Southern Cross Media Group Limited · ASX:SXL
Southern Cross Media — Southern Cross Austereo — H1 FY16 Earnings Presentation
29 slides from Southern Cross Media's earnings presentation, Feb 22, 2016
Slide 1: Southern Cross Austereo H1 FY16 Investor Presentation
For personal use only SOUTHERN CROSS AUSTEREO H1 FY16 INVESTOR PRESENTATION 22 FEBRUARY 2016 2/22/2016
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 22 February 2016.
Slide 3: H1 FY16 Results
For personal use only H1 FY16 RESULTS GRANT BLACKLEY 3
Slide 4: Results Summary
RESULTS SUMMARY For personal use only • Revenue up 4.7% with all media assets delivering H1 FY16 % Var revenue growth Revenue $322.0m 4.7% • Turnaround strategy delivers 6.5% EBITDA growth EBITDA $91.4m 6.5% • EBITDA includes $2.4m in income from one off NPAT $43.4m 25.1% events, normalised EBITDA u
Slide 5: Headline Achievements
HEADLINE ACHIEVEMENTS For personal use only • SCA achieved growth across all media assets • SCA has grown advertising share in both Metro Radio & Regional TV • SCA continues to deliver growth in Regional Radio • Metro radio revenue growth offsets significant investment in content • Regional Media EB
Slide 6: Operational Turnaround - Headlines
OPERATIONAL TURNAROUND - HEADLINES • Executive restructure complete For personal use only Improved Executive • New structure will provide better leadership, oversight and reporting Team & Structure • Restructure provides platform for improved focus on Sales, Content and Operations • Launched new Syd
Slide 7: H1 FY16 Financial Results
For personal use only H1 FY16 FINANCIAL RESULTS NICK McKECHNIE 7
Slide 8: Group Reported Statutory Results
GROUP REPORTED STATUTORY RESULTS For personal use only $ millions H1 FY16 H1 FY15 % Var. • Revenue up 4.7%, growth across all areas FAV/(UNFAV) of our business Revenue 322.0 307.6 4.7% Expenses (230.7) (221.9) (4.0%) • EBITDA up 6.5%, includes $2.4m profit on sale of shareholding in DMD Equity Accou
Slide 9: Cashflow
CASHFLOW For personal use only $ millions H1 FY16 • EBITDA to Cash Conversion of 74.0% Opening Cash 143.1 • Net financing payments reduced by 18.6% on Cash from Operations 67.6 H1 FY15 ($20.4m) Payments for Non-Current Assets (8.2) • Debt repayment of $115m, further payment Proceeds from divestment
Slide 10: Debt Facilities
DEBT FACILITIES For personal use only $ millions December 2015 June 2015 • Reduction in Net Debt of $34.3m in H1 Drawn Debt 535.0 650.0 • Balance of Receivables facility of $37.2m ($22.2m at 30 June 2015) Less Cash (62.4) (143.1) • Repaid $115m with a further $100m to be repaid by Net Debt (Borrowin
Slide 11: Covenants
COVENANTS Leverage Ratio1 3.75 3.75 For personal use only 3.6 3.5 3.5 3.25 Leverage ratio including cash receipts from ATN 3.12 2.83 2.67 2.66 2.84 2.60 • Leverage ratio reduced to 2.60x in H1 2.05 • FY16 net finance cost now expected to be in range of $24-$25m, financing costs will June 2013 Dec 20
Slide 12: Operational Review
For personal use only REVIEW OPERATIONAL
Slide 13: Operational Review
OPERATIONAL REVIEW For personal use only % Variance $ millions H1 FY16 H1 FY15 FAV/(UNFAV) Regional Revenue 188.5 182.6 3.2% Metro Revenue 121.0 113.2 6.9% Corporate Revenue 12.5 11.8 5.9% Total Revenue 322.0 307.6 4.7% Regional Expenses (123.7) (123.7) 0.0% Metro Expenses (91.9) (83.0) (10.7%) Corp
Slide 14: Metro Radio
METRO RADIO For personal use only % Variance $ millions H1 FY16 H1 FY15 FAV/(UNFAV.) • Market up 4.6%, SCA advertising Total Revenue 121.0 113.2 6.9% revenues up 6.5% • Triple M revenue up 12.5%, Hit revenue Broadcast & Production (10.3) (9.4) (9.6%) flat but trending up Employee (40.2) (35.5) (13.2
Slide 15: Regional – TV & Radio
REGIONAL – TV & RADIO For personal use only % Variance $ millions H1 FY16 H1 FY15 FAV/(UNFAV.) • Reg TV: 4 Aggregated markets down TV 104.3 102.4 1.9% 6.4%, SCA CH10 Revenues up 3.8% Radio 84.2 80.2 5.0% • Radio: Continued growth profile driven by Total Revenue 188.5 182.6 3.2% national (+6.2%) and
Slide 16: Regional TV & Radio Contribution
REGIONAL TV & RADIO CONTRIBUTION For personal use only $ millions TV Radio Regional radio delivers higher margin contributions due to lower content and distribution costs Advertising Revenues 95.3 81.4 • Radio contribution margins of approximately 81% Direct Costs* (51.5) (15.3) compared to TV at 46
Slide 17: Corporate
CORPORATE For personal use only % Variance $ millions H1 FY16 H1 FY15 FAV/(UNFAV.) Total Revenue 12.5 11.8 5.9% Broadcast & Production (1.7) (1.4) (21.4%) Sales Commission recharge to metro Employee (16.7) (16.0) (4.4%) and regional previously netted off in Selling, General & Admin Selling, General
Slide 18: Advertising Revenue Analysis
For personal use only ADVERTISING REVENUE ANALYSIS
Slide 19: Metro Radio Advertising Revenues
METRO RADIO ADVERTISING REVENUES (EXCLUDES CONTRA AND OTHER REVENUE) For personal use only $m’s • Metro Radio markets were strong at +4.6%, SCA 111.4 104.6 share improved to 28.7% 33.4 34.9 • Content investment driving ratings improvement 71.2 76.5 H1 FY15 H1 FY16 National Local Commercial Share¹ 18
Slide 20: Regional Radio Advertising Revenues
REGIONAL RADIO ADVERTISING REVENUES (EXCLUDES CONTRA AND OTHER REVENUE) For personal use only • Regional Radio continues to perform $m’s well with revenues up 5.6% 77.1 81.4 ― National revenue strong across all regions - up 6.2% 57.5 54.6 ― Local revenues remain strong and resilient with consistent
Slide 21: Regional TV Advertising Revenues
REGIONAL TV ADVERTISING REVENUES (EXCLUDES CONTRA AND OTHER REVENUE) For personal use only • Regional TV performance for Ten $m’s 93.9 95.3 affiliated licenses has outperformed the market 43.9 44.3 - SCA TV revenue from Ten affiliated licenses increased 3.8%, whilst these TV markets declined by 6.4%
Slide 22: Regional TV Advertising Revenues
REGIONAL TV ADVERTISING REVENUES (EXCLUDES CONTRA AND OTHER REVENUE) For personal use only SC 10: SC10 TV Share Analysis • Audience share continues to improve – up 1.3pts 22.0% 20.7% 21.5% 20.7% on H1 FY15 and 0.5pts on H2 FY15 20.2% 18.7% • Local power ratio remains strong at 1.16 compared to 1.10
Slide 23: Capital Management
For personal use only CAPITAL MANAGEMENT
Slide 24: Capital Management - Balance Sheet Repair Complete
CAPITAL MANAGEMENT BALANCE SHEET – REPAIR COMPLETE For personal use only Achieved to Date Future Focus • Pro forma leverage ratio of • Target leverage ratio range of 2.0 - Leverage Ratio 2.05x1 2.5x EBITDA • Pro forma net debt of • Circa $80m of headroom within $372.6m1, - reduced by target range -
Slide 25: Outlook & Summary
For personal use only SUMMARY OUTLOOK &
Slide 26: Outlook
OUTLOOK EBITDA & NPAT For personal use only • FY16 EBITDA forecast to be higher than the prior year at $163m - $166m • EBITDA forecast includes $2.4m profit on disposal of DMD and $4.7m reduction in respect of ATN contract • FY16 NPAT forecast to be 16-20% higher than adjusted prior year NPAT at $75
Slide 27: Summary
SUMMARY For personal use only • SCA is heavily invested in radio, a sector that continues to grow and expand revenues • Growth achieved across all media assets • Declared 3.25 cents per share, fully franked and fully cash funded - DRP has been suspended • Balance Sheet repair complete and within tar
Slide 28: For personal use only
%\ SOUTHERN CROSS AUSTEREO engaging JI
Slide 29: Thank You
For personal use only THANK YOU
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