Nine Entertainment Co. Holdings Limited · ASX:NEC
Nine Entertainment — Macquarie Australia Conference 2016
16 slides from Nine Entertainment's conference presentation, May 5, 2016
Slide 1: Macquarie Australia Conference
Macquarie Australia Conference Hugh Marks CEO Nola Hodgson Head of Investor Relations 5 May 2016 2016
Slide 2: Disclaimer
Disclaimer Important notice and disclaimer achieved. Forward looking statements are provided as a general guide This document is a presentation of general background information only, and should not be relied on as an indication or guarantee of about the activities of Nine Entertainment Co. Holdings
Slide 3: Investment highlights
Investment highlights 1 A leading platform in the Australian FTA TV industry with fully owned digital capability 2 Evolving to the leading premium video and advertising company in Australia 3 Slate of leading local and international news, sport, reality and drama content 4 Programming efficiency to
Slide 4: Business evolution creates opportunities
Business evolution creates opportunities FTA TV – 85-90% of FY15 revenue/EBITDA Digital – 10-15% of FY15 revenue/EBITDA • 9’s Metro FTA TV share of c38% of a $3b market. • 9’s Digital ad revenue share of c8% of a $1.8b market. Likely to be low growth (at best) for the medium term Strong growth expec
Slide 5: The Australian FTA market is different
The Australian FTA market is different • Three commercial FTA licences and a moratorium Pay TV in Australia has limited reach on new licences • Pay TV is a monopoly in Australia, and has been • FTA TV is genuinely free – consumers don’t need a operating for more than 20 years cable or dish to receiv
Slide 6: Content evolves as consumption habits change
Content evolves as consumption habits change • Composition of prime time has evolved significantly over Prime time content, current1 the past 10 years Other • Ten years ago, around half of Nine’s prime time Drama 10% schedule was international content 4% News • Today, a greatly reduced reliance on i
Slide 7: Renewed focus on costs
Renewed focus on costs TV cost distribution • Total TV cost base c$1b Licence fees News & • Split 30% non-programming : 70% programming 7% Current Affairs 17% • Programming accountability enhanced under new management Non- Program by program P&L will ensure broader focus programming 21% • Change in
Slide 8: Business must be viewed differently
Business must be viewed differently • NRL a great example – decision to simulcast • $20m revenue in CY16 and CY17 from simulcast • Foxtel must carry 8 minutes each game of Nine’s ads NRL audiences, rounds 1-8, 2016 2015 % chg Sydney/Brisbane Nine 404,525 465,596 -13% Fox Sports 136,045 audiences Com
Slide 9: Strong operational performance from Digital
Strong operational performance from Digital • Australia’s leading multi-medium new brand, 9News and an innovative News Alerts app • Launched 9Now, a world class streaming and AVOD product, enabling all Australians to consume our content • Long form VOD (Video On Demand) now has meaningful audiences
Slide 10: History in using FTA TV to build digital brands
History in using FTA TV to build digital brands • NEC has a strong track record of using media assets to build market leading digital brands • Television remains the most effective way to address mass audiences • The value of digital businesses built is almost $10b • Currently investments in Yellow
Slide 11: Stan's growth momentum continues
Stan’s growth momentum continues • Leading line-up of first run, exclusive and original programming • Highly differentiated content offering with long term exclusive rights to the world’s best TV series and world class local productions • Key milestones/achievements: – This month Stan will mark its
Slide 12: FTA in FY16 – Tough start to the year
FTA in FY16 – Tough start to the year • Four years of market leadership in key advertiser • Marginal improvement since April 5 trading update2 demographics (CY12-15) Audiences: 25-54s +2% • FTA Metro advertising revenue share growth to 38.4%1 18-49s +3% but not fully reflective of this demographic s
Slide 13: Two recent announcements
Two recent announcements • New affiliate agreement with Southern Cross Austereo • Licence fee relief – 5 year agreement from 1 July 2016 – Government has announced a 25% cut in – Broadcasts Nine’s metro TV content into licence fees regional Queensland, Southern NSW and – 4.5% reducing to 3.375% for
Slide 14: Key strategic initiatives
Key strategic initiatives NEC Group core focus Regulatory opportunities • World class, New platforms • Licence fee reduction announced with 2016 budget – Streaming and AVOD service, 9Now Potential of further reductions to follow – SVOD - Stan • Reach rule/2 out of 3 • Broadening content Capital Mana
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Slide 16: Nine Entertainment Co.
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