Southern Cross Media Group Limited · ASX:SXL
Southern Cross Media — H1 FY15 Earnings Presentation
27 slides from Southern Cross Media's earnings presentation, Feb 25, 2015
Slide 1: H1 FY15 Investor Presentation
For personal use only SOUTHERN CROSS AUSTEREO H1 FY15 INVESTOR PRESENTATION 25 FEBRUARY 2015
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 (“Southern Cross Austereo”) and contains summary information about Southern Cross Austereo’s activities current as at 25 February 2015.
Slide 3: Results Summary
RESULTS SUMMARY For personal use only • Results delivered in line with market guidance Revenue $307.6m (7.3%) EBITDA $85.8m (18.3%) NPAT $34.7m (24.4%) EPS 4.9 cps (24.6%) Net Debt $573.1m (2.5%) • Declared interim fully franked dividend of 3.0 cents per share - DRP shortfall agreement for up to 100
Slide 4: Headline Achievements
For personal use only HEADLINE ACHIEVEMENTS RHYS HOLLERAN 4
Slide 5: Headline Achievements
HEADLINE ACHIEVEMENTS For personal use only • Regional radio remains stable – 0.6% increase in revenue. • Total costs down 2.2% whilst increasing investment in content. • Re-signed key talent agreements – Triple M Hot Breakfast and Hamish & Andy. • Net debt reduced by $14.8m to $573.1m. • Finance co
Slide 6: Operational Strategy
OPERATIONAL STRATEGY For personal use only • Investment in developing and proven talent in Sydney and nationally • Renewal of #1 FM Melbourne breakfast show for 3 years (Hot Breakfast) Regain Metro Share • New shows launched in 2014 now in second year — Target audience up 9% across Melbourne, Brisba
Slide 7: Metro Radio Growth Strategy
METRO RADIO GROWTH STRATEGY For personal use only $700M METRO RADIO AD MARKET 24% FEMALES 36% MALES 18 – 391 25- 541 Complementary brand strategy targets optimum market share Target Target Most listened to network in Australia Dominate target demographic with deep engagement Success Success • Implem
Slide 8: Capital Management Strategy
CAPITAL MANAGEMENT STRATEGY For personal use only Capital management initiatives targeting reduction in leverage to 2.5x Investment in talent to deliver • Dan & Maz breakfast show launched in Sydney ratings and revenue growth • Hamish & Andy national drive show from July 2015 • $11.6m reduction in o
Slide 9: Capital Management Strategy (cont)
CAPITAL MANAGEMENT STRATEGY (CONT) For personal use only • Leverage ratio may increase further at June 2015, but still well within previous covenant of 3.5x. Additional headroom to 3.75x until December 2015 provides investors with increased certainty that leverage ratio covenant will not be breached
Slide 10: H1 FY15 Financial Results
For personal use only H1 FY15 FINANCIAL RESULTS NICK MCKECHNIE 10
Slide 11: Group Reported Statutory Results
GROUP REPORTED STATUTORY RESULTS For personal use only $ millions H1 FY15 H1 FY14 % Var. Fav/(unfav) Revenue 307.6 331.9 (7.3%) Revenue and EBITDA in line with Expenses (221.9) (226.8) 2.2% market guidance Equity Accounted Profit 0.1 (0.1) nm EBITDA 85.8 105.0 (18.3%) Depreciation & Amortisation (13
Slide 12: Cashflow
CASHFLOW For personal use only Cashflow highlights and outlook $ millions H1 FY15 • Refinancing benefits realised – net financing Opening Cash 62.1 payments down 25.3% on H1 FY14. Cash from Operations 75.2 • Underwritten DRP has delivered returns to shareholders whilst conserving $21.2m cash. Paymen
Slide 13: Debt Facilities
DEBT FACILITIES For personal use only $ millions December June • $14.8m reduction in net debt ($21.3m borrowing 2014 2014 group). Drawn Debt 650.0 650.0 • Cancellation of $50m undrawn revolving facility (original maturity January 2016). Less Cash (76.9) (55.6) • No short term refinancing requirement
Slide 14: Covenants
COVENANTS For personal use only Leverage Ratio 3.75 3.75 Interest Cover 3.60 3.60 3.60 4.83 3.50 3.50 4.63 4.61 4.43 3.25 4.25 4.08 4.13 4.0 3.12 2.86 2.83 3.15 2.67 2.66 2.90 2.90 2.90 2.90 2.90 3.00 3.00 2.62 June 2012 Dec 2012 June 2013 Dec 2013 June 2014 Dec 2014 June 2015 Dec 2015 June 2011 Dec
Slide 15: Operational Review
For personal use only OPERATIONAL REVIEW NICK MCKECHNIE
Slide 16: Operational Review
OPERATIONAL REVIEW For personal use only $ millions H1 FY15 H1 FY14 % Variance Fav/(Unfav) Regional Revenue 182.6 188.5 (3.1%) Metro Revenue 113.2 130.4 (13.2%) Corporate Revenue 11.8 13.0 (9.2%) Total Revenue 307.6 331.9 (7.3%) Regional Expenses (123.7) (126.4) 2.1% Metro Expenses (83.0) (86.9) 4.5
Slide 17: Regional
REGIONAL For personal use only % Variance TV: Local sales continue to provide growth, $ millions H1 FY15 H1 FY14 FAV/(UNFAV.) National sales remain challenged by ratings. TV 102.4 108.8 (5.9%) Radio: Remains stable with good growth from Radio 80.2 79.7 0.6% National sales. Total Revenue 182.6 188.5
Slide 18: Metro
METRO For personal use only % Variance $ millions H1 FY15 H1 FY14 FAV/(UNFAV.) Total Revenue 113.2 130.4 (13.2%) Challenges in Sydney have impacted revenues across the Today’s Hit Network, Broadcast & Production (9.4) (10.5) 10.5% whilst Triple M continues to grow. Employee (35.5) (36.5) 2.7% Digita
Slide 19: Corporate
CORPORATE For personal use only % Variance $ millions H1 FY15 H1 FY14 FAV/(UNFAV.) Total Revenue 11.8 13.0 (9.2%) Selling, General and Admin is net of Broadcast & Production (1.4) (1.1) (27.3%) cost recovery charge to Metro and Employee (16.0) (17.0) 5.9% Regional, increase relates to revenue relate
Slide 20: Key Revenue Analysis
For personal use only KEY REVENUE ANALYSIS NICK MCKECHNIE
Slide 21: Regional TV Advertising Revenues
REGIONAL TV ADVERTISING REVENUES For personal use only National/Local Split • TV markets have declined 5.0% whilst TV revenues 101.3 99.3 93.9 are back 5.4%. 45.1 41.7 43.9 • Local TV revenues remain the standout – up 5.3% with power ratio of 1.1. 56.2 57.6 50.0 • Improving CH10 ratings are a positi
Slide 22: Regional Radio Advertising Revenues
REGIONAL RADIO ADVERTISING REVENUES For personal use only • Embedded market position continues to drive National/Local Split growth in regional radio revenues. 76.1 77.1 73.6 • A broad, diverse revenue base has led to consistent performance; 52.7 54.0 54.6 • 71% of revenues are local, a traditionall
Slide 23: Metro Radio Advertising Revenues
METRO RADIO ADVERTISING REVENUES National/Local Split For personal use only • Continued growth on the Triple M Network 118.9 122.7 104.6 with revenues up 8%, partially offsetting 34.9 36.4 33.4 declines on Today’s Hit Network, back 33%. 84.0 86.3 71.2 • Excluding Hit 104.1 2Day in Sydney, revenues a
Slide 24: Outlook & Summary
For personal use only OUTLOOK & SUMMARY RHYS HOLLERAN
Slide 25: H2 FY15 Outlook
H2 FY15 OUTLOOK For personal use only REGIONAL • Q3 trading conditions are steady with the some strong results out of the Queensland election and continuation of positive momentum with Big Bash League. • Revenue growth expected in Q3. METRO RADIO • Q3 trading conditions consistent with H1 FY15 – Jan
Slide 26: Summary
SUMMARY For personal use only • Commitment to investing in talent and regeneration of Today’s Hit Network whilst steadily growing Triple M. • Capital management strategy designed to deliver reduced gearing metrics – Strong support of lenders for strategy with increase in covenant headroom during reg
Slide 27: Thank You – Questions & Answers
For personal use only THANK YOU QUESTIONS & ANSWERS
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