Nine Entertainment Co. Holdings Limited · ASX:NEC
Nine Entertainment — H1 FY2024 Earnings Presentation
30 slides from Nine Entertainment's earnings presentation, Feb 22, 2024
Slide 1: FY24 Interim Results
FY24 Interim Results 22 FEBRUARY 2024
Slide 2: Mike Sneesby, Chief Executive Officer
Mike Sneesby Chief Executive Officer
Slide 3: Nine - Content Creation at Scale
3 Nine - Content Creation at Scale News, Current Affairs, Sport Original Dramas Lifestyle Entertainment Marketplaces Investigative Journalism Paris 2024 Olympic and Paralympic Games ADVERTISING | SUBSCRIPTION | LICENSING | TRANSACTIONS
Slide 4: Nine's content reaches 20m people each month
4 A leading #1 Commercial Australian Streaming share4 Nine’s content Property Marketplace Digital Audio No.1 Metro No.1 BVOD reaches 20m people FTA Audience each month3 Network1 Share2 (60%) Creating the Leading local future of SVOD service automotive in Australia Australia’s No.1 Australia’s No.1 L
Slide 5: Audience Data Underpins Digital Growth & Fuels AI Initiatives
5 Audience Data Underpins Digital Growth & Fuels AI Initiatives FUEL AI INITIATIVES AUDIENCE GROWTH Focussed on opportunities to: Based on content, product & communication preferences: • Fuel marketing activity & audience growth • Uncover new content opportunities • Aimed at acquiring and retaining
Slide 6: Strong growth in Digital and Subscription & Licensing revenues
6 Strong growth in Digital and Subscription & Licensing revenues DIGITAL – 48% OF GROUP REVENUE TRADITIONAL MEDIA - SOLID PERFORMANCE IN A CHALLENGING MARKET Up 5% with growth across all key digital revenue streams – Clear audience growth at FTA in Total People and key demographics Streaming, Metro
Slide 7: Matt Stanton, Chief Financial and Strategy Officer
Matt Stanton Chief Financial and Strategy Officer
Slide 8: Group Results – Growth in Digital & Subscription, offset by weaker advertising market
8 Group Results – Growth in Digital & Subscription, offset by weaker advertising market Group Revenue Group EBITDA Group EBITDA H1 Dividend $1.4B $316M Margin 4.0 CPS (-2%) (-15%) 23.1% (-2.0cps) (-3.3 pts) A$M H1 FY24 H1 FY23 VARIANCE REVENUE1 1,371.3 1,405.5 (2%) GROUP EBITDA1 316.1 370.5 (15%) EB
Slide 9: Across the wholly-owned Group - ~$28m of underlying costs removed
9 Across the wholly-owned Group - ~$28m of underlying costs removed $m Savings implemented across the half = 9% of ex Stan cost base
Slide 10: Specific Items
10 Specific Items A$M H1 FY24 DOMAIN - REFER DOMAIN ACCOUNTS (ASX:DHG), 14TH FEB 2024 (1.5) INVENTORY WRITE-DOWNS AND PROVISIONS (46.7) RESTRUCTURING COSTS (4.9) NET PROFIT ON SALE OF INVESTMENTS AND OTHER ASSETS 1.5 TOTAL SPECIFIC ITEMS BEFORE TAX (51.6) TOTAL TAX RELATING TO SPECIFIC ITEMS 15.9 NE
Slide 11: Timing Impacts on First Half Cash Flows Expected to Unwind through CY24
11 Timing Impacts on First Half Cash Flows Expected to Unwind through CY24 Reported Cash Adjusted Cash H1 FY24 Conversion1 Conversion1,2 Capex1 74% 98% $45.1M H1 FY24 H1 FY24 H1 FY23 A$M DOMAIN REPORTED ADJUSTED1 ADJUSTED1 EBITDA (BEFORE ASSOCIATES) 318.0 67.6 250.4 321.3 WORKING CAPITAL RELATING TO
Slide 12: Balance Sheet Remains Strong with Capacity
12 Balance Sheet Remains Strong with Capacity AS AT 31ST DECEMBER 2023, A$M CONSOLIDATED GROUP DOMAIN WHOLLY OWNED GROUP INTEREST BEARING LOANS AND BORROWINGS 672.4 209.4 463.0 LESS: CASH AND CASH EQUIVALENTS (134.0) (33.6) (100.4) NET DEBT/(CASH) 538.4 175.8 362.6 NET LEVERAGE 1.0X 1.4X 0.8X Refer
Slide 13: Divisionals
Divisionals FY24 Interim Results
Slide 14: Total Television – Strong revenue share performance supported by audience growth
14 Total Television – Strong revenue share performance supported by audience growth Revenue1 contribution – H1 FY24 Total Market3 Nine Revenue of $1.5b $602M Digital (-10%) (-9%) A$M H1 FY24 H1 FY23 VARIANCE REVENUE FTA 508.3 573.1 (11%) 9NOW 93.8 88.6 +6% EBITDA1,2 contribution – H1 FY24 TOTAL TV R
Slide 15: Free to air BVOD
15 Free to air BVOD #1 #1 #1 +14%2 +20%3 +48%4 Ratings Share Ratings Share Ratings Share Daily Active Total Minutes Total Live 25-54s1 16-39s1 GB+CH1 Users Minutes Growth in audience5 – Total People, 16-39s ~60% Minutes streamed are Live Metro FTA Market Metro Revenue Share BVOD Market BVOD Market S
Slide 16: Stan – Positive jaws in a competitive market
16 Stan – Positive jaws in a competitive market Revenue1 contribution – H1 FY24 Paying Revenue Growth in Subscribers Growth overall ARPU >2.2m +11% +11% A$M H1 FY24 H1 FY23 VARIANCE REVENUE 228.4 206.4 +11% COSTS – STAN ENTERTAINMENT 166.9 150.7 (11%) COSTS – STAN SPORT EBITDA1,2 contribution – H1 F
Slide 17: Domain – positive turnaround in Melbourne and Sydney
17 Domain – positive turnaround in Melbourne and Sydney, benefitting from double digit yield increase Revenue1 contribution – H1 A$M H1 FY24 H1 FY23 VARIANCE FY24 REVENUE RESIDENTIAL 138.3 119.4 +16% MEDIA, DEVELOPERS & 26.8 24.7 +9% COMMERCIAL AGENT SOLUTIONS 18.9 20.4 (7%) DOMAIN INSIGHT 9.4 8.4 +
Slide 18: Nine Publishing – strong performance from subscriptions
18 Nine Publishing – strong performance from subscriptions Revenue1 contribution – Digital Active Subscriber H1 FY24 revenues Subscriptions ARPU4 ~ 61% of ~ 480k3 (+5% on pcp) total revenue (+7% on pcp) A$M H1 FY24 H1 FY23 VARIANCE DIGITAL SUBSCRIPTION & LICENSING 96.7 89.0 +9% REVENUE EBITDA1,2 con
Slide 19: Total Audio – Strong growth in streaming revenues
19 Total Audio – Strong growth in streaming revenues Radio Nine Radio Digital 69m Market1 Agency Revenue Revenue Streams2 Share -4% 16% Up 45% On PCP Up 18% On H1 FY23 A$M H1 FY24 H1 FY23 VARIANCE REVENUE BROADCAST 49.6 52.1 (5%) DIGITAL incl. STREAMING 2.9 2.0 +45% TOTAL RADIO REVENUE 52.5 54.1 (3%
Slide 20: Trading Update & Outlook
Trading Update & Outlook Mike Sneesby
Slide 21: Trading Update
21 Trading Update Total Television Stan Domain Publishing Radio Strong start to the 2024 TV year for Resilient subscriber performance Ongoing growth in new `for sale’ Ongoing strength in digital Nine’s Q3 Radio broadcast Nine with growth in both FTA and from Stan in a competitive market listings in
Slide 22: Key Strategic Priorities
22 Key Strategic Priorities Creating INTEGRATED Value CONTENT AUDIENCE DATA Through ECOSYSTEM Growth Capturing Value TRANSACTIONS ADVERTISING SUBSCRIPTIONS PLATFORMS AND LICENSING (MARKETPLACES) Through Supported PEOPLE PRODUCT & TECHNOLOGY APPLICATION OF AI SIMPLIFICATION POWER OF THE NINE GROUP By
Slide 23: At Nine, we shape culture by sparking conversations
At Nine, we shape culture by sparking conversations, challenging perspectives, informing and entertaining our communities. We bring people together by celebrating the big occasions and connecting the everyday moments. Australia Belongs Here
Slide 24: Appendices
Appendices FY24 Interim Results
Slide 25: Appendix 1: Group Divisional Results
25 Appendix 1: Group Divisional Results Revenue1 contribution – H1 FY24 H1 FY24 BROADCAST STAN PUBLISHING DOMAIN3 CORPORATE ASSOCIATES INTERSEGMENT TOTAL A$M REVENUE 654.6 228.4 288.7 207.1 - - (7.5) 1,371.3 PCP 715.8 206.4 301.8 186.6 1.8 - (6.9) 1,405.5 % CHG (9%) +11% (4%) +11% NM - (9%) (2%) EBI
Slide 26: Appendix 2: Linear TV Ratings
26 Appendix 2: Linear TV Ratings 2023, COMMERCIAL RATINGS SHARE NETWORK PRIMARY CHANNEL METRO MARKETS Seven Nine Ten Seven Nine Ten SURVEY 2023 (WEEKS 7-48, 6PM- TOTAL 40.0 38.7 21.3 40.7 39.6 19.7 EXCL EASTER) MIDNIGHT PEOPLE 25-54S 35.0 39.0 26.0 36.3 39.2 24.5 16-39S 35.5 39.2 25.3 36.3 39.8 23.8
Slide 27: Appendix 3: Forward Estimates
27 Appendix 3: Forward Estimates ITEM FY 24 CORPORATE COSTS – WHOLLY OWNED ~$37M TO 40M DEPRECIATION & AMORTISATION - REPORTED ~$155M TO 165M INTEREST EXPENSE - REPORTED ~$50-55M TAX RATE - REPORTED ~30% CAPEX (EX DOMAIN) ~$90 TO 100M DIVIDEND 60-80% OF NET PROFIT AFTER TAX, BEFORE SPECIFIC ITEMS
Slide 28: Appendix 4: Glossary
28 Appendix 4: Glossary ARPU – Average Revenue Per User Key demographics – All People 25-54, 16-39, 18-49 and Grocery Paying subscribers (Stan) - Subscribers for whom Stan receives a Broadcast – Broadcast comprises Nine Network, 9Now and Nine Buyers with Children payment for the subscription during
Slide 29: Important notice and disclaimer
29 Important notice and disclaimer Important Notice and Disclaimer This document is a presentation of general background information about the activities of Nine Entertainment Co. Holdings Limited (“NEC”) current at the date of the presentation, (22 February 2024). The information contained in this
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