Southern Cross Media Group Limited · ASX:SXL
Southern Cross Media — H1 FY21 Earnings Presentation
27 slides from Southern Cross Media's earnings presentation, Feb 25, 2021
Slide 1: Southern Cross Austereo H1 FY21 Investor Presentation
For personal use only SOUTHERN CROSS AUSTEREO H1 FY21 INVESTOR PRESENTATION 25 February 2021
Slide 2: 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 (SCA) and contains summary information about SCA’s activities current as at 25 February 2021. The information in this presentation is of a
Slide 3: H1 FY21 Results
For personal use only H1 FY21 RESULTS Grant Blackley
Slide 4: Group Results Summary
GROUP RESULTS SUMMARY For personal use only $ millions H1 FY21 H1 FY20 Var. • EBITDA of $75.3m, up 11.5% on prior year Revenue 259.2 308.1 (15.9%) • NPAT of $32.5m, up 59.3% on prior year Expenses (183.9) (240.6) (23.6%) • Revenue for H1 was 15.9% below corresponding period – but advertising trends
Slide 5: Headline Achievements
HEADLINE ACHIEVEMENTS For personal use only • Implementation of leaner operating model – structural reduction in non-revenue related cost base of $30m on FY19 Operational • Launching the “Ultimate audio destination for Australians – LiSTNR”, coupled with implementation of Digital First Audio Operati
Slide 6: H1 FY21 Financial Results
For personal use only H1 FY21 FINANCIAL RESULTS Nick McKechnie
Slide 7: Group Reported Statutory Results
GROUP REPORTED STATUTORY RESULTS For personal use only $ millions H1 FY21 H1 FY20 Var. • Revenues down 15.9% to $259.2m with recovery Revenue 259.2 308.1 (15.9%) accelerating in Q2 Expenses (183.9) (240.6) (23.6%) • Results benefited from timely and targeted government support – offsetting ~70% of t
Slide 8: Cashflow
CASHFLOW For personal use only $ millions H1 FY21 H1 FY20 • Free cash conversion of 134% achieved with Opening Cash 271.4 32.4 assistance of $15m working capital benefits, Net Cash from Operations 84.8 62.2 respecting some benefits will naturally reverse in Leases (2.7) (4.3) H2 Tax Payment (4.7) (1
Slide 9: Stronger Balance Sheet
STRONGER BALANCE SHEET For personal use only • Net debt reduced to $66m, 50% down on June 20 • Temporary working capital benefit from deferral of payables of $15m (COVID related), which will unwind in H2 • $100m of debt repaid in January 2021, including the $25m one year facility, which was terminat
Slide 10: Bank Covenants
BANK COVENANTS For personal use only Leverage Ratio • Leverage ratio at historic lows: 4.50 4.50 4.50 • 0.59x based on LTM1 EBITDA • 0.39x based on annualised Q2 EBITDA, which 3.50 3.50 3.50 is the December 2020 testing measure • Significant headroom to leverage covenant: 2.29 1.76 • June 2021 lever
Slide 11: Digital Transformation – Launch of LiSTNR
For personal use only DIGITAL TRANSFORMATION – LAUNCH OF LiSTNR
Slide 12: LiSTNR Will Expand SCA's Digital Audio Ecosystem
LiSTNR WILL EXPAND SCA’s DIGITAL AUDIO ECOSYSTEM For personal use only SCA’s digital transformation is accelerating through the launch of LiSTNR, capitalising on the rapidly growing digital audio environment The number of Australians accessing digital audio has doubled 1 Changing audience behaviour
Slide 13: LiSTNR Will Expand Existing SCA Content With New Digital Content
LiSTNR WILL EXPAND EXISTING SCA CONTENT WITH NEW DIGITAL CONTENT IN PODCASTS, MUSIC, LOCALISED NEWS AND INFORMATION AND MORE For personal use only PARTNERS / BRANDS RADIO PODCASTS MUSIC MORE NEWS • ORIGINAL CONTENT • INCREMENTAL REACH • LIVE & ON DEMAND • ACTIVE KNOWN USERS • DISCOVERY • TARGETING •
Slide 14: LiSTNR Is Targeting Audio Streamers
LiSTNR IS TARGETING AUDIO STREAMERS For personal use only • Audio savvy Australians represent 9.4m3 people – and will be our core focus and are naturally engaged and attracted to premium audio solutions • Our secondary target extends our market to a further 7.5m Australians – encompassing Audio broa
Slide 15: LiSTNR Will Be Monetised Through Digital Audio Advertising
LiSTNR WILL BE MONETISED THROUGH DIGITAL AUDIO ADVERTISING For personal use only Digital Audio LiSTNR provides the platform to accelerate digital audio revenue growth $5.2m +59% • SCA’s digital audio revenue base is well established and delivered 59% YoY growth (despite adverse economic conditions)
Slide 16: Operational Review
For personal use only REVIEW OPERATIONAL
Slide 17: Operational Review
OPERATIONAL REVIEW For personal use only $ millions H1 FY21 H1 FY20 Var. • EBITDA was $75.3m, 11.5% above prior Audio Revenue 173.3 210.9 (17.8%) corresponding period Television Revenue 84.9 96.1 (11.7%) • Audio revenues back 17.8% on prior year – but Corporate Revenue 1.0 1.1 (9.1%) steadily improv
Slide 18: SCA Revenue Category Analysis – Improving Trend
SCA REVENUE CATEGORY ANALYSIS – IMPROVING TREND For personal use only Top 10 Industry Performance v. 2 year average Home Furnishings & Auto Retail Appliances Automotive Brand Dealers/Parts/Commercial Building & Construction Restaurants Business Finance Travel/Accommodation Media (1.3%) (4.4%) (7.6%)
Slide 19: Leaner Cost Model - Operating and Capex
LEANER COST MODEL - OPERATING AND CAPEX For personal use only $ millions H1 FY21 H1 FY20 Var. • Non revenue related (NRR) costs reduced $45.8m or Revenue 259.2 308.1 (15.9%) 30% from $151.9m in H1 FY20 to $106.1m in H1 FY21 • Revenue related costs are ~30% of revenue, up 1 ppt Revenue Related Costs
Slide 20: Audio - Overview
AUDIO - OVERVIEW For personal use only $ millions H1 FY21 H1 FY20 Var. • EBITDA margin improved to 40.8% Total Revenue 173.3 210.9 (17.8%) • Linear Broadcast & Production costs trended lower, Broadcast & Production (12.7) (12.6) 0.8% but have been directly offset by investment in digital audio produ
Slide 21: Content Regeneration: Key Shows & Key Markets
CONTENT REGENERATION: KEY SHOWS & KEY MARKETS For personal use only 21
Slide 22: Audio – Radio Advertising Revenues
AUDIO – RADIO ADVERTISING REVENUES For personal use only Metro Revenue H1 FY21 Metro Revenue H1 FY20 • SCA has benefited from a broad geographic and Total diverse client base Total $104.6m $79.6m • National Regional Radio has posted growth of Local 6.8% and continues to benefit from the Boomtown Loc
Slide 23: Television - Overview
TELEVISION - OVERVIEW For personal use only $ millions H1 FY21 H1 FY20 Var. • EBITDA margin improved to 23.0% Total Revenue 84.9 96.1 (11.7%) • TV revenues have held up well – down 11.7%, with Broadcast & Production (40.9) (46.2) (11.5%) strong recovery in Q2 FY21 Employee (4.6) (16.5) (71.9%) • Var
Slide 24: Television – Market Leading Power Ratio
TELEVISION – MARKET LEADING POWER RATIO For personal use only • Further improvement on market leading power ratio Commercial Share & Power Ratio performance, up to 1.11 from 1.09 1.11 1.09 1.11 1.05 1.07 • Improvement in sales monetisation underpinned by experienced sales leadership team 38.5% 38.3%
Slide 25: Key Priorities for the Year Ahead
KEY PRIORITIES FOR THE YEAR AHEAD For personal use only • Launch, grow and mature LiSTNR as the “Ultimate Audio Destination for Australians” • Grow core radio audiences in key markets with new shows and formats Audio • Expand & monetise new digital audio inventory – creating a meaningful new stream
Slide 26: Trading Update
TRADING UPDATE For personal use only • Revenue recovery continuing – Q3 forecast to be -6% to -8% on pcp • Full year cost guidance – 30% revenue related costs and $255- $260m non-revenue related costs1 • Full year capex expected at ~$15m • Depreciation and Amortisation ~$32m - H2 consistent with H1
Slide 27: For personal use only
For personal use only
Southern Cross Media Group — H1 FY21 Earnings Presentation on 6ix