Nine Entertainment Co. Holdings Limited · ASX:NEC
Nine Entertainment — Macquarie Australia Conference 2015
21 slides from Nine Entertainment's conference presentation, May 7, 2015
Slide 1: ASX Announcement
ASX ANNOUNCEMENT Thursday 7th May 2015 The Manager Company Announcements Office Australian Securities Exchange 20 Bridge Street SYDNEY NSW 2000 ELECTRONIC LODGEMENT Dear Sir or Madam, Nine Entertainment Co. Presentation – Macquarie Australia Conference 2015 Attached is a copy of a presentation to be
Slide 2: Macquarie Australia Conference
Macquarie Australia Conference Simon Kelly COO/CFO 7 May 2015 Nola Hodgson Head of Investor Relations 1
Slide 3: Disclaimer
Disclaimer Important notice and disclaimer and unknown risks, uncertainty and other factors which can cause This document is a presentation of general background information NEC’s actual results to differ materially from the plans, objectives, about the activities of Nine Entertainment Co. Holdings
Slide 4: Company overview
Company overview 1 A leading platform in the Australian FTA TV industry with fully owned digital capability 2 Opportunities for increased returns through affiliate/regulatory change/licence fees 3 Exposure to an improvement in the advertising cycle 4 Stan - New SVOD joint venture with Fairfax Media,
Slide 5: Offers advertisers multiple distribution channels across NEC's wide audience base
Integrated portfolio of complementary media businesses Nine Network Nine Digital Stan and Ventures No.1 audience share position in all key A leading Australian 50:50 joint venture advertising demographics online publisher to operate an Australian SVOD service, launched January 2015 FY14 Pro Forma Gr
Slide 6: The Australian FTA market is unique
The Australian FTA market is unique • Three commercial FTA licences and a moratorium on Pay TV in Australia has limited reach new licences • Pay TV is a monopoly, and has been operating • Anti-siphoning ensures premium sport stays on FTA for c20 years • FTA TV is genuinely free – consumers don’t nee
Slide 7: TV advertising has been resilient
TV advertising has been resilient • Overall advertising industry expenditure has grown at a CAGR of 2.2% over the last 10 years (incl. Directories) • NEC operates in the two single largest segments of the advertising industry – television and online • Television’s share of total ad spend remains aro
Slide 8: Prime time content has changed markedly
Prime time content has changed markedly Prime time content, current^ m Total audience of commercial FTA 3.1 Other 13% 3.0 Drama News 5% 33% 2.9 2.8 Reality 2.7 21% 2.6 Current Affairs 2.5 12% 2006 2007 2008 2009 2010 2011 2012 2013 2014 Game shows Sport 8% 8% hr Time spent viewing FTA 3:00 • Composi
Slide 9: Sustained positive FTA ratings momentum
Sustained positive FTA ratings momentum • Six years of consistent Free To Air ratings improvement • Strong performance across the schedule led by News and Current Affairs, Sports, and Local Production • Revenue share trends follow ratings performance • Revenue share premium reflects consistency and
Slide 10: Leading platform in the Australian FTA TV industry
Leading platform in the Australian FTA TV industry • National metropolitan broadcasting network with licences in Sydney, Melbourne, Brisbane, Perth and Adelaide • Holds one of only three commercial FTA TV licences granted by the Australian government in those regions • No. 1 audience share across Ni
Slide 11: FTA regulatory and other opportunities
FTA regulatory and other opportunities Regulatory Other Reach rule Affiliates • Restricted to broadcasting to 75% of the population • Opportunity to substantially improve the economics of affiliate arrangements on renewal, without regulatory • Current affiliate agreement expires end of 2015 change •
Slide 12: Our digital future is in our hands
Our digital future is in our hands NEC took control of Mi9 on 1 November 2013 with Microsoft continuing as a strategic partner Leading online domestic publisher • Leading overall audience network with monthly reach of 12.3m^ • Leading share of online display market revenue – strong growth from onlin
Slide 13: Stan: 50:50 joint venture between Fairfax Media and Nine Entertainment Co.
• 50:50 joint venture between Fairfax Media and Nine Entertainment Co. formed in September 2014 to launch an Australian SVOD (Subscription Video On Demand) service • Consumer demand for accessible, affordable, high-quality content is on the rise • Barriers to mass market take-up of OTT VOD are falli
Slide 14: Stan content library
Stan offers the largest … and highest quality first run content library1… and SVOD exclusives 6,089 5,748 First Run TV SVOD Movies Exclusives Exclusives 4,009 ● ● ● ● TV Series ○ ◐ 1 total streamable hours, Gyde Benchmark April 2015 13
Slide 15: International Market Experience / Performance Summary - Stan
International Market Experience • Average penetration: • US: c40% of all broadband households • UK: c25% after 2-3 years • Up to 40% of subscribers take >1 service • Implies addressable market of more than 5m households in Australia within 4-5 years Performance Summary - Stan • Hit 100,000 gross sig
Slide 16: Subscriber growth will be driven by
Current Subscriber growth will be driven by: • Content catalogue • Distribution partnerships Coming Soon • Device ecosystem • Market expansion Set-top boxes Gaming consoles bundling Smart TVs 15
Slide 17: Nine Live – Sale to complete July
Nine Live – Sale to complete 31 July Comprises: Ticketek, Allphones, Nine Touring and Events and ancillary businesses Sale announced 16 April: • Sold to Affinity Equity Partners for $640m • Net proceeds to NEC of 64 cents per share Valuation: • Equated to 9x EBITDA (based on consensus analyst foreca
Slide 18: Capital Management
Capital Management Sources: Uses: • Sale of Nine Live for $640m • $150m on-market buy-back announced in February 2015 • Potential sale of Willoughby site • On-going program of on-market buy-backs • Increased dividend payout ratio from 50-60% to 80-100%, predominately franked To come: • Stan capital
Slide 19: Investment highlights
Investment highlights 1 Leading position in the Australian FTA market 2 Leverage to an improvement in the advertising market 3 Opportunities to lift returns from Affiliates and via licence fee reductions 4 Full control of a re-invigorated Digital business 5 Launch of Australia’s own SVOD service, St
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Slide 21: Nine entertainment co.
nine::: entertainment co.
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