Nzme Limited · NZX:NZM
Nzme — H1 2021 Earnings Presentation
36 slides from Nzme's earnings presentation, Aug 24, 2021
Slide 1: 2021 Half Year Results
2021 HALF YEAR RESULTS Six months to 30 June 2021 24 August 2021 EVERYONE’S HERE.
Slide 2: Agenda
AGENDA Results Summary 3 Market Dynamics 4 Divisional Performance and Strategy 8 2021 Half Year Financial Results 22 Capital Management 27 Outlook 29 Q&A 30 Supplementary Information 31 2
Slide 3: Results Summary
RESULTS SUMMARY $172.5m $30.1m Operating Revenue1 Operating EBITDA1 For the half year ending 30 June 2021 H1 2020 $157.8m 9% H1 2020 $28.9m 4% • Earnings growth reflects continued progress on strategic priorities $5.6m $7.8m and revenue recovery post Covid-19: • Continued growth in Radio revenue mar
Slide 4: Market Dynamics
MARKET e DYNAMICS — a
Slide 5: Improved Business Confidence and Agency Market Returned to Growth
IMPROVED AGENCY MARKET BUSINESS RETURNED TO CONFIDENCE GROWTH Monthly Business Confidence – Net Index Monthly agency revenue growth % vs 20192 20 14 13 9 7 10 2 12 10 0 10 (2) (1) (10) (4) 8 7 (7) (20) (16) (19) 6 4 (30) (29) 4 (40) (34) (32) 2 2 (50) (42) (42) 0 (60) (2) (70) (64) (67) (2) (80) (4)
Slide 6: Revenue Is Recovering Post Covid
REVENUE IS RECOVERING NZME Total Advertising Revenue H1 2019-2021 POST COVID 25.0 Q1 2021 vs 2019 (-5.5%) Q2 2021 vs 2019 (-1.0%) Advertising Revenue (millions) 20.0 15.0 • NZME is focused on advertising revenue performance 10.0 compared to 2019. • Advertising revenue for H1 2021 was 3.2% lower than
Slide 7: NZME Continues to Outperform the Market
NZME CONTINUES TO OUTPERFORM THE MARKET H1 2021 Total Segment Revenue $170.6m Digital Other $4.8m Subscriptions 3% Print circulation (YoY growth) $5.1m 3% Radio advertising (YoY growth) NZME print circulation revenue (4.0%) NZME radio advertising revenue 18.5% NZME movement – print readership1 23.4%
Slide 8: Divisional Performance
DIVISIONAL PERFORMANCE | ~
Slide 9: Leading Audience and Customer Centric Brands
LEADING AUDIENCE AND CUSTOMER CENTRIC BRANDS 32 print publications 9 audio brands #1 25-54 year-old #1 Daily newspaper in NZ1 breakfast show in NZ2 Now over 119,000 digital NZ’s #1 radio station and subscribers favourite breakfast talk show2 16 websites 89% of residential for-sale NZ’s #1 digital ne
Slide 10: Audio
AUDIO $ million H1 2021 H1 2020 % change H1 2019 Radio advertising 49.6 42.3 17% 52.4 Digital audio advertising 1.6 0.9 70% 0.7 For the 6 months ending 30 June 2021 Other 0.6 4.6 (87%) 0.9 Audio revenue 51.8 47.9 8% 54.0 • Advertising revenue growth for H1 2021 more than offset the lower ‘other’ rev
Slide 11: Audio Listeners Market Share
AUDIO LISTENERS MARKET SHARE NZME Radio weekly listeners NZME Talk Radio – NZME Music Radio – iHeartRadio Monthly Total –Total including partners1 Major Markets All 10+ Share2 Major Markets 25-54 Share3 Listening Hours (million)4 Closure Content of Radio 30 changes 2,100 15 made 6 Sport 14 2,000 5 L
Slide 12: New Zealand's Leading Audio Company
NEW ZEALAND’S LEADING AUDIO COMPANY FY 2020 Metric H1 2021 2023 Target Progress Update Achievement • Breakfast show audiences have grown for the 25-54 demographic across 8 of the 9 radio brands1* > 1% share • Key on-air host contracts extended across major brands NZME share of total 35.6%1 34.4%1 po
Slide 13: Publishing
PUBLISHING $ million H1 2021 H1 2020 % change H1 2019 Print subscriptions 27.2 27.5 (1%) 27.8 Digital subscriptions 5.1 2.4 111% 0.2 For the 6 months ending 30 June 2021 Retail outlet sales 7.8 8.9 (13%) 10.7 Total reader revenue 40.2 38.9 3% 38.7 • Growth in total reader revenue of 3% with signific
Slide 14: Brand Audience Increasing
BRAND AUDIENCE INCREASING NZ Herald (Mon-Sat) and Herald on NZ Herald Daily and Weekly NZME Total Monthly Digital Users2 Sunday Average Issue Readership1 Brand Audience1 NZ Herald Herald On Sunday Daily Brand Audience Weekly Brand Audience NZME Total nzherald.co.nz 700 3,000 High readership engageme
Slide 15: Total Subscribers Growing
TOTAL SUBSCRIBERS GROWING Print Subscriber Volume and Yield1 Subscriptions Mix Digital Subscription Volume and Yield Print Only Print Entilted Digital Only Subscriber Volume Yield Digital Subs Volume Annual Yield Per Sub 200,000 14.0 1.8 70,000 $250 180,000 1.7 60,000 12.0 160,000 $200 Subscriber Vo
Slide 16: New Zealand's Herald
NEW ZEALAND’S HERALD FY 2020 Metric H1 2021 2023 Target Progress Update Achievement Subscription More than 210,000 • Increased retail and subscription prices of newspapers 169,000 Volume Target 177,545 subscribers by • Maintained position as NZ's #1 news site for 11 months3 subscribers 2023 year-end
Slide 17: OneRoof
ONEROOF $ million H1 2021 H1 2020 % change H1 2019 Print 7.0 5.8 19% 9.3 Digital 3.5 1.4 145% 1.3 For the 6 months ending 30 June 2021 Other - 0.8 (95%) 0.1 • OneRoof print revenue significantly impacted for Jan-Apr 2021 given OneRoof revenue 10.5 8.1 30% 10.7 'booming' property market and reduced p
Slide 18: OneRoof Audience & Listings
ONEROOF AUDIENCE & LISTINGS OneRoof Auckland and national residential OneRoof Monthly Unique Online Audience2 OneRoof Digital Residential for-sale for-sale listings as a % of Trade Me1 Listings Upgrade % Auckland % National % 700 14.0% 120% 600 12.0% 100% 500 10.0% Audience (000’s) 80% Upgrade % 400
Slide 19: Your Complete Property Destination
YOUR COMPLETE PROPERTY DESTINATION FY 2020 Metric H1 2021 2023 Target Progress Update Achievement • New leadership structure in place with changed regional reporting across key markets of Northland, Bay of Plenty and Hawkes Bay Residential Listings 89%1 89%1 100% of listings • National listings pene
Slide 20: GrabOne
GRABONE $ million H1 2021 H1 2020 % change H1 2019 For the half year Revenue ended 30 June 2020 4.4 4.1 9% 4.6 People & Contributors (1.7) (1.9) (9%) (2.5) For the 6 months ending 30 June 2021 Agency Commission & Marketing (0.4) (0.4) 8% (0.4) Content (0.2) (0.2) 0% (0.1) • GrabOne is classified as
Slide 21: Corporate & Other
CORPORATE $ million H1 2021 H1 2020 % change H1 2019 For the half year Revenue ended 30 June 2020 1.6 0.4 265% 1.1 People & Contributors (1.9) (1.6) 19% (2.0) & OTHER Agency Commission & Marketing (0.1) (0.2) (50%) (0.3) For the 6 months ending 30 June 2021 Content (0.2) (0.2) 0% (0.3) Other (2.2) (
Slide 22: 2021 Half Year Financial Results
2021 HALF YEAR FINANCIAL RESULTS 22
Slide 23: Operating Results
$ million H1 2021 H1 2020 % change H1 2019 OPERATING Segment revenue Other revenue 170.6 1.8 147.3 10.5 16% (82%) 178.3 2.8 RESULTS Operating Revenue1 172.5 157.8 9% 181.1 For the 6 months ended 30 June 2021 Operating expenses1 (142.4) (128.9) 10% (153.5) • Operating EBITDA1 grew 4% in 2021. • Segme
Slide 24: Expenses
EXPENSES $ million H1 2021 H1 2020 % change H1 2019 People and contributors 71.6 69.2 3% 77.4 Print and distribution 25.9 22.5 15% 29.6 For the 6 months ended 30 June 2021 Agency commission and marketing 23.0 16.4 41% 21.1 • People and contributors expense increased Content 8.1 7.2 13% 8.1 3% reflec
Slide 25: Balance Sheet
$ million 30 June 2021 31 December 2020 BALANCE SHEET Trade, other receivables and inventory 45.6 45.4 Trade and other payables (45.9) (43.8) As at 30 June 2021 Current tax payable (1.5) (2.7) Net assets held for sale (WC) (5.0) (6.0) • Increase in trade and other payables is largely due to higher p
Slide 26: Cash Flows
$ million H1 2021 H1 2020 CASH FLOWS Operating EBITDA1 30.1 28.9 NZ IFRS 16 interest paid on leases (2.6) (2.3) For the 6 months ended 30 June 2021 Dividends received 0.1 - • Operating1 cash flows of $21.9m is lower than Interest paid on bank facilities (1.3) (1.5) H1 2020, as 2020 benefited from a
Slide 27: Capital Management
30 June 2021 31 December 2020 CAPITAL MANAGEMENT 12-months Operating EBITDA (pre NZ IFRS 16)1 53.0 53.0 Interest Expense 2.5 2.9 Net interest cover (Operating EBITDA For the 6 months ended 30 June 2021 21.1 18.1 (pre NZ IFRS 16)1 / Interest Expense) Net Debt ($ million) 18.6 33.8 • Continued net deb
Slide 28: Dividend and Capital Return
DIVIDEND AND CAPITAL RETURN Dividend Policy NZME intends to pay dividends of 30-50% of Free Cash Flow subject to being within its target leverage ratio and having regard to NZME's capital requirements, operating performance and financial position. Target Leverage Ratio of 0.5 to 1.0 times rolling 12
Slide 29: Outlook
OUTLOOK • Given that New Zealand has moved into Level 4 lockdown1 over the past week, we are wary of the potential impacts of this outbreak. • We have been pleased to see advertising revenues track closer to 2019 levels. Q3 2021 had been tracking to be in line with 2019 levels prior to the outbreak.
Slide 30: Q&A
Q&A 30
Slide 31: Supplementary Information
SUPPLEMENTARY INFORMATION 31
Slide 32: 2021 Divisional Performance
2021 DIVISIONAL PERFORMANCE For the full year ended$m31 December 2020 Audio Publishing OneRoof GrabOne Other H1 21 Total H1 20 Total % Change Cost pools that relate to multiple divisions have Reader Revenue: been allocated based on - Print - 35.0 - - - 35.0 36.5 (4%) revenue, geography and - Digital
Slide 33: Reconciliation of Operating Results to Financial Statements (June 2021)
RECONCILIATION OF OPERATING RESULTS TO FINANCIAL STATEMENTS 6 MONTHS ENDED 30 JUNE 2021 $ million Operating Results NZ IFRS 16 Operating Results Exceptional and Per Financial excl. NZ IFRS 16 Adjustments incl. NZ IFRS 16 Other Items Statements Segment revenue 170.6 - 170.6 - 170.6 Other revenue 1.8
Slide 34: Reconciliation of Operating Results to Financial Statements (June 2020)
RECONCILIATION OF OPERATING RESULTS TO FINANCIAL STATEMENTS 6 MONTHS ENDED 30 JUNE 2020 $ million Operating Results NZ IFRS 16 Operating Results Exceptional and Per Financial excl. NZ IFRS 16 Adjustments incl. NZ IFRS 16 Other Items Statements Segment revenue 147.3 - 147.3 - 147.3 Other revenue1 10.
Slide 35: Disclaimer
DISCLAIMER The information in this presentation is of a general nature and does not constitute financial product advice, investment advice, legal, financial, tax or any other recommendation or advice. This presentation constitutes summary information only, and you should not rely on it in isolation
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