Southern Cross Media Group Limited · ASX:SXL
Southern Cross Media — Macquarie Australia Conference 2019
33 slides from Southern Cross Media's conference presentation, Apr 30, 2019
Slide 1: ASX Release: Investor Presentation to Macquarie Australia Conference 2019
ASX RELEASE 30 APRIL 2019 SOUTHERN CROSS AUSTEREO INVESTOR PRESENTATION TO MACQUARIE AUSTRALIA CONFERENCE 2019 For personal use only Please see attached a copy of the presentation being delivered by Grant Blackley to the 2019 Macquarie Australian Conference on Tuesday 30 April 2019. For further info
Slide 2: Southern Cross Austereo - Macquarie Investor Conference
For personal use only SOUTHERN CROSS AUSTEREO Macquarie Investor Conference Grant Blackley, CEO 30 April 2019 1
Slide 3: Disclaimer
DISCLAIMER For personal use only Summary information The material in this presentation has been prepared by Southern Cross Media Group Limited ABN 91 116 024 536 (“Southern Cross Austereo”) and contains summary information about Southern Cross Austereo’s activities current as at 30 April 2019. The i
Slide 4: Agenda
AGENDA For personal use only • SCA Strategy • Industry Trends • New Initiatives • Financials • Market Outlook 3
Slide 5: SCA Strategy - Four Key Pillars
SCA STRATEGY – FOUR KEY PILLARS For personal use only CONTENT DISTRIBUTION MONETISATION NEW GROWTH Transform our Create compelling Deliver improved Use our assets to help business to build content audio experiences our clients succeed sustainable revenue streams 4
Slide 6: SCA Strategy - Core Competencies & Attributes
SCA STRATEGY - CORE COMPETENCIES & ATTRIBUTES For personal use only Competency Competency Attributes Reach Localism 95% of Australians 65 locations People each week 2500 permanent Sales Expertise people Insights Brands Platform to promote and Key point of difference – SCA Critical business driver –
Slide 7: SCA Strategy - Core Asset Base
SCA STRATEGY - CORE ASSET BASE For personal use only AUDIO TELEVISION Up to 10 FM and DAB+ stations per metro market TV affiliation in 68 regional radio stations & regional Australia national podcast network (excl. WA) Only Sydney & Melbourne have the full suite of DAB stations 6
Slide 8: Industry Trends - Share of Audio
INDUSTRY TRENDS - SHARE OF AUDIO % PEOPLE WHO LISTEN DAILY For personal use only With over 66% of all Daily audio Audio Books ( Paid and free services) Music Streaming Podcasts TV Music Channel Online Music Videos Radio Owned Music LISTENING radio has 3 times more listeners than the streaming servic
Slide 9: Industry Trends - Share of the Commercial Audio Sector
INDUSTRY TRENDS - SHARE OF THE COMMERCIAL AUDIO SECTOR For personal use only Online Music TV Music Videos Channels 2.1% 5.4% Radio has over 78% of all ‘Commercial’ Podcasts Audio Listening well ahead of the 7.8% of Ad 6.4% Ad Supported Streaming. Supported Music Streaming 7.8% Podcasting has 6.4% Sh
Slide 10: Commercial Radio Is a Growth Platform
COMMERCIAL RADIO IS A GROWTH PLATFORM For personal use only Radio audience growth is supported by population increases, portability of radio (home, car, work, mobile) and underpinned by targeted investment in local content Metro Market Revenue $780m $781m $790m $750m $715m $683m $694m $675m $674m $6
Slide 11: DAB+ Driving the Future Growth in Radio
DAB+ DRIVING THE FUTURE GROWTH IN RADIO For personal use only Cume (000): Metro DAB Historical Trends - All Ppl 10+ 3.93m 4500 4,208 2021 3.16m 4000 3,616 2020 3,478 3500 2.47m 3,185 2019 3000 2,804 1.87m 1.33m 2018 2500 2017 2000 1,594 1500 1,262 1000 878 519 500 192 0 2009 2010 2011 2012 2013 2014
Slide 12: SCA's DAB+ Brand Strategy
SCA’S DAB+ BRAND STRATEGY For personal use only SAFE – TRUSTED – FAMILY OF BRANDS Source: GfK Metro Survey #1 2019, Mon-Sun ROS, Cume Reach FM and DAB+. 11
Slide 13: SCA's DAB+ Increased Listening - Incremental Reach
SCA’S DAB+ INCREASED LISTENING - INCREMENTAL REACH For personal use only Aggregated FM and DAB+ Radio increases unduplicated audience reach SCA LISTENERSHIP – S1 2019 4,494,000 374,000 416,000 Listen to Listen to both SCA’s Listen to SCA’s DAB+ SCA’s FM Network FM and DAB+ Network only only Networks
Slide 14: SCA's Digital Stack Monetisation
SCA’s DIGITAL STACK MONETISATION For personal use only BRANDS LISTENING MONETISATION Buyer only focuses on the combined ratings – NOT separate ratings One aggregated audience 1 spot = 5 impacts +9% simultaneously audience Same CPM Greater Reach Brand Safe 13
Slide 15: SCA's Digital Streaming Eco-System
SCA’s DIGITAL STREAMING ECO-SYSTEM For personal use only 94 Branded Websites SCA Apps 3rd Party Desktop, Mobile & Mobile & In Car Apps & Websites Tablet OFFICIAL UNOFFICIAL
Slide 16: SCA Is Connected - New Smarter Audio
SCA IS CONNECTED – NEW SMARTER AUDIO For personal use only LIVE RADIO ON DEMAND SMART NEWS 106 streams 140 catch up shows & 896 mins per week 200 Organic Podcasts Smart speaker adoption more than doubled in 2018 in the US, and is following a similar growth trajectory in Australia 1 1 Source: Edison
Slide 17: Podcasting Is Accelerating Globally
PODCASTING IS ACCELERATING GLOBALLY For personal use only Infinite Dial USA % Listened to Podcasting Last Month* 32 26 24 21 17 15 14 12 12 12 11 9 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 *Infinite Dial Report 2019 16
Slide 18: New Initiatives in the Podcast Market for SCA
NEW INITIATIVES IN THE PODCAST MARKET FOR SCA For personal use only Opportunity Suitability • Podcasters are trusted - “The Trust Economy” • Podcasts educate, relax, inform, excite and make you Premium Original laugh Branded Podcasts • PodcastOne (wholly owned by SCA) is Australia’s Leading Prem
Slide 19: New Initiatives - Instream Digital Advertising
NEW INITIATIVES - INSTREAM DIGITAL ADVERTISING For personal use only Instream will dynamically deliver addressable audio advertising into live radio when a listener is streaming from an internet connected device Instream advertising competes directly with the likes of Spotify, who over the last 3 ye
Slide 20: New Strategic Deal - SoundCloud
NEW STRATEGIC DEAL - SOUNDCLOUD For personal use only SoundCloud is an online global audio distribution platform and music sharing website – enabling users to upload, promote, and share audio Soundcloud has 40m registered global users and 175m unique monthly listeners (2.5m Australian uniques). In t
Slide 21: Southern Cross Austereo
"UMO]LUOOg SOUTHERN CROSS AUSTEREO abrolvtely engaging
Slide 22: Background: SCA Regional Radio Growth & Development
BACKGROUND: SCA REGIONAL RADIO GROWTH & DEVELOPMENT For personal use only • National investment with SCA in SCA National Regional Radio Advertising regional radio markets has grown 12% 80 Revenues – 13% CAGR and 14% respectively - over the last 2 70 years 60 65.9 • SCA has led the education and 50 5
Slide 23: Redefining Regional Australia and Addressing Underinvestment
REDEFINING REGIONAL AUSTRALIA – AND ADDRESSING THE UNDERINVESTMENT For personal use only 36% 34% 10% INVESTMENT BY 90% NATIONAL BRANDS IN REGIONAL AUSTRALIA 64% 66% IS UNDERWEIGHT VS. POPULATION AND INCOME POPULATION INCOME AD SPEND REGIONAL METRO Source: ABS, Jun-15 Estimated Resident Population by
Slide 24: Boomtown - The Opportunity
BOOMTOWN – THE OPPORTUNITY For personal use only Regional Australia has a combined population of 8.8 million 5,000,000 4,000,000 3,000,000 2,000,000 1,000,000 0 Sydney Melbourne Rest of Rest of Brisbane Perth NT/TAS/ Rest of Adelaide NSW/ACT QLD SA VIC Source- ABS statistics 23
Slide 25: Boomtown - The Opportunity
BOOMTOWN – THE OPPORTUNITY For personal use only Regional vs Metro Ad spend disparity INSURANCE CATEGORY SPENDS 5X IN METRO Dentsu Aegis CEO Henry Tajer REGIONAL METRO “ The Boomtown initiative would jolt the marketing industry into realising its "blind spot". Those $39.8M $359.9M Boomtown statistic
Slide 26: Comes Alive
For personal use only COMES ALIVE 25
Slide 27: For personal use only
For personal use only 26
Slide 28: New Industry Campaign - Redefining Regional Media
NEW INDUSTRY CAMPAIGN – REDEFINING REGIONAL MEDIA For personal use only 27
Slide 29: Financials - Capital Management Drives Improved Balance Sheet
FINANCIALS - CAPITAL MANAGEMENT DRIVES IMPROVED BALANCE SHEET For personal use only 700 • $284m or 48% reduction in 588 600 net debt over last 5 years Debt reduced by 48% 506 500 • Debt reduction program has positioned SCA with much 400 improved balance sheet – 340 321 304 creating flexibility to pu
Slide 30: Financials - Strong Consistent Cash Generation
FINANCIALS - STRONG CONSISTENT CASH GENERATION For personal use only Cash Conversion - (Operating Cash less Capex) / EBIT Cash flow available for distribution pre- 120.0% non-recurring items 80 100.0% 96.0% 97.0% 70 84.4% 80.0% 60 50 60.0% $'M 40 40.0% 30 20 20.0% 10 0.0% - FY16 FY17 FY18 FY15 FY16
Slide 31: Financials - Sustainable Dividend Policy
FINANCIALS - SUSTAINABLE DIVIDEND POLICY For personal use only Dividend Paid (cps) • Dividend payout policy 65% - 85% of NPAT • Strong cash generation 4.00 4.00 supports payout ratio to 3.50 shareholders 3.00 3.75 3.75 3.75 3.00 3.25 FY15 FY16 FY17 FY18 FY19 Interim Final 30
Slide 32: Trading Update
TRADING UPDATE For personal use only • Advertising markets generally weak in Q3 – yet SCA gaining share • Q4 trading ahead of last year, led by growth in national advertising Outlook • Improving survey performances for FM and DAB+ stations • Podcasting revenues well up on prior year • Strong cost di
Slide 33: Southern Cross Austereo - Absolutely Engaging
For personal use only JS | SOUTHERN CROSS AUSTEREO absolutely engaging
Southern Cross Media Group — Macquarie Australia Conference 2019 on 6ix