Nine Entertainment Co. Holdings Limited · ASX:NEC
Nine Entertainment — FY2017 Earnings Presentation
24 slides from Nine Entertainment's earnings presentation, Aug 24, 2017
Slide 1: FY17 Results Briefing
F Y 1 7 R E S U LT S B R I E F I N G 24 AUGUST 2017 COMMERCIAL CONTENT STRATEGY HUGH MARKS CHIEF EXECUTIVE OFFICER GREG BARNES CHIEF FINANCIAL OFFICER MICHAEL STEPHENSON CHIEF SALES OFFICER ALEX PARSONS CHIEF DIGITAL OFFICER
Slide 2: Important Notice and Disclaimer
Important Notice and Disclaimer Forward looking statements can generally be identified by or other forecast. Nothing contained in this presentation This document is a presentation of general background the use of forward looking words such as, ‘expect’, nor any information made available to you is,
Slide 3: Key Financials
^ KEY FINANCIALS Results for FY17 Pre Specific Items, FY16 Pro Forma ^ ex licence fee benefit of $33m 3
Slide 4: Operational Highlights
4M+ REGISTERED USERS ON CONSISTENT GROW TH IN FTA RATINGS & REVENUE O P E R AT I O N A L 9NOW, REPORTING 37% STAN, NOW APPROACHING SHARE MOMENTUM HIGHLIGHTS REVENUE GROW TH 800K ACTIVE SUBS LAUNCH OF 9HONEY, ROLL-OUT OF TIGHT COST CONTROLS AUSTRALIA’S LEADING INNOVATIVE SALES AUGMENTED BY LICENCE FE
Slide 5: Nine's share momentum improving
• FTA market soft across the year • NPAT (pre-Specific Items) of $124m • Olympics impacted ad market and share • EPS up 4% (pre-Specific Items) • Nine’s share momentum improving • DPS of 9.5 cents, fully franked • FTA costs down 2%, ex licence fees • Reported FTA costs down 6% $M FY17 FY16 VARIANCE
Slide 6: Revenue down 4%; Metro FTA market down 3.7%
CONTINUING BUSINESSES, $M FY17 FY16 VARIANCE • Revenue down 4% REVENUE TELEVISION 1,080.4 1,130.0 -4% − Metro FTA market down 3.7%, Regional down 2.8% DIGITAL 154.7 149.9 +3% − 35.7% share of metro FTA market CORPORATE 2.7 2.5 - (35% H1 and 36.4% H2) TOTAL REV 1,237.8 1,282.4 -3% • Costs down 2% − L
Slide 7: Net Debt – FY2017
CONTINUING BUSINESSES, $M H1 H2 FY17 FY16PROFORMA EBITDA 119.5 85.9 205.4 199.6 WORKING CAPITAL (23.8) (30.2) (54.0) (44.7) LICENCE FEE TIMING - (34.8) (34.8) - ASSOCIATES 0.7 0.5 1.2 2.5 OPERATING CASH FLOW, PRE SPECIFIC ITEMS, TAX 96.4 21.4 117.8 157.4 AND INTEREST CASH IMPACT OF WARNER ONEROUS PR
Slide 8: Chief Sales Officer
MICHAEL STEPHENSON CHIEF SALES OFFICER
Slide 9: Number one in every key buying demographic
• Number one in every key buying demographic (P25-54, P16-39, GB+CH)1 • Total television advertising market decline of 2.7%2 • FTA Metro advertising revenue share2 of 35.7%. Q4 share of >38% • AVOD market growing at 37% as content is distributed via multiple channels • Premium revenue up 16%, as loc
Slide 10: Sport Entertainment
$ (M) 250 200 7% SPORT 150 100 50 45% E N T E R TA I N M E N T 0 2016 2017 10 Source: Calendar Year, Format Integration Revenue
Slide 11: Chief Digital Officer
11 ALEX PARSONS CHIEF DIGITAL OFFICER
Slide 12: Digital: Gross Revenue, EBITDA, Long Form Video Streams
• Gross revenue growth • Continued cost control • Consumer product development focussed on content genres of News, Sport, Entertainment and Lifestyle • Over 4m registered users for 9Now • Strong growth in video streams and revenue Total Gross Revenue 3% EBITDA 11% Long Form Video Streams 114% Nine D
Slide 13: Long Form Streams +114% YOY
Australian Ninja Warrior LONG FORM Married at First Sight STREAMS The Block The Voice Doctor Doctor, +114% YOY Hyde & Seek 9Now Launch The Voice Chromecast Apple TV Sony TV Launch 9NOW REVENUE Sony PS4 +38% YOY Subscribers LF Streams 13
Slide 14: Active Subs ~800K Subscription
• Maintaining strong growth trajectory, approaching 800,000 active subscribers • Introduction of tiers and price increase positive ARPU impact, with limited churn offset • Positive net sub adds every week through price increase • Strong content line-up for FY18 including Wolf Creek 2, Romper Stomper
Slide 15: FY18 Outlook: Television, Digital, Group EBITDA
• TV revenues are trending to +15% growth for the September quarter • Digital revenues are pacing around 8% ahead for the same period. • Metro FTA market down 1-2% in FY18 TELEVISION • Nine’s share of at least 37.5% • Broadly flat costs, ex spectrum fees • Growth in 9Now and Digital Publishing to of
Slide 16: Programme viewing performance
(AUD) 2500000 2000000 2.0m 1.7m 1500000 1.4m 1.4m 1000000 500000 0 Married At First Sight The Voice Australian Ninja Warrior The Block (to date) Overnight Time shift to 28 day Encore VPM 16 Refer to glossary in Appendix 5 for definitions.
Slide 17: Broadcast Television, Video on Demand, Publishing, Content Production
BROADCAST VIDEO ON DIGITAL CONTENT TELEVISION DEMAND PUBLISHING PRODUCTION Australia’s leading FTA Unique mix of leading Diverse portfolio of Television content network in the key local advertising and leading digital platforms production and advertiser subscription based on across News, Sport, dist
Slide 18: Appendices
18 APPENDICES
Slide 19: Reported Specific Items
REPORTED REPORTED REPORTED $M H1 FY17 H2 FY17 FY17 NET IMPAIRMENT CHARGE NON-CURRENT ASSETS (260.0) - (260.0) CLOSE OUT OF WARNERS CONTRACT (NPV) (84.9) (0.8) (85.7) RESTRUCTURING COSTS (3.9) (3.3) (7.2) WITHHOLDING TAX PROVISION RELEASE 10.7 - 10.7 DERIVATIVE REVALUATION - (9.5) (9.5) OTHER (0.4) (
Slide 20: Programming rights costs and simulcast revenue
$M FY17 FY18 FY19 FY20 FY21 FY22 FY23 SEASONS 2013-2017 CASH COSTS (50.3) (6.0) P & L COSTS (91.6) (47.3) FOXTEL SIMULCAST REVENUE 20.0 9.0 SEASONS 2018-2022 CASH COSTS (50.0) (63.8) (96.3) (111.2) (107.5) (116.2) (30.0) P & L COSTS (47.5) (102.5) (117.5) (120.0) (122.5) (65.0) 20 Refer to glossary
Slide 21: Reported to continuing business reconciliation
REPORTED REPORTED LESS DISCONTINUED CONTINUING BUSINESS1 CONTINUING BUSINESS1 $M FY17 FY16 BUSINESSES FY16 VARIANCE REVENUE 1,237.8 1,339.5 57.1 1,282.4 -3% GROUP EBITDA 205.6 209.4 7.7 201.7 +2% NET INTEREST1 (5.6) (5.2) (2.2) (2.9) +93% TAX (41.1) (47.3) (1.0) (46.3) +11% NPAT, BEFORE SPECIFIC ITE
Slide 22: Net debt and leverage
ACTUAL ACTUAL ACTUAL $M 30 JUN 2017 31 DEC 2016 30 JUN 2016 INTEREST BEARING LOANS AND BORROWINGS 291.2 300.8 220.5 LESS: CASH AND CASH EQUIVALENTS 66.7 123.3 42.9 NET DEBT/(CASH) 224.5 177.5 177.6 NET LEVERAGE 1.1X 0.9X 0.8X 22 Refer to glossary in Appendix 5 for definitions. Totals may not add due
Slide 23: Appendix 5: Glossary
ARPU – Average Revenue Per User Continuing Businesses – Excludes the operations of Operating Cash Flow – EBITDA adjusted for changes in Nine Live working capital and other non-cash items plus dividends Contra – Advertising time offered in lieu of cash payment received from Associates. Excludes cash
Slide 24: Nine
:33:Nine
Nine Entertainment Co. Holdings — FY2017 Earnings Presentation on 6ix