Postmedia Network Canada Corp. Class C · TSX:PNC.A
Postmedia Network Canada Corp. Class C — Investor Presentation (November 2010)
37 slides from Postmedia Network Canada Corp. Class C's investor presentation, Nov 29, 2010
Slide 1: Investor Presentation
POSTMED] A) nerwonx Investor Presentation
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation includes information intended or deemed to be “forward-looking information” including in respect of the Company’s digital first strategy and initiatives and expected incremental annual revenue as a result thereof, transformation projects and related annua
Slide 3: Postmedia Network
Postmedia Network On July 13, 2010, Postmedia Network became Canada’s newest media company and the country’s largest publisher of paid English-language daily newspapers. The company’s assets also include community-based publications and 50 destination websites. Our award winning journalists capture
Slide 4: Postmedia - Key Company Highlights
Postmedia - Key Company Highlights • Largest publisher of English-language paid daily newspapers by circulation in Canada Leading Leading English English news news with marquee brands source source in in its its key key markets markets • Postmedia’s metro daily newspapers are #1 English-language dai
Slide 5: Well-Established and Trusted Brands
Well-Established and Trusted Brands • Postmedia’s newspaper brands are woven into the fabric of the communities they serve, some for over a century • 10 daily metropolitan newspapers, which are each #1 in the markets they serve » Brands include the Calgary Herald, Montreal Gazette and Vancouver Sun
Slide 6: Postmedia Network – Key Milestones
Postmedia Network – Key Milestones Subscriber/customer service call centre outsourced to Oct. 31 Dominican Republic – reduction of 126 FTEs Reduction of 261 FTEs through voluntary & involuntary departures Oct. 30 College Printers facility in B.C. closed – reduction of 91 FTEs Sep. 30 Charlotte F. Bu
Slide 7: Executive Team
Executive Team A dynamic group of senior media executives with an average of more than twenty years’ industry experience Paul Godfrey, President and Chief Executive Officer • Served as President and CEO of the National Post, President and CEO of the Toronto Blue Jays • Spent 16 years with Sun Media
Slide 8: Board of Directors
Board of Directors A strong group of recognized leaders from media and business, members sit on both Postmedia Canada Corp. and Postmedia Network Inc. boards Ron Osborne (Chairman) is also Chairman of the Board of Sun Life Financial Inc. and the Board of Governors of Massey Hall and Roy Thomson Hall
Slide 9: Board of Directors (cont’d)
Board of Directors (cont’d) John Paton serves on the Board’s Compensation & Pension Committee and is currently the Chief Executive Officer of the Journal Register Company in the United States which publishes more than 300 print and online products. Graham Savage is the Chair of the Board’s Compensat
Slide 10: Digital First
Digital First
Slide 11: Digital First – Today
Digital First – Today Wherever, whenever Revenue sharing iPad Apps launch with four marquee sponsors Exclusive Canadian Partner B2B Media monitoring, competitive intelligence, licensing Journalists with Exclusive ad repping agreements video cameras Postmedia Postmedia Network Network is is successfu
Slide 12: Looking Ahead – Digital First Strategic Imperatives
Looking Ahead – Digital First Strategic Imperatives • Build on success to date to accelerate development of new products that drive audience growth, increase community engagement and grow revenue » Postmedia Business Ventures » iPad Apps » Mobile • Align print and digital, eliminating historical sil
Slide 13: Creating Community Newsrooms
Creating Community Newsrooms Traditional Newsroom Interactive Community Newsroom Community Community newsrooms newsrooms build build audience audience participation participation and and increase increase inventory inventory lowering lowering the the overall overall cost cost of of content content a
Slide 14: Larger/Higher Value Audiences Drive Revenue Growth
Larger/Higher Value Audiences Drive Revenue Growth Increase Product depth • New content, functionality & segmentation to existing verticals / platforms Drive Advertising Revenue Growth Current Product Offering Deliver advertisers a broader, more engaged Drive reach, UVs and PVs audience, segmented b
Slide 15: Recent Digital First Business Initiatives
Recent Digital First Business Initiatives • Signed a deal with Oodle to be the exclusive seller of Facebook Marketplace in Canada • Launched an online Group Buying site on December 1st, called Swarmjam, to compete with “Deal of the Day” sites like Groupon, Living Social, etc. • Launching iPad apps i
Slide 16: Transformation
Transformation
Slide 17: Transformation Program
Transformation Program Wayne Parrish Chief Transformation Officer Core Transformation Team CEO Weekly Meetings Transformation Committee 20-Person Transformation Working Group Bi-weekly Meetings • Includes Local Transformation Leads from every division Board of Directors Quarterly Meetings • Transfor
Slide 18: Transformation Projects
Transformation Projects • To date, 23 transformation projects have been identified in two major phases » 4 projects under national rollout implementation – Ad Production, Content Management System, Classified Call Centre, Reach Call Centre » 16 projects under concept assessment and/or divisional rol
Slide 19: Industry Overview
Industry Overview
Slide 20: Canada/US Media Penetration Trend
Canada/US Media Penetration Trend • In Canada, newspaper penetration has remained relatively constant, whereas U.S. newspaper penetration has declined • Competing media (radio/magazine/mobile phone) has lower penetration in Canada compared to the U.S. Media Penetration Trends Canada US Medium 2000 2
Slide 21: Average Revenue Growth
Quarterly Revenue Trends • Compared to their U.S. counterparts, Canadian newspapers experienced more moderate revenue declines during the downturn and have seen positive revenue growth in the last three quarters • From Q4 ’07 to Q3 ’10, aggregate U.S. newspaper revenues faced a cumulative drop of 40
Slide 22: Comparable Trading Multiples
Comparable Trading Multiples TEV/LTM EBITDA Canadian Newspaper Comparables Other Canadian Media Comparables U.S. Comparables 7.1x 6.5x 6.3x 6.1x 5.5x 5.2x 4.7x 4.6x 4.3x 4.0x 4.0x Glacier Media FP Newspapers Torstar Yellow Media Quebecor Transcontinental Lee Enterprises Media General New York Times
Slide 23: Business Overview
Business Overview
Slide 24: Leading Market Share Driven by Strong Brands
Leading Market Share Driven by Strong Brands Trusted Brands Across Canada • Well-established brands are a part of Local Market Market local communities – some for more than Publication Market Position (1) Share(1) a century Vancouver 1 100% (4) Vancouver 2 (2) 100% (4) • Postmedia’s metro daily news
Slide 25: Audience Reach
Audience Reach Postmedia Network of websites averages over 8.1 million unique visitors (1) per month – in addition to newspaper sites, the network features the entertainment site, dose.ca, and vertical sites such as driving.ca and working.com Postmedia Network Inc. is the largest publisher (2) of pa
Slide 26: The Postmedia Network ADvantage
The Postmedia Network ADvantage • Postmedia Network reaches more than 2.5 million Canadian Adults on an average weekday - nearly a million more readers than any other daily newspaper network! Average Weekday Readership (Mon-Fri) – Adults 18+ 2,568,600 1,698,600 1,665,400 1,277,700 927,700 867,600 To
Slide 27: Postmedia Network Online Audience
Postmedia Network Online Audience • Postmedia Network owns 50 destination websites and has exclusive advertising representation agreements with 61 non- owned websites • Combined audience of owned and represented websites puts Postmedia Network #2 in the News and Information category by comScore, wit
Slide 28: Postmedia Network Rankings
Postmedia Network Rankings • Postmedia has achieved strong online growth, moving up 3 rank positions vs. last year to #2 in the News and Information category with a reach of 8.1 million monthly unique visitors • Postmedia Newspapers (canada.com Newspapers) maintains the leading position among newspa
Slide 29: Financial Overview
Financial Overview
Slide 30: Improving Revenue Performance
Improving Revenue Performance LTM Consolidated Revenue (C$ millions) $1,300 $1,100 $900 $700 $500 $300 $100 Q1 F09 Q2 F09 Q3 F09 Q4 F09 Q1 F10 Q2 F10 Q3 F10 Q4 F10 • LTM revenue reached bottom in Q2 F 2010 • Revenue returned to modest growth in Q3 F 2010 (+0.5%) and Q4 F 2010 (+1.5%) led by strength
Slide 31: Return to Operating Profit Growth in F2010
Return to Operating Profit Growth in F2010 LTM Operating Profit before Amortization and Restructuring(1) (C$ millions) $300 $250 $200 $150 $100 $50 $0 (2) (2) Q1 F09 Q2 F09 Q3 F09 Q4 F09 Q1 F10 Q2 F10 Q3 F10 Q4 F10 • Operating profit rebounded earlier and more rapidly due to cost reduction initiativ
Slide 32: Strong Free Cash Flow
Strong Free Cash Flow LTM Operating Profit before Amortization and Restructuring(1) less Additions to Property and Equipment (C$ millions) $250 $200 $150 $100 $50 $0 Q1 F09 Q2 F09 Q3 F09 Q4 F09 Q1 F10 Q2 F10 Q3 F10 Q4 F10 • Attractive margins and relatively low capital expenditures drive strong free
Slide 33: Balance Sheet Summary
Balance Sheet Summary • Made optional debt prepayment of US$32.5 million in Q4 F10 • Mandatory debt repayments in F2011 total approx C$12.5 million • Expect to continue to make optional prepayments on quarterly basis Balance Sheet Summary – August 31, 2010 (C$ millions) Cash $40,201 Accrued Liabilit
Slide 34: Q1 Outlook
Q1 Outlook • Continued gradual improvement in revenue environment • Expect third consecutive quarter of modest advertising revenue growth • Significant progress made on cost reduction efforts in Q1 • Q1 restructuring efforts will reduce workforce by more than 400 (approximately 8%) • Restructuring e
Slide 35: Appendix
Appendix
Slide 36: Executive Team
Executive Team A dynamic group of senior media executives with an average of more than twenty years’ industry experience Paul Godfrey, President and Chief Executive Officer • Served as President and CEO of the National Post, President and CEO of the Toronto Blue Jays • Spent 16 years with Sun Media
Slide 37: Executive Team (cont’d)
Executive Team (cont’d) Ed Brouwer, Chief Information Officer • Served in a number of senior media executive positions in London, Calgary, Edmonton, Vancouver and Toronto in sales, marketing, content, data mining, general management and technology • Has worked in various media companies as a reporte
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