Southern Cross Media Group Limited · ASX:SXL
Southern Cross Media — FY2014 Earnings Presentation
66 slides from Southern Cross Media's earnings presentation, Aug 20, 2014
Slide 1: FY14 Investor Presentation
For personal use only SOUTHERN CROSS AUSTEREO FY14 INVESTOR PRESENTATION 1
Slide 2: Results Summary
RESULTS SUMMARY • Reported revenues down 0.3%, adjusted revenues up 0.5% For personal use only • Reported EBITDA of $179.7m is down 14.8%, adjusted EBITDA of $187.8m is down 5.4% • Reported NPAT down 408.4%, adjusted NPAT down 5.6% to $79.7m (in line with market guidance) • Significant items have im
Slide 3: Headline Achievements
For personal use only HEADLINE ACHIEVEMENTS GALEY, MATT & CHARLI, SEA FM 90.9 3
Slide 4: Headline Achievements: Financial
HEADLINE ACHIEVEMENTS For personal use only Financial • New 5 year $650m debt facility with reduced margins - delivered H2 interest savings of $4.0m • Further reduction in net debt, down $11.8m to $594.4m • Leverage ratio of 2.93 remains well below covenant levels • Despite significant investment in
Slide 5: Headline Achievements: Ratings
HEADLINE ACHIEVEMENTS For personal use only Ratings • Triple M Network o 2.7m listeners nationally and the #1 network for men around the country 1 o #1 Breakfast show in Melbourne & Perth 1 o Melbourne awarded the world’s most innovative radio station at 2014 Worldwide Radio Summit • Today network c
Slide 6: Market Leading Online & Social Media Footprint
HEADLINE ACHIEVEMENTS Market Leading Online & Social Media Footprint Driving Listeners & Engagement For personal use only • 17.3% year on year growth in Digital revenue • SCA has 4 of the top 5 most engaging Facebook pages in Australia, and 6 of the top 10 1 • 112% YOY Growth in Australian Average D
Slide 7: FY14 Financial Results
For personal use only FY14 FINANCIAL RESULTS HEIDI, WILL & WOODY, 92.9 7
Slide 8: Financial Result Components
FINANCIAL RESULT COMPONENTS PROVIDING CLARITY For personal use only FY14 REPORTED PROFIT/(LOSS) Revenue 640.8 EBITDA 179.7 SIGNIFICANT ITEMS NPAT (296.0) PROFIT/(LOSS) Revenue - EBITDA (8.1) FY14 ADJUSTED NPAT (375.7) PROFIT/(LOSS) Revenue 640.8 EBITDA 187.8 NPAT 79.7 METRO REGIONAL CORPORATE PROFIT
Slide 9: Statutory Accounts
For personal use only STATUTORY ACCOUNTS THE GRILL TEAM, SYDNEY 9
Slide 10: Group Reported Statutory Results
GROUP REPORTED STATUTORY RESULTS For personal use only $ MILLIONS FY14 FY13 % VAR. FAV/(UNFAV) FY14 Significant item: Provision for onerous contracts. Revenue 640.8 642.7 (0.3%) FY13 Significant item: profit on sale of Sunshine Coast radio business. Expenses (453.0) (441.5) (2.6%) Equity Accounted P
Slide 11: Significant Items
SIGNIFICANT ITEMS For personal use only FY14 FY13 $ MILLIONS FAV/(UNFAV.) FAV/(UNFAV.) Profit Profit Net Profit Net Profit EBITDA Before EBITDA Before After Tax After Tax Tax Tax Provision for onerous (8.1) (8.1) (5.7) contracts Impairment of intangibles (392.5) (392.5) and investments Impairment of
Slide 12: Group Results Analysis
GROUP RESULTS ANALYSIS $ MILLIONS Reported FY14 FY14 Reported Discontinued FY13 FY13 % Variance For personal use only FY14 Significant Adjusted FY13 Ops1 Significant Adjusted FAV/(UNFAV.) Items Items Revenue 640.8 640.8 642.7 (5.0) 637.7 0.5% Expenses (453.0) (453.0) (442.2) 3.1 (439.1) (3.2%) Signi
Slide 13: Underlying FY13 Results
UNDERLYING FY13 RESULTS For personal use only Impact of Sunshine Coast FY13 FY13 Results Presentation Reported Sunshine Coast As presented in $ MILLIONS FY13 One Off Normalisation August 2013 Full Year Profit Guidance Events Estimate Comparative Impact of One off events: Revenue 642.7 5.3 2.5 650.5
Slide 14: Cashflow
CASHFLOW For personal use only $ MILLIONS Cashflow Outlook • Benefits of refinance expected to reduce Opening Cash 102.9 financing cashflows to $40.0-$42.0m in FY15. Cash from Operations 194.9 • Number of operational efficiency projects will Payments for Non Current Assets (27.2) conclude in FY15 an
Slide 15: Debt Facilities
DEBT FACILITIES For personal use only Benefits of 2014 refinance June Dec • No mandatory repayments $ MILLIONS 2014 2013 • Savings from refinance • Annual interest savings of $4.2m (2.5- Drawn Debt 650.0 693.0 3.0x) & $5.5m (above 3.0x) Less Cash (55.6) (86.8) • $3.7m in annual savings from reduced
Slide 16: Covenants & Working Capital
COVENANTS & WORKING CAPITAL Interest Cover 5 Leverage Ratio For personal use only 4.83 4.5 4.63 4.61 4.08 4.13 4.25 4.0 4 3.6 3.6 3.6 3.6 3.6 3.5 3.5 3.25 3.15 3.00 2.96 2.93 2.90 2.90 2.90 2.90 2.90 2.75 2.86 3 2.62 2.67 2.66 2.5 June 2011 Dec 2011 June 2012 Dec 2012 June 2013 Dec 2013 June 2014 Ju
Slide 17: EPS Analysis
EPS ANALYSIS For personal use only Cents per share FY14 FY13 adjusted EPS 11.3 12.0 Significant Items (53.3) 1.5 Discontinued Operations1 - 0.1 Reported EPS (42.0 ) 13.6 Weighted average # of shares (m’s) 705.1 704.8 Actual closing # of shares (m’s) 705.2 704.9 1 Sunshine Coast Radio (divested March
Slide 18: Operational Review
For personal use only OPERATIONAL REVIEW FIFI & DAVE, FOX FM 18
Slide 19: Operational Review – Adjusted Results
OPERATIONAL REVIEW – ADJUSTED RESULTS For personal use only Full Year Full Year % Variance $ MILLIONS FY14 FY13 FAV/(UNFAV.) Regional Revenue 363.1 361.4 0.5% Includes revenue from: • Canberra Radio JV Metro Revenue 248.7 250.3 (0.6%) • SCA Telco business Corporate Revenue 29.0 26.0 11.5% • Sales re
Slide 20: Metro – Adjusted Results
METRO – ADJUSTED RESULTS For personal use only Full Year Full Year % Variance • Triple M network strengthening and growing market $ MILLIONS share, largely offsetting the revenue impact of the FY14 FY13 FAV/(UNFAV.) ratings challenges on the Today network Total Revenue 248.7 250.3 (0.6%) • Digital r
Slide 21: Regional – Adjusted Results
REGIONAL– ADJUSTED RESULTS For personal use only Full Year Full Year % Variance $ MILLIONS FY14 FY13 FAV/(UNFAV.) TV 208.4 208.2 0.1% • Special Events and diversification of TV revenues Radio 154.7 153.2 1.0% driving growth in a challenging ratings environment • Regional radio growth driven by local
Slide 22: Corporate – Adjusted Results
CORPORATE – ADJUSTED RESULTS Full Year Full Year % Variance $ MILLIONS For personal use only FY14 FY13 FAV/(UNFAV.) Total Revenue 29.0 26.0 11.5% Broadcast & Production (2.9) (2.9) - Selling, General and Admin is net of cost recovery charge to Metro and Regional, increase relates to Employee (32.7)
Slide 23: Key Revenue Analysis
For personal use only KEY REVENUE ANALYSIS CLAIRSY, SHANE & KYMBA 23
Slide 24: Metro Radio Advertising Revenues
METRO RADIO ADVERTISING REVENUES National/Local Split For personal use only • Regeneration of the Today network is well underway 261.5 249.1 229.6 234.9 with 60% of the revenue decline being offset by the 76.3 71.8 70.1 67.4 growth of the Triple M network. 185.2 177.3 164.8 162.2 FY11 FY12 FY13 FY14
Slide 25: Regional Radio Advertising Revenues
REGIONAL RADIO ADVERTISING REVENUES For personal use only • 29 Regional radio stations across 6 states, 20 co- located with Television 14% National growth in FY12 resulting from revenue synergies from the Austereo merger. • Strong competitive position in many markets • Represents 26% of all SCA adve
Slide 26: Regional TV Advertising Revenues
REGIONAL TV ADVERTISING REVENUES National/Local Split For personal use only • Special event sales lead to Local over performance – power ratio of 1.1. Power ratio’s in multimedia markets out perform TV only 245.7 225.4 markets 193.8 189.6 • Multimedia business model continues to deliver, with TV 100
Slide 27: Queensland / Northern New South Wales
QUEENSLAND / NORTHERN NEW SOUTH WALES For personal use only REGIONAL TV REGIONAL RADIO National: $48.2M National: $26.5M (6.2%) 1.8% Local: $30.3M Local: $65.0M (4.1%) 0.7% Brand: Brand: Content: Content: 27
Slide 28: Victoria / South New South Wales / ACT
VICTORIA / SOUTH NEW SOUTH WALES / ACT For personal use only REGIONAL TV REGIONAL RADIO National: $30.3M National: $10.6M 0.2% (2.1%) Local: $24.6M Local: $25.2M (2.6%) 1.6% Brand: Brand: Content: Content: 28
Slide 29: Tasmania / Darwin / Central Australia
TASMANIA / DARWIN / CENTRAL AUSTRALIA For personal use only REGIONAL TV REGIONAL RADIO National: $20.9M National: $1.2M 1.8% (4.6%) Local: $23.3M Local: $3.9M 0.3% 12.2% Brand: Brand: Content: Content: 29
Slide 30: Western Australia
WESTERN AUSTRALIA For personal use only REGIONAL RADIO National: $4.0M (5.5%) Local: $11.2M (2.4%) Content: 30
Slide 31: Spencer Gulf & Broken Hill
SPENCER GULF & BROKEN HILL For personal use only REGIONAL TV National: $6.9M 5.2% Local: $5.1M 0.6% Brand: Content: 31
Slide 32: Outlook & Summary
For personal use only OUTLOOK & SUMMARY CLIFF & DOUGIE, RADIOWEST 32
Slide 33: H1 FY15 Outlook
H1 FY15 OUTLOOK Metro Radio – Revenue share to remain under pressure, however we expect to remain #1 For personal use only • Triple M network continuing strengthen and growing share • Today network cycling tough comparatives TV Revenues – Comm. Games a good start, ratings still challenging • Commonw
Slide 34: Summary
SUMMARY • We have the best content creation team in the radio industry and we are confident that we are For personal use only on the right track with the regeneration of the Today network • We have a broad range of capital management options available and have implemented a strategy to ensure that w
Slide 35: Content Update
For personal use only SOUTHERN CROSS AUSTEREO CONTENT UPDATE 35
Slide 36: SCA Content: Strategic Objective
SCA CONTENT : STRATEGIC OBJECTIVE For personal use only • Strengthen Market Leadership in Radio • Capitalize further on National Dominance • Best People – Talent On-Air and Off-Air • Leverage Digital Engagement and Scale 36
Slide 37: Australia's Number One Radio Brand for Men
For personal use only AUSTRALIA’S NUMBER ONE RADIO BRAND FOR MEN Source: GFK Survey 4. Metro & Regional (inc. Mix 94.5) 37
Slide 38: Rock Sport Comedy
For personal use only 38 ROCK SPORT COMEDY
Slide 39: Sustained Growth
SUSTAINED GROWTH For personal use only • Rise and Rise of Triple M with 2.7m Audience Nationally • Growth Driven by investment in NRL, AFL and talent • Successful Brand extensions o Triple M Perth Digital o Triple M Classic Rock Digital Source: GFK Ratings Survey 4 2014, Nielsen Market Intelligence,
Slide 40: Australia's Number One Radio Brand
For personal use only Australia’s Number One Radio Brand Source: GFK Survey 4, 2014. Gold Coast Survey 2. Newcastle Survey 2. Canberra Survey 1. 40
Slide 41: Pop Celebs Showbiz
For personal use only 41 POP CELEBS SHOWBIZ
Slide 42: Building for Next Generation
BUILDING FOR NEXT GENERATION For personal use only • Number One Radio Brand Nationally – 3.3m Cume • Number One Radio Brand on Mobile • 2DayFM - Sydney’s Number One Radio Brand Online • Number One Radio Brand for Social Media Engagement Source: GFK Ratings Survey 4 2014, Nielsen Market Intelligence,
Slide 43: SCA Melbourne
For personal use only SCA MELBOURNE 43
Slide 44: SCA Melbourne
SCA MELBOURNE For personal use only • Fox FM Leading in Under 40 Females for first time in 6 Years • Fox FM 1m Cume - Largest FM Radio Station Australia • Fifi & Dave – 537,000 - Largest FM Audience Cume in Australia • Triple M Melbourne Number One FM Radio Station • Melbourne’s Number One Breakfast
Slide 45: SCA Sydney
For personal use only SCA SYDNEY 45
Slide 46: SCA Sydney
SCA SYDNEY For personal use only • Triple M Sydney 585,000 – Highest audience for seven years • Sydney Grill Team growth – third FM Breakfast Show and now ahead of Nova 96.9 • 2DayFM Rebuilding - Now fourth highest cume in Sydney FM Radio Market, due to growth of positive perception of new talent So
Slide 47: SCA Perth
For personal use only SCA PERTH 47
Slide 48: SCA Perth
SCA PERTH For personal use only • Mix 94.5 Consistently Number One Radio Station • Mix 94.5 Number One Breakfast Show from launch • 92.9 Perth Number One Station Under 40s • 92.9 Perth Breakfast Show – 25-39 Female Dominance Source: GFK Radio Survey 4, 2014. 48
Slide 49: SCA Adelaide / SCA Brisbane
SCA ADELAIDE SCA BRISBANE For personal use only 49
Slide 50: SCA Adelaide / SCA Brisbane
SCA ADELAIDE SCA BRISBANE For personal use only • SCA Adelaide is now Number One • B105 Number One under 40 in market share in under 40 Men Females for the first time due to successful re-launch of since 2012 Classic Triple M • Less than 92,000 Cume now • Triple M Brisbane separates 1st and 3rd Radi
Slide 51: SCA Gold Coast / SCA Newcastle
SCA GOLD COAST SCA NEWCASTLE For personal use only 51
Slide 52: SCA Gold Coast / SCA Newcastle
SCA GOLD COAST SCA NEWCASTLE For personal use only • Gold FM is the Number One station. • KOFM is the Number One station. • Gold FM is the Number One station • KOFM is the Number One station in in Breakfast Breakfast. • Sea FM is Number One with Under 40 Females. • NXFM is the Number one Commercial
Slide 53: 1.5m Cume Nationally
For personal use only 1.5m CUME NATIONALLY Source: GFK Radio Survey 4, 2014. 53
Slide 54: For personal use only
For personal use only Source: GFK Radio Survey 4, 2014. 54
Slide 55: 900,000 Cume Nationally
For personal use only 900,000 CUME NATIONALLY Source: GFK Radio Survey 4, 2014. 55
Slide 56: Leading NRL Call Team and Talent
For personal use only • LEADING NRL CALL TEAM AND TALENT • NO #1 NRL FOOTBALL CALL FOR MEN UNDER 40 • 17 BROADCAST HOURS WEEKLY Source: GFK Radio Survey 4, 2014. 56
Slide 57: Leading AFL Call Team and Talent
For personal use only • LEADING AFL CALL TEAM AND TALENT • NO #1 AFL FOOTBALL CALL FOR ALL PEOPLE UNDER 55 • 20 BROADCAST HOURS WEEKLY • NO #1 AFL FOOTBALL CALL FOR MEN UNDER 40 Source: GFK Radio Survey 4, 2014. 57
Slide 58: New Talent
For personal use only NEW TALENT 58
Slide 59: Big Name Talent
For personal use only BIG NAME TALENT 59
Slide 60: SCA Digital Strategy
SCA DIGITAL STRATEGY Engage with Intimate Scale For personal use only • Market Share greater than entire Commercial Radio combined1 • Driven by Engaging Unique Content, Social Media Scale with Mobile first strategy • Create shareable content for every device • Capture SCA user profile data to person
Slide 61: SCA Digital Headline Achievements
For personal use only SCA DIGITAL HEADLINE ACHIEVEMENTS +112% #7 #15 YOY Growth in Australian Australian daily publisher Australian daily publisher Average Daily Unique via mobile browser (from on all devices (from #22 Browsers #12 in FY13) in FY13) Ahead of Ahead of Seek & Carsales Network Ten & AP
Slide 62: Digital Revenue Growth & Social Engagement
For personal use only DIGITAL REVENUE GROWTH & SOCIAL ENGAGEMENT +17.3% 58% 31% 187,633 Yr. on Yr. growth in Growth in Growth in Smartphone Digital Revenue – Facebook Twitter Monthly Active Beating AU Digital Community over Community over Users Market growth last 12 months last 12 months Source: Cum
Slide 63: SCA Digital Audio and Video
For personal use only AND LASTLY, SCA DIGITAL AUDIO AND VIDEO 835,363 1.3m 70.7m Monthly unique online Average monthly Annual video views streaming listeners downloads & streams of on demand audio Source iTunes Connect & Google Play – (Unique Downloads) SCA Server logs, June 2015 Ooyala and You Tube
Slide 64: Appendix
For personal use only APPENDIX 64 Appendix
Slide 65: Restatement of FY13 Results
RESTATEMENT OF FY13 RESULTS Underlying FY13 Sunshine Coast Cost Impact of One $ MILLIONS FY13 Adjusted For personal use only (as presented in August 2013) Result Reallocation Off Costs Metro Revenue 267.8 (12.2) (5.3) 250.3 Expenses (178.5) 6.6 (0.7) (172.6) EBITDA 89.3 (5.6) (6.0) 77.7 Regional Rev
Slide 66: FY14 Results Using FY13 Methodology
FY14 RESULTS USING FY13 METHODOLOGY For personal use only $ MILLIONS Metro Regional Total Total Revenue 260.7 380.1 640.8 Broadcast & Production (22.5) (89.8) (112.3) Employee (79.4) (89.7) (169.1) Selling, General & Admin (91.5) (80.1) (171.6) Total Expenses (193.4) (259.6) (453.0) EBITDA 67.3 120.
Southern Cross Media Group — FY2014 Earnings Presentation on 6ix