Slide 1: HY23 Results Presentation
HY23 Results Presentation 24 August 2023 1
Slide 2: Agenda
Agenda 1 Executive Summary 2 HY23 Financial Performance 3 HY23 Operational Performance 4 Trading Update
Slide 3: Executive Summary
Executive Summary Delivering milestones for continued success • ARN increasing audiences across all audio formats – Radio +4%; Podcasting +23% Growing • #1 broadcast network position (4 out of 5 surveys); #1 podcast publisher (39 in a row) audiences • 12% growth in iHeartRadio registered user base –
Slide 4: Sound fundamentals in a challenging macroeconomic environment
Sound fundamentals in a challenging macroeconomic environment. Revenue1 EBITDA1,2 EBIT1,2 EPS2 $165.9M $35.5M $25.3M 4.8cps - 2% - 19% - 27% - 40% NPAT1,2 Operating cash Interim Dividend Net Debt conversion3 $14.6M $52.4M 86.5% 3.5cps - 31% - 33% - 5.2% Fully franked 1. Percentage change prepared on
Slide 5: Financial Performance
FY23 Financial Performance Andrew Nye 5
Slide 6: Statutory results
Statutory results % change A$ million 2023 2022 % Change Pro forma Statutory profit up 97% on disposal of Soprano Revenue before finance income 165.9 172.0 (4%) (2%) • Pro forma column removes Soprano’s NPAT and HK Tramways in 2022. Other income 0.9 1.6 (45%) (45%) • Revenue down $6.1m (-4%); -2% on
Slide 7: ARN Group – Metro, Regional, Digital
ARN Group – Metro, Regional, Digital A$ million 2023 2022 % Change Metro 90.2 97.2 (7%) Improving metro revenue share into Q2 Regional 52.2 54.2 (4%) • Total advertising revenues declined 4% - Metro revenues -7% vs market back 4.3%; improved Digital 8.8 6.4 37% ARN share performance last 3 months To
Slide 8: ARN Group – Metro, Regional, Digital
ARN Group – Metro, Regional, Digital Strong broadcast radio margin • Demonstrates ongoing strength of ARN broadcast radio business, A$ million 2023 2022 % and management focus on maintaining earnings in challenging Change market. • Radio cost growth restricted to 2% in response to challenging Radio
Slide 9: Digital Audio
Digital Audio 37% revenue growth in the period A$ million 2023 2022 % • Enhancements to collateral, product, team capacity and Change training in Q1 Total revenue 8.8 6.4 37% • Improved revenue growth in Q2, following a slow Q1 Revenue related costs (5.8) (3.8) 53% • Good growth in podcast revenues,
Slide 10: Other investments
Other investments Cody Outdoor – Hong Kong • Revenues & earnings +30% & +51% respectively on a like basis (1,2) Local • Western Harbour Tunnel (WHT) contract not retained Local currency following competitive tender; decision taken not to % currency Excl Trams A$ million 2023 2022 change % change % c
Slide 11: Group cash flow
Group cash flow A$ million Jun 2023 Jun 2022 Highly cash generative business Net cash flow from operations 30.7 44.2 Principal lease payments (5.6) (7.6) • Operating cash flows of $30.7m, down 31% on lower EBITDA Capex net of proceeds on sale of fixed assets (3.4) (3.4) • Strong operating cash conve
Slide 12: Group balance sheet
Group balance sheet A$ million Jun 2023 Dec 2022 Change Cash and cash equivalents 22.6 23.9 (1.2) Strong balance sheet with leverage of 0.8x(1) Receivables 67.9 65.7 2.2 • Net debt $52 million and 0.8x(1) leverage Tax asset 4.6 – 4.6 • Good tenure and undrawn limits remaining on Group financing faci
Slide 13: HY23 Operational Performance
HY23 Operational Performance
Slide 14: All Audio content strategy continues to grow audiences
All Audio content strategy continues to grow audiences More people, listening more often across more formats 79% of Australians 6 million Australians Over 69% of podcast listeners, listen to radio stream online radio listen to iHeart podcasts ARN Radio Growth Streaming Radio TLH Monthly Podcast Grow
Slide 15: Incremental listening indicates incremental revenue
Incremental listening indicates incremental revenue. Volume of digital briefs up 67% YOY Total Audio vs Terrestrial Streaming Radio Podcast Advertising Revenue ($m) Revenue ($m) Revenue ($m) 1600 200 5% CAGR 37% CAGR 200 1400 180 180 160 1200 160 140 15% CAGR 140 1000 120 1% CAGR 120 800 100 100 600
Slide 16: Talent is key differentiator
Talent is key differentiator. Brisbane KIIS 97.3 Perth Sydney 96FM KIIS 106.5, Adelaide WSFM, CADA MIX 102.3, CRUISE 1323 Melbourne KIIS101.1 GOLD 104.3 KIIS1065 KIIS Network Gold 104.3 #1 Commercial Radio Network (AM/FM) for 4 of last 5 surveys #1 overall station twice Highest cumulative reach ever
Slide 17: Fiercely live and local; Unlike any other
Fiercely live and local; Unlike any other Business integration nearing completion Committed to live and local Quality connections with Regional integration delivering content strategy communities improved ease of trading • 79% of regional population 2022 • ARN syndicated shows launched • Agency Upfr
Slide 18: Valuable regional audiences converting to revenue
Valuable regional audiences converting to revenue ‘Live & Local’ content engaging audiences and clients • Over the last 10 years, agency audio Resilient local regional Gaining regional $2m of $5m national spend grown from 9% to 15% share of total regional media spend revenue on strong share in Top 8
Slide 19: Low capex model on digital audio
Low capex model on digital audio Targeting cashflow breakeven run-rate by the end of 2024 Continuing audience growth • 2.5 million registered users +12% YOY • Stream starts up +8.8% YOY • Monthly podcast downloads increased +25.3% YOY • #1 Publisher for 39th consecutive ranker • #1 podcast across 6
Slide 20: Well positioned in tough market
Well positioned in tough market • Growing audiences across all audio platforms – including radio • On-air talent continue to deliver • Incremental revenue opportunities in digital audio • Unique localised content strategy key differentiator • Strong regional revenue performance – - Growing commercia
Slide 21: Trading update
Trading update Q3 radio revenues pacing in line with prior comparative period following above market performance in July. Briefing activity suggests a similar trajectory into the final quarter. H2 digital audio revenues are pacing to +25% year on year. Total ARN people & operating costs in challengi
Slide 22: ARN Media Limited / ABN 95 008 637 643
ARN Media Limited / ABN 95 008 637 643
Slide 23: Disclaimer
Disclaimer This document has been prepared by ARN Media Limited (ARN Media) to provide general information about the activities of ARN Media and its subsidiaries at the time of release of this document. Unless specified otherwise, information in this document refers to the relevant financial period
Slide 24: Appendices
4 Appendices
Slide 25: Reconciliation of segment result to statutory result
Reconciliation of segment result to statutory result Segment result Significant items Statutory result A$ million 2023 2022 2023 2022 2023 2022 Revenue before finance income 165.9 172.0 – – 165.9 172.0 Other income 0.9 1.6 39.1 5.3 40.0 6.9 Share of associate profits 2.3 5.2 – – 2.3 5.2 Costs (133.5
Slide 26: Significant items
Significant items Current year includes: A$ million 2023 2022 • Gain on sale of Soprano net of transaction costs Gain on sale of Soprano 39.1 – • Integration costs of FY22 acquisition of ARN Regional business from Grant Broadcasters Fair value adjustment on Lux Group shares – 5.3 • Implementation co
Slide 27: AASB 16 Leases – 2023
AASB 16 Leases – 2023 AASB 16 Leases AASB 16 Leases AASB 16 Leases Result without Reported A$ million Adjustment Adjustment Adjustment adoption of 2023 ARN HK Outdoor Investments AASB 16 ARN 35.1 (2.8) – – 32.3 Hong Kong 4.3 – (3.4)2 – 0.9 Investments 0.6 – – (0.2) 0.5 Corporate (4.5) – – – (4.5) Un
Slide 28: ARN Media Corporate
ARN Media Corporate • Corporate costs lower following revised treatment for incentive A$ million 2023 2022 % change costs; will be expensed at time of award in December Salary and wages 1.9 1.8 7% • FY23 Corporate costs expectation remains unchanged at ~$10m to $11m, subject to on-target achievement
Slide 29: AASB 16 Leases – 2022
AASB 16 Leases – 2022 AASB 16 Leases AASB 16 Leases AASB 16 Leases Result without Reported A$ million Adjustment Adjustment Adjustment adoption of 2022 ARN HK Outdoor Investments AASB 16 ARN 45.9 (2.8) – – 43.1 Hong Kong 4.7 – (4.4)2 – 0.3 Investments 3.2 – – (0.1) 3.2 Corporate (5.4) – – – (5.4) Un