Slide 1: Half Year 2018 Results Presentation
Half Year 2018 Results Presentation For the six months ended 30 June 2018 23 August 2018
Slide 2: Disclaimer
DISCLAIMER The information in this presentation is of a general nature and does not constitute financial product advice, investment advice or any recommendation. Nothing in this presentation constitutes legal, financial, tax or other advice. This presentation constitutes summary information only, an
Slide 3: Agenda
GEND 05 H1 18 Results Summary 07 Operational Priorities 08 Channel Results 15 Digital Classifieds 19 Monetising Our Content 21 H1 18 Financials 26 Outlook 28 Q&A 29 Supplementary Information Page 3
Slide 4: Reaches 80% of New Zealanders
NZME REACHES 80%1 OF NEW ZEALANDERS PRINT 1.3 Million weekly readers1 CH INE SE NZ HE RA CAPABILITIES LD .CO .NZ MARKETPLACES EXPERIENTIAL RADIO 2.0 Million TENT + CHA DATA & CON NN INSIGHTS RE EL DIGITAL CO S CLASSIFIEDS CREATIVE NEWS CONTENT PRINT RADIO NATIVE CONTENT weekly listeners2 CREATION EN
Slide 5: H1 Results Summary
NZME H1 18 RESULTS SUMMARY Statutory NPAT Trading Revenue1 $3.7m H1 17 $7.8m 53% $185.7m H1 17 $191.0m3 3% Interim Dividend Trading EBITDA1 Fully Imputed $23.2m 2.0cps 2 H1 17 $28.2m 18% Scheduled for payment on 26 October 2018 1 Trading measures are non-GAAP measures that are explained and reconcil
Slide 6: Investing for the Future
NZME INVESTING FOR THE FUTURE •• Trading revenue declined just 3% H1 18 H1 17 $m % Change in H1 18 compared to H1 17 reflecting Trading1 Trading1 continuation of industry headwinds, Trading Revenue 185.7 191.0 (3%) to a degree moderated by ongoing market Total Costs excluding Digital Classifieds Cos
Slide 7: H1 Operational Priorities
NZME H1 18 OPERATIONAL PRIORITIES Continued audience •• Total audience 3.3m growth and engagement •• 10% YoY growth in NZ Herald weekly brand audience1 and 8.5% increase in engagement on nzherald.co.nz2 •• Radio audience stable •• Strong audience growth in the new Digital Classifieds Return advertis
Slide 8: Channel Results
CHANNEL RESULTS Page 8
Slide 9: Maintaining or Growing Across All Channels
NZME H1 18 MARKET COMPARABLES MAINTAINING OR GROWING ACROSS ALL CHANNELS Digital & e-Commerce 16% H1 17 14% Display & Mobile Revenue Print NZME +20% NZME Ad Revenue -8% YoY to Q1 18 YoY in H1 18 Market +13%1 YoY to Q1 18 28% 56% Stuff Ad Revenue -20%3 YoY H1 18 comparative H1 17 28% H1 17 58% NZME >
Slide 10: Print
NZME PRINT •• Print advertising revenue continues to decline NZME Print Revenue ($m) H1 18 H1 17 % Change at historical rates. Advertising Revenue 55.5 60.2 (8%) •• Growth continues in readership and audience. Circulation Revenue 40.4 41.9 (4%) •• Circulation volume decline has been largely Other Re
Slide 11: NZ Herald Audience Growing, Subscriber Revenues Stable
NZ HERALD AUDIENCE GROWING, SUBSCRIBER REVENUES STABLE The NZ Herald Mon-Sat Average Issue Readership1 NZME Subscriber Volume and Yield2 NZ Herald Daily Brand Audience3 490 16.0 1.90 1100 1.80 1050 470 14.0 1000 1.70 12.0 Daily Brand Audience (000s) 450 Subscriber Volume (millions) 950 Readership (0
Slide 12: Radio & Experiential
NZME RADIO & EXPERIENTIAL •• Radio and experiential revenue declined just H1 18 H1 17 NZME Radio & Experiential Revenue ($m) % Change 3% after being down 5% in FY17 and Trading1 Trading1 6% in the first half of last year. Radio & Experiential Revenue 48.8 50.4 (3%) •• Focus for H2 on continuing the
Slide 13: Introducing Bree & Clint
G INTRODUCIN BREE CLINT 4PM-7PM 91.0 Page 13
Slide 14: Digital & E-Commerce
NZME DIGITAL & E-COMMERCE •• Digital advertising revenue grew across NZME Digital & e-Commerce Revenue ($m) H1 18 H1 17 % Change all products, outperforming the market. •• Washington Post ARC platform has enabled Digital Revenue4 23.9 20.5 17% improved audience analytics and monetisation. e-Commerce
Slide 15: Digital Classifieds
DIGITAL CLASSIFIEDS WE’RE HERE TO LAUNCH CAREERS SO WE GOT A MICROBIOLOGIST TO LAUNCH US GET MORE THAN A JOB AT .co.nz NME0030 GrowIt Digi Screen 540x540px_V4.indd 1 27/03/18 10:14 AM •• Needs based search •• Unique tools for buyers •• Targets active and passive and sellers candidates •• Integrated
Slide 16: OneRoof
LISTINGS +AUDIENCE REVENUE LISTINGS AUDIENCE •• Launched March 20181 •• Strong audience growth since launch, supported by extensive brand advertising •• Currently ~50% of the total market 'for sale' listings on site •• Currently reaching ~65% of realestate.co.nz audience •• 3 out of 5 major agency g
Slide 17: Page
towards your home deposit Enter at oneroof.co.nz/win
Slide 18: DRIVEN and YUDU
DRIVEN Weekly Unique Browsers1 LISTINGS 140,000 120,000 •• Relaunched site in March 2018 100,000 •• H2 focus on launching unique tools 80,000 for buyers and sellers 60,000 •• Currently have ~60% of all dealer listings in New Zealand 40,000 20,000 AUDIENCE •• DRIVEN audience has increased - from 6% t
Slide 19: Monetising Our Content
MONETISING OUR CONTENT NZME PAID PROPOSITION Global Learnings •• Audience willingness to pay for digital content 2017 Washington Post ARC Partnership has increased significantly. •• New Content Management System •• Majority of global news publishers charge •• A/B testing of content for digital conte
Slide 20: Journalists of the Year
1 2 3 Steve Braunias Opinion writer of the year Discover now at nzherald.co.nz Audrey Young Political journalist of the year Page Discover now at nzherald.co.nz 20
Slide 21: H1 18 Financials
H1 18 FINANCIALS Page 21
Slide 22: Trading Result
NZME TRADING RESULT •• The statutory results reflect the impact of H1 18 H1 17 $m % Change NZ IFRS 15 Revenue from Contracts with Trading1 Trading1 Customers on Revenue. For presentation Revenue 183.5 189.1 (3%) purposes the H1 18 Trading result is provided Other Income 2.2 1.9 13% on a basis consis
Slide 23: Costs
NZME COSTS •• Underlying costs3 down 2% reflecting the H1 18 H1 17 $m % Change ongoing impact of cost efficiency programs. Trading1 Trading1 People costs & contributors 79.3 82.1 (3%) •• Print and distribution costs are lower due to reduced print volumes and efficiency Print & distribution costs 31.
Slide 24: Balance Sheet
NZME BALANCE SHEET •• The balance sheet remains strong with $m Jun 18 Dec 17 Jun 17 net debt of $106m stable year on year. Trade, other receivables and inventory 54.2 57.2 58.4 •• Lower payables reflects reduced print costs, Trade and other payables (50.0) (56.9) (59.8) timing of incentives, and the
Slide 25: Cash Flow
NZME CASH FLOW •• Solid operating cash flow in H1 18 has H1 18 H1 17 $m been applied to tax payments, dividends and Trading1 Trading1 capex. Trading EBITDA 23.2 28.2 •• Key items broadly stable on same period Share based payment scheme (non-cash) 0.2 0.2 last year, but increased tax due to payment M
Slide 26: Outlook
•• H1 18 advertising revenue declined 4% on the same period last UTLOO year. Advertising bookings for Q3 are consistent with the H1 result, down 4% year on year. Agency advertising spend remains challenged and softening economic conditions have the potential to weaken or delay advertising revenue in
Slide 27: H2 Focus on Operational Priorities
H2 18 FOCUS ON OPERATIONAL PRIORITIES Grow audience and •• Expand range of Premium content on nzherald.co.nz engagement •• Implement registration on the site to improve personalisation and engagement •• Embed new radio shows and continue momentum in audience growth Return advertising •• Maintain imp
Slide 28: Q+A
Q+A A U C K L A N D 8 9. 4 F M Page 28
Slide 29: Supplementary Information
SUPPLEMENTARY INFORMATION Page 29
Slide 30: H1 18 Reconciliation of Trading Result to Consolidated Interim Financial Statements
NZME H1 18 RECONCILIATION OF TRADING RESULT TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS H1 18 H1 18 NZ IFRS Exceptional $m Financial Trading 151 Items7 1 For a detailed explanation of the NZ IFRS 15 Statements adjustment please refer to Note 2.1.1 of the Consolidated Interim Financial Statements Se
Slide 31: H1 17 Reconciliation of Trading Result to Consolidated Interim Financial Statements
NZME H1 17 RECONCILIATION OF TRADING RESULT TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS H1 17 H1 17 Excepional $m Trading Statutory Items Result Result 1 Segment revenue agrees Segment Revenue1 with the segment revenue as disclosed in notes 2.1 and 2.3 of - Print 110.6 - 110.6 the Consolidated Inte
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