Walt Disney Company (the) · NYSE:DIS
Walt Disney Company (the) — Q1 2023 Earnings Presentation
30 slides from Walt Disney Company (the)'s earnings presentation, Feb 9, 2023
Slide 1: Q1'23 Earnings Presentation
Q1’23 Earnings presentation February 8, 2023 ©Disney
Slide 2: Forward-Looking Statements
Forward-Looking Statements Certain statements in this presentation may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding our business or financial prospects, trends or outlook; business plans; demand pip
Slide 3: Additional Information
Additional Information Additional Information and Where to Find it Disney has filed with the SEC a definitive proxy statement on Schedule 14A, containing a form of WHITE proxy card, with respect to its solicitation of proxies for Disney’s 2023 Annual Meeting of Shareholders. This communication is no
Slide 4: The Board and Management are Executing our Strategic Plan to Create Sustainable Shareholder Value
The Board and Management are Executing our Strategic Plan to Create Sustainable Shareholder Value
Slide 5: Years of unparalleled storytelling and innovation
100 years of unparalleled storytelling and innovation Talented, resilient and dedicated Cast Members and employees focused on our guests and consumers Unique ability to distribute and monetize our franchises across our platforms and businesses Cherished intellectual property and beloved characters f
Slide 6: Proactively Executing on Key Strategic Priorities
Proactively Executing on Key Strategic Priorities Implementing cost reductions and streamlining organizational structure to enhance productivity Working towards achieving both sustained growth and profitability in our DTC business Improving the guest experience at our parks by providing more value a
Slide 7: Strategic Reorganization Designed to Optimize Future Growth, Profitability and Value Creation
Strategic Reorganization Designed to Optimize Future Growth, Profitability and Value Creation Alan Bergman & Dana Walden The Company’s full portfolio of entertainment media and content businesses globally, including Disney+ and Hulu Jimmy Pitaro ESPN networks, ESPN+, and our international sports cha
Slide 8: Targeting $5.5 Billion of Cost Savings
Targeting $5.5 Billion of Cost Savings We expect to reduce annualized non-content-related expenses (SG&A and other operating costs) by approximately $2.5 billion ~$1 billion of savings is included in our projections that fiscal 2023 segment operating income should grow in the high single digit perce
Slide 9: Architecting a Durable Streaming Model to Achieve Both Sustained Growth and Profitability
ARPU(1) Subscribers Operating Efficiencies Pricing and Advertising Optimize pricing and grow advertising revenue through enhancements and increased inventory Drive Returns on Content Focus on our core franchises, aggressively curate general entertainment, and evaluate / rationalize spend Grow Global
Slide 10: We've Built a Strong Parks Business
Using reservation system to manage attendance during peak holiday weeks, to nearly 20% below pre-pandemic levels at our domestic parks, to improve the guest experience Recently announced changes at Disneyland Resort & Walt Disney World Resort to increase flexibility and add value(1): Increased avail
Slide 11: Focusing on and Significantly Investing in our Core Franchises
As we continue to prioritize reinvesting into our businesses, we expect fiscal 2023 spend on produced and licensed content, including sports rights, to be in the low $30 billion range Spend on Produced and Licensed Content Focusing on and Significantly Investing in our Core Franchises We continue to
Slide 12: Optimistic About Our Ability to Declare a Dividend by the End of Calendar Year 2023
Disney has maintained a disciplined and balanced approach to capital allocation The dividend was an important component of Disney’s Total Shareholder Return during Bob Iger’s first tenure as CEO Disney made the decision to suspend the dividend in Spring 2020 due to the significant impact of COVID ac
Slide 13: CEO Succession is a Top Board Priority
CEO Succession is a Top Board Priority Mark Parker named Chairman of the Board in January 2023 to be effective following the Annual Meeting Leading voice on Disney Board regarding important subjects including engaging and managing creative talent, businesses and executives and pivoting legacy busine
Slide 14: Business Results
BUSINESS RESULTS
Slide 15: Q1 Results for Fiscal 2023
Q1 Results for Fiscal 2023 (In Billions, Except Per Share Amounts) Diluted EPS excluding certain items and total segment operating income are non-GAAP financial measures. The most comparable GAAP measures are diluted EPS from continuing operations and income from continuing operations before income
Slide 16: Recent Business Highlights
Recent Business Highlights Led all studios with the most Academy Award nominations Including two Best Picture nominations for 20th Century Studios’ Avatar: The Way of Water and Searchlight Pictures’ The Banshees of Inisherin Marvel’s Black Panther: Wakanda Forever received five Oscar nominations and
Slide 17: Q1 Media & Entertainment Distribution Results
Operating Income (Loss) Q1 Media & Entertainment Distribution Results (In Billions) Revenues Direct-to-Consumer While revenues increased by 13% vs. the prior year, operating loss increased to $1.1 billion due to a higher loss at Disney+ and a decrease in results at Hulu, partially offset by improved
Slide 18: DTC Quarterly Operating Income (Loss)
DTC Quarterly Operating Income (Loss) (In Billions) Q1 DTC operating losses improved by over $400 million vs. the prior quarter driven by higher revenue and lower SG&A costs, partially offset by higher programming and production costs Across our DTC services, we meaningfully reduced marketing expens
Slide 19: Q1 Disney+ Subscribers & ARPU
Q1 Disney+ Subscribers & ARPU (Paid Subscribers in Millions and Average Monthly Revenue per Paid Subscriber (ARPU) in USD) Disney+ Hotstar Disney+ Hotstar subscribers decreased by 3.8 million vs. the prior quarter. Disney+ Hotstar ARPU increased by $0.16 vs. the prior quarter due to higher per-subsc
Slide 20: Q1 Hulu and ESPN+ Subscribers & ARPU
Q1 Hulu and ESPN+ Subscribers & ARPU (Paid Subscribers in Millions and Average Monthly Revenue per Paid Subscriber (ARPU) in USD) ESPN+ Both subscribers and ARPU grew vs. the prior quarter. ESPN+ ARPU increased by $0.69 vs. the prior quarter due to an increase in retail pricing, partially offset by
Slide 21: Q1 Parks, Experiences & Products Results
Q1 Parks, Experiences & Products Results (In Billions) Revenues International Parks & Experiences Higher year-over-year results were due to growth at Disneyland Paris and higher royalty revenue from Tokyo Disney Resort, partially offset by a decrease at Shanghai Disney Resort due to COVID-related cl
Slide 22: Appendix
Appendix
Slide 23: Recent Changes Announced at Domestic Parks
Recent Changes Announced at Domestic Parks Offering nearly two months-worth of dates for our lowest-priced one-day, one-park ticket in 2023 Offering more flexibility with our Park Hopper ticket, giving Guests the ability to begin crossing over earlier Providing complimentary Disney PhotoPass digital
Slide 24: Upcoming Theatrical Releases
Upcoming Theatrical Releases (Reflects publicly announced planned releases as of February 8, 2023) Date Title Brand Feb 17, 2023 Ant-Man and the Wasp: Quantumania Marvel Apr 21, 2023 Chevalier Searchlight May 5, 2023 Guardians of the Galaxy Vol. 3 Marvel May 26, 2023 The Little Mermaid Disney Jun 2,
Slide 25: Key Upcoming Disney+ and Hulu Releases
Key Upcoming Disney+ and Hulu Releases (Reflects publicly announced planned domestic releases as of February 8, 2023; list is not exhaustive) March 1 The Mandalorian (Season 3) Star Wars Disney+ Scripted Series March 17 Bono & The Edge: A Sort of Homecoming with Dave Letterman Disney Disney+ Unscrip
Slide 26: Upcoming Theme Park Openings & Events
Upcoming Theme Park Openings & Events (Reflects publicly announced planned openings and events as of February 8, 2023; list is not exhaustive) Feb 24, 2023 “Magic Happens” Parade Disneyland Resort March 2023 Mickey’s Toontown Transformation Disneyland Resort Apr 3, 2023 “Happily Ever After” Nighttim
Slide 27: Non-GAAP Financial Measures
Non-GAAP Financial Measures This presentation includes diluted EPS excluding certain items and total segment operating income, both of which are important financial measures for the Company, but are not financial measures defined by GAAP. These measures should be reviewed in conjunction with the mos
Slide 28: Total Segment Operating Income
Total Segment Operating Income (In millions) Quarter Ended December 31, 2022 January 1, 2022 Change Income from continuing operations before income taxes $ 1,773 $ 1,688 5 % Add: Corporate and unallocated shared expenses 280 228 (23) % Restructuring and impairment charges 69 — nm Other expense, net(
Slide 29: Diluted EPS Excluding Certain Items
Diluted EPS Excluding Certain Items (In millions except EPS) The following table reconciles reported diluted EPS from continuing operations to diluted EPS excluding certain items: Tax benefit/expense is determined using the tax rate applicable to the individual item. Before noncontrolling interest s
Slide 30: DTC Product Descriptions and Key Definitions
DTC Product Descriptions and Key Definitions Product offerings In the U.S., Disney+, ESPN+ and Hulu SVOD Only are each offered as a standalone service or together as part of various multi-product offerings. Hulu Live TV + SVOD includes Disney+ and ESPN+. Disney+ is available in more than 150 countri