FY18) Broadcast & (50.1) (55.2) (9.3%) Production • Var
Slide 19: Television - Regional TV Advertising Revenues
TELEVISION - REGIONAL TV ADVERTISING REVENUES For personal use only $m’s • H1 FY19 revenues directly impacted by 106.8m 96.6m loss of cricket in December 18 – circa $4m 49.2 • Tennis has positively impacted January 43.1 2019 revenues • National revenues partly insulated by benefit of scale from comb
Slide 20: Television - Regional TV Power Ratio Nine Affiliation
TELEVISION - REGIONAL TV POWER RATIO NINE AFFILIATION For personal use only Commercial Share & Power Ratio1 • NNSW TV sales representation 1.09 1.08 performing well for both SCA & 1.03 1.06 1.06 1.05 Nine2 • Opportunity to further grow 38.1% 36.7% 37.7% power ratio in NNSW with 35.8% 35.9% 35.9% 34.
Slide 21: Corporate
CORPORATE For personal use only $ millions H1 FY19 H1 FY181 Var. • Corporate has been simplified with earnings from Radio and Television joint ventures moved to Audio and Total Revenue 0.8 0.7 23.6% Television segments Total Expenses (12.5) (12.2) 2.2% EBITDA (11.7) (11.5) 0.9% 1 Restated to realloc
Slide 22: Outlook
For personal use only OUTLOOK Grant Blackley 22
Slide 23: Stable Portfolio of Brands in 2019
STABLE PORTFOLIO OF BRANDS IN 2019 For personal use only • Hit Network – strong and consistent stable of shows • Launched “Bec and Cosi” in Adelaide – opportunity to broaden audience • Dual national drive show format settled and 3.00 – 6.30pm extended timeslot providing premium selling returns • Tri
Slide 24: SCA Extends Monetisable Audience with FM+DAB
SCA EXTENDS MONETISABLE AUDIENCE WITH FM+DAB For personal use only Digital radio listening continues to expand in Australia • 4.2m Digital Radio listeners in Australia National Network Cume Reach (000’s) Mon-Fri • Annual sales of 977,000 radios in 2018 with 23% 200 05:30 - 9:00AM P10+ 4,000 compound
Slide 25: Outlook for H2 FY19
OUTLOOK FOR H2 FY19 For personal use only • January and February trading slightly ahead of last year • Impressive first year of Tennis coverage on Nine affiliated stations • Market trading shorter than expected approaching Federal Election Trading Update • Momentum generated in first half audio reve
Slide 26: For personal use only
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Slide 27: Appendix
For personal use only APPENDIX 27
Slide 28: Restatement of FY18 Results
RESTATEMENT OF FY18 RESULTS Audio TV For personal use only Reported TV JV Metro Reported Net Restated Net Earnings Restated Radio Regional Total Reallocations to ATN FY18 Audio Total TV Reallocations (previously FY18 TV Results Radio Results Audio Audio CGU Adjustment Results Results to TV CGU accou
Slide 29: DAB Audience Growth - FM+DAB
DAB AUDIENCE GROWTH – FM+DAB For personal use only Digital radio audiences have also increased across Drive as well as Total Listening (Run of Station) National Network Cume Reach (000's) Mon-Fri National Network Cume Reach (000's) 200 04:00 - 7:00PM P10+ 4,000 Mon-Sun ROS P10+ 400 5,050 180 3,500 1
Slide 30: For personal use only
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