Singapore Exchange Ltd. · SGX:S68
Singapore Exchange — Singapore Press Holdings — Q3 FY2019 Earnings Presentation
27 slides from Singapore Exchange's earnings presentation, Jul 12, 2019
Slide 1: Financial Results 3Q FY19
FINANCIAL RESULTS 3Q FY19 12 July 2019 Singapore Press Holdings Limited
Slide 2: Disclaimer
Disclaimer This presentation is for information only and does not constitute an invitation or offer to acquire, purchase or subscribe for shares in SPH (“Shares”). The value of shares and the income derived from them may fall as well as rise. Shares are not obligations of, deposits in, or guaranteed
Slide 3: 3Q FY19 Financial Highlights
3Q FY19 Financial Highlights Operating revenue eased 1.6%, supported by 3Q FY19 3Q FY18 Change UK PBSA and SPH REIT’s Figtree S$’000 S$’000 % Media: Operating revenue 246,102 250,074 (1.6) • Premium content strategy to expand overseas reach • Good traction on ZB tablet campaign offers scope to boost
Slide 4: Media: Tablet subscriptions boost digital circulation
Media: Tablet subscriptions boost digital circulation • Faster digital newspaper circulation growth of 22%* • Overall circulation decline moderated to 3.3% • Boosted by ZB tablet sales campaign in end-March • Print circulation decline stable, overall ST circulation up due to digital growth Copies Av
Slide 5: Media: Digital Revenue growth boosted by circulation
Media: Digital Revenue growth boosted by circulation 9M FY19 digital ad revenue eased to 4.9% y-o-y… but total digital revenue increased 9% y-o-y with circulation initiatives S$’m Digital Ad Revenue * Total Digital Revenue * S$’m 44 80 11.1% CAGR 6.4% CAGR 74 43 43 70 68 42 60 41 60 41 50 40 39 40 3
Slide 6: Newspaper Print – Print ad revenue down 12.3%
Newspaper Print – Print ad revenue down 12.3% % YoY Change in Print Ad Revenue • Total print ad revenue down 12.3% for 9M FY19 • Display ads shows single digit decline • Innovative print campaigns with advertisers • Print classified segment challenged • Mitigated by leading position in online classi
Slide 7: Media: Catalysing advertising and circulation channels
Media: Catalysing advertising and circulation channels Extending advertising reach Expanding successful digital circulation campaign Mega LED screen at One Raffles Place • Partnership with One Raffles Place for mega LED screen • 50% of traffic in Raffles Place are PMEBs • Expands reach for higher-yi
Slide 8: Media: Quality journalism drives content strategy
Media: Quality journalism drives content strategy INMA Global Media Awards President of World Editors Forum • ST Editor, Warren Fernandez elected president of World • The Straits Times Asia Report won Best in Asia/Pacific, Editors Forum (“WEF”) for two years Regional/Local Brands and Best New Print
Slide 9: Property: Driving growth & recurring income, overseas
Property: Driving growth & recurring income, overseas SPH REIT Property is 80% of SPH’s PBT, the largest profit segment •UK PBSA portfolio made £133.7m acquisition in April 2019, adding 1,243 beds across Leeds, Sheffield and Southampton •Follows on from maiden acquisition in Scotland with 264 beds i
Slide 10: Property: Woodleigh Residences' sales on track
Property: Woodleigh Residences’ sales on track • Encouraging sales after official launch in May, at average selling price >S$1,900 psf • About 17% of units sold as at the end of June • Woodleigh Residences sole private project to overlook Alkaff Lake, directly connected to Woodleigh Mall, Woodleigh
Slide 11: Property: Building up recurring income, honing capabilities
Property:Building up recurring income, honing capabilities • Committed US$55m for a 6.8% stake as a cornerstone investor in KBS Prime US REIT’s IPO • Investing 20% stake in the REIT manager, by way of a call option, for US$14.6 million • KBS Prime US REIT’s portfolio consists of 11 Grade A office pr
Slide 12: Property: Expanding PBSA portfolio, stabilising operations
Property: Expanding PBSA portfolio, stabilising operations > S$600m AUM, 5,059 beds and • Acquisition of £133.7m UK portfolio in April, adding 20 assets in 10 UK cities 1,243 beds across Leeds, Sheffield and Southampton • Follows acquisition in March 2019 of Clifton & Stewart House in Glasgow with 2
Slide 13: Property: Premier assets in fast-growing cities, first acquisition in Scotland
Property:Premier assets in fast-growing cities, first acquisition in Scotland Clifton & Stewart Hampton Square Sharman Court Asa Briggs House House • Added 526 beds in April • Added 397 beds in April • Added 320 beds in April • Added 264 beds in March • Strong student-to-bed ratio of • Stable studen
Slide 14: Property: Capitol Students - Aspiring PBSA lead player
Property: Capitol Students - Aspiring PBSA lead player Service differentiation and brand presence Enabling data-driven sales and acquisitions Online student community portal • Established sales office in Shanghai and appointed agents in China Property Management CRM • Adopted millennial-friendly soc
Slide 15: Digital: Harnessing synergies across platforms
Digital: Harnessing synergies across platforms Extracting synergies from associate • Discussing data sharing initiatives to improve consumer insights, enhance audience-targeting • Exploring offering SPH products and services to M1 customers and vice versa • Provides social media marketing insights •
Slide 16: Aged care: Strengthening operations; steady occupancy
Aged care:Strengthening operations; steady occupancy Improvements in BOR • Impairment charge of $21.5m • Impacted by increase in build-own-lease bed capacity • Improving bed occupancy rate (BOR) • Improving operational efficiencies • Balestier branch has ramped up operations compared with 3Q FY18 •
Slide 17: Others: Optimising capital structure and financial resources
Others: Optimising capital structure and financial resources Established capital markets presence Maintaining healthy balance sheet Issuance of S$150m perpetual securities at 4.5% • Issuance of perpetual securities in June 2019; well- received by institutional investors • >5x subscribed • Trading we
Slide 18: Group 9M FY19 Segmental Highlights
Group 9M FY19 Segmental Highlights Media Operating 9M FY19 9M FY18 Change Media revenue for 9M FY19 declined by 11.6% Revenue S$’000 S$’000 % • Print advertisement declined by 13.8% • Newspaper digital ad revenue shows encouraging growth of 11% Media 439,733 497,472 (11.6) • Newspaper digital copies
Slide 19: Group 9M FY19 Segmental Highlights
Group 9M FY19 Segmental Highlights Media Profit / (loss) 9M FY19 9M FY18 Change Media’s PBT 32.2% lower before taxation S$’000 S$’000 % • Decline in ad revenue • Absence of retrenchment cost incurred in 9M FY18 • Costs well-controlled Media 52,118 76,821 (32.2) Property Property 132,804 115,676 14.8
Slide 20: Summary: Positioning for growth
Summary: Positioning for growth Media Property Digital Aged Care Expansion overseas Achieved scale, developing Focus on investments with Enhance operational through quality journalism own brand platform as well growth potential and capabilities and diversify as sales and marketing synergies with exi
Slide 21: Thank You
Thank You Visit www.sph.com.sg for more information
Slide 22: Revenue Composition 3Q FY19 and 9M FY19
Revenue Composition 3Q FY19 and 9M FY19 3Q FY19 9M FY19 Operating Revenue Composition (S$246.1m) Operating Revenue Composition (S$723.7m) Media Advertisement Revenue Composition (S$96.9m) Media Advertisement Revenue Composition (S$301.6m) * Classified includes Recruitment and Notices 22
Slide 23: Operating costs fell 1.7% compared to 9M FY18
Operating costs fell 1.7% compared to 9M FY18 S$’m 9M FY19 Operating Expenditure Cost Composition (S$585.7m) Newsprint 2.1 Other Production costs 8.6 Staff Costs 13.2 Premises Costs 9.4 Depreciation 0.5 Other Operating Expenses* 9.5 Impairment Costs 0.5 Finance costs 8.7 * mainly due to absence of r
Slide 24: Rising monthly consumption at lower cost
Rising monthly consumption at lower cost Average Newsprint Charge-Out Price & Monthly Consumption 24
Slide 25: Staff costs shaved off 5.0% compared with 9M FY18
Staff costs shaved off 5.0% compared with 9M FY18 Change 9M FY19 9M FY18 % Headcount as at end of each period 4,052 4,130 (1.9) Staff Costs (S$’000) 251,594 264,810 (5.0) 25
Slide 26: Weaker 3Q margins on lower media revenue
Weaker 3Q margins on lower media revenue S$’ m Operating Profit and Operating Margin (%) * 140 40.0% 120 35.0% 30.0% 100 25.0% 80 20.0% 60 15.0% 40 10.0% 20 5.0% - 0.0% 3Q 2015 3Q 2016 3Q 2017 3Q 2018* 3Q 2019 Operating Profit Operating Margin * Excluding impairment charges on goodwill and intangibl
Slide 27: Balance Sheet
Balance Sheet Group Investible Fund (S$412m) As at 31 May 2019 Funds recycled to focus on investments in property, digital and other areas. Cash proceeds of S$28.2m from disposal of investments. Cash redeployed towards UK student accommodation investments. 27
Singapore Press Holdings — Q3 FY2019 Earnings Presentation on 6ix