Sky Network Television Ltd · NZX:SKT
Sky Network Television — FY2017 Earnings Presentation
41 slides from Sky Network Television's earnings presentation, Aug 22, 2017
Slide 1: SKY Annual Results 2017
For personal use only SKY ANNUAL RESULTS 2017 |
Slide 2: The Evolving SKY Customer Base
THE EVOLVING SKY CUSTOMER BASE For personal use only JUNE 2016 JUNE 2017 NET GAIN SKY satellite 739,532 705,652 (33,880) Third party 37,674 30,925 (6,749) Igloo* 8,628 0 (8,628) Fatso 13,275 8,269 (5,006) OTT(Neon and Fan Pass) 53,570 79,936 26,366 852,679 824,782 (27,897) * Igloo service was closed
Slide 3: Moving Annual Churn
For personal use only 0.00% 5.00% 10.00% 15.00% 20.00% 25.00% 30.00% 35.00% Jun-98 Nov-98 Apr-99 Sep-99 © SKY 2017 Annual Results 2017 Feb-00 Jul-00 Dec-00 May-01 Oct-01 Mar-02 Aug-02 Jan-03 Jun-03 Nov-03 Apr-04 Sep-04 Feb-05 Jul-05 Dec-05 May-06 Oct-06 Mar-07 Aug-07 Jan-08 Jun-08 MOVING ANNUAL CHUR
Slide 4: Churn by Tenure
CHURN BY TENURE 60.00% For personal use only 50.00% 40.00% 30.00% 20.00% 10.00% 0.00% 2016 © SKY 2017 Annual Results 2017 Page 4
Slide 5: SKY Customer Segmentation Profiles
SKY CUSTOMER SEGMENTATION PROFILES KIWI VIEWERS GET VALUE FROM VIEWING IN DIFFERENT WAYS For personal use only SOCIAL AVID ONLINE NEUTRAL FANATICAL HABITUAL MODERN OWLS LEARNERS ADDICTS COUPLES HEARTLANDER HEARTLANDER HOMEMAKERS
Slide 6: Servicing the Changing Face of the SKY Customer
WHICH IS SERVICING THE CHANGING FACE OF THE SKY CUSTOMER For personal use only SKY CUSTOMERS NZ POPULATION Fanatical and Habitual Heartlanders Online Addicts Neutral Couples Modern Homemakers Avid Learners Social Owls © SKY 2017 Annual Results 2017 Page 6
Slide 7: SKY Box Customer Monthly Content Usage
SKY BOX CUSTOMER MONTHLY CONTENT USAGE For personal use only 300 250 130m HOURS of 200 Live Viewing 150 100 143m HOURS Recorded to Planner 50 0 © SKY 2017 Annual Results 2017 Page 7
Slide 8: Connectivity on SKY Boxes
60% CONNECTIVITY ON SKY BOXES 50% For personal use only 40% 30% 50% 20% 29% 10% 18% © Photosport.nz 0% Feb 2016 Aug 2016 Aug 2017 OLYMPICS 2016 | © SKY 2017 Annual Results 2017 Page 8
Slide 9: SKY IP Customer Monthly Content Usage
SKY IP CUSTOMER MONTHLY CONTENT USAGE For personal use only Average requests per month 2016/17 SKY GO 1,157k Fan Pass 209k NEON 576k On Demand 512k 0 200 400 600 800 1000 1200 1400 On Demand NEON Fan Pass SKY GO July 2017 month requests SKY GO 795k Fan Pass 258k NEON 1,699k On Demand 775k 0 200 400
Slide 10: SKY Premium Products per Subscriber
SKY PREMIUM PRODUCTS PER SUBSCRIBER For personal use only 3.93 3.81 3.72 © Offside Sports Photography LIONS 2017 | Page 10 © SKY 2017 Annual Results 2017
Slide 11: ARPU from SKY Traditional Subscribers
ARPU FROM SKY TRADITIONAL SUBSCRIBERS For personal use only $90.00 $85.00 $83.48 $81.67 $80.00 $79.54 $77.52 $75.83 $75.00 $70.00 $65.00 $60.00 $55.00 $50.00 2013 2014 2015 2016 2017 | © SKY 2017 Annual Results 2017 Page 11
Slide 12: Total ARPU
TOTAL ARPU $85.00 For personal use only $79.54 $78.82 $80.00 $78.63 $77.52 $75.83 $75.00 $70.00 $65.00 $60.00 $55.00 $50.00 2013 2014 2015 2016 2017 From 2016 ARPU now Includes IGLOO, NEON and FAN PASS not included in previous periods | © SKY 2017 Annual Results 2017 Page 12
Slide 13: Revenue
REVENUE For personal use only Millions 950 927.5 928.2 909 900 893.5 885 850 800 750 700 650 2013 2014 2015 2016 2017 | © SKY 2017 Annual Results 2017 Page 13
Slide 14: Advertising Revenue
ADVERTISING REVENUE For personal use only 80.0 Millions 70.0 60.0 24.7 27.3 24.3 21.4 26.4 50.0 40.0 30.0 49.3 46.7 41.6 43.2 45.2 20.0 10.0 - 2013 2014 2015 2016 2017 Sky Prime | © SKY 2017 Annual Results 2017 Page 14
Slide 15: Total Television Advertising Revenue
For personal use only -10% 15% 10% -5% 0% 5% | Sep 10 Qtr Dec 10 Qtr Mar 11 Qtr (YOY QUARTERLY CHANGE) Jun 11 Qtr Sep 11 Qtr © SKY 2017 Annual Results 2017 Dec 11 Qtr Mar 12 Qtr © SKY 2017 Annual Results 2017 Jun 12 Qtr Sept 12 Qtr Dec 12 Qtr Mar 13 Qtr Jun 13 Qtr Sept 13 Qtr Dec 13 Qtr Mar 14 Qtr J
Slide 16: Programming Costs % Revenue
PROGRAMMING COSTS % REVENUE 50% For personal use only 45% 40% 35% 30% 25% 36% 39% 20% 15% 10% 5% 0% 2016 2017 © Photosport.nz | Page 16 © SKY 2017 Annual Results 2017
Slide 17: EBITDA
490.0 EBITDA 460.0 430.0 For personal use only 400.0 370.0 340.0 Millions 310.0 280.0 250.0 220.0 190.0 160.0 325.3 292.3 130.0 100.0 70.0 40.0 10.0 -20.0 2016 2017 | © SKY 2017 Annual Results 2017 Page 17
Slide 18: Net Profit
NET PROFIT 200.0 For personal use only Millions 150.0 100.0 147.1 116.3 50.0 - 2016 2017 © Photosport.nz -50.0 | Page 18 © SKY 2017 Annual Results 2017
Slide 19: Cashflow
180.0 CASHFLOW 170.0 For personal use only Millions 160.0 150.0 140.0 165.6 130.0 120.0 142.2 © Photosport.nz 110.0 100.0 2016 2017 | Page 19 © SKY 2017 Annual Results 2017
Slide 20: Financial Detail
For personal use only FINANCIAL DETAIL
Slide 21: Results Summary
RESULTS SUMMARY For personal use only 2016 2017 % Change Revenue 928.2 893.5 (3.7%) Operating expenses 602.9 601.2 (0.3%) EBITDA 325.3 292.3 (10.1%) Depn & Amort 100.2 105.1 4.9% EBIT 225.1 187.2 (16.8%) Interest 20.1 19.6 (2.5%) Tax 57.9 51.3 (11.4%) NET PROFIT after TAX 147.1 116.3 (20.9%) | © SKY
Slide 22: Revenue Analysis
REVENUE ANALYSIS For personal use only 2016 2017 % Change Core satellite revenue 753.1 725.1 (3.7%) Other subscriptions 79.3 82.2 3.7% Advertising 74.0 68.1 (8.0%) Installation and other revenue 21.8 18.1 (17.0%) TOTAL REVENUE 928.2 893.5 (3.7%) | © SKY 2017 Annual Results 2017 Page 22 © SKY 2017 An
Slide 23: Expense Analysis
EXPENSE ANALYSIS For personal use only 2016 2017 % Change Programming 331.1 349.4 5.5% Subscriber related costs 106.3 100.2 (5.7%) Broadcasting and infrastructure 96.0 97.6 1.7% Depreciation and amortisation 100.2 105.1 4.9% Other costs 69.5 54.0 (22.3%) TOTAL EXPENSE 703.1 706.3 0.5% | © SKY 2017 A
Slide 24: Capital Expenditure
CAPITAL EXPENDITURE For personal use only 2016 2017 % Change Install 32.6 29.3 (10.1%) Decoders 63.8 19.7 (69.1%) Other 32.4 30.7 (5.2%) TOTAL CAPITAL 128.8 79.7 (38.1%) EXPENSE | © SKY 2017 Annual Results 2017 Page 24 © SKY 2017 Annual Results 2017
Slide 25: Operating Cash Flow
OPERATING CASH FLOW For personal use only 2016 2017 % Change Net Cash from operating activities 275.8 245.2 (11.1%) Net Cash used in investing activities (133.6) (79.6) (40.4%) FREE CASH FLOW available 142.2 165.6 16.5% to Shareholders | © SKY 2017 Annual Results 2017 Page 25
Slide 26: Funding Profile
FUNDING PROFILE For personal use only FACILITY DRAWN MARGIN MATURITY Bank Debt $300m $200m 145bp Jul 2020 Fixed rate at Bond $100m $100m Mar 2021 6.25% | © SKY 2017 Annual Results 2017 Page 26 © SKY 2017 Annual Results 2017
Slide 27: Foreign Currency Hedging
FOREIGN CURRENCY HEDGING For personal use only For USD exposures 93% hedged for 30 June 2018 @ 0.7057 57% hedged for June 2019 year @ 0.7081 37% hedged for June 2020 year @ 0.7051 For AUD exposures 91% hedged for 30 June 2018 @ 0.9393 39% hedged for 30 June 2019 @ 0.9264 Average $US payment rate for
Slide 28: Dividend
DIVIDEND For personal use only The Board has declared a fully imputed final dividend of 12.5 cps ($48.6m) to be paid and a supplementary dividend of 2.2059 to be paid to non-residents. Record date is 5 September 2017. Payment date is 14 September 2017. 2017 2016 2015 2014 2013 2012 2011 2010 2009 20
Slide 29: Strategy and Trends
For personal use only STRATEGY AND TRENDS
Slide 30: Vodafone
vodafone Ajuo esn feuosied 10}
Slide 31: For personal use only
For personal use only
Slide 32: British & Irish Lions Tour and America's Cup
THE BRITISH & IRISH LIONS TOUR TO NEW ZEALAND. Rin2ov6. * 2017 AMERICAS CUP BERMUDA2017
Slide 33: Winter Olympics February 2018
WINTER OLYMPICS For personal use only FEBRUARY 2018
Slide 34: For personal use only
For personal use only
Slide 35: For personal use only
For personal use only
Slide 36: Peak TV
PEAK TV 600 For personal use only 534 500 455 421 400 389 349 300 268 200 100 0 2012 2013 2014 2015 2016 2017 © SKY 2017 Annual Results 2017 Page 36
Slide 37: The Best of Premium Drama
THE BEST OF PREMIUM DRAMA For personal use only GAME OF BIG LITTLE WESTWORLD TABOO THRONES LIES FARGO LEGION THE FEUD AMERICANS BILLIONS THE NIGHT GENIUS HOMELAND OF DOCTOR RAY THE TWIN PEAKS WHO DONOVAN LEFTOVERS Page 37
Slide 38: SKY Customer Apps Launched This Year
SKY CUSTOMER APPS LAUNCHED THIS YEAR For personal use only
Slide 39: New Look SKY Customer EPG App Coming
NEW LOOK SKY CUSTOMER EPG APP COMING For personal use only SEPTEMBER 2017
Slide 40: Piracy
For personal use only PIRACY
Slide 41: SKY Annual Results 2017
For personal use only SKY ANNUAL RESULTS 2017
Sky Network Television — FY2017 Earnings Presentation on 6ix