Sky Network Television Ltd · NZX:SKT
Sky Network Television — Investor Presentation (May 2020)
35 slides from Sky Network Television's investor presentation, May 21, 2020
Slide 1: COVID-19 Response, Refreshed Strategy and Capital Structure
For personal use only COVID-19 Response, Refreshed Strategy and Capital Structure 21 May 2020 © Sky Network Television Limited NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES
Slide 2: Important Notice and Disclosure
Important Notice and Disclosure Disclaimer This presentation has been prepared by Sky Network Television Limited (NZ company number 1579204, ARBN 113 908 875, ticker SKT (NZX and ASX)) (the “Company”) and is dated 21 May 2020. This For personal use only presentation has been prepared to provide: (i)
Slide 3: Important Notice and Disclosure (cont.)
Important Notice and Disclosure (cont.) Financial information For personal use only The Company’s financial information has been prepared in accordance with Generally Accepted Accounting Practice. It complies with the New Zealand Equivalents to International Financial Reporting Standards (NZ IFRS) a
Slide 4: Important Notice and Disclosure (cont.)
Important Notice and Disclosure (cont.) Disclaimer: To the maximum extent permitted by law, each of the Company, the Underwriters, the Joint Lead Managers and their respective affiliates, related bodies corporate, directors, For personal use only officers, partners, employees, agents and advisers di
Slide 5: Current trading update
Current trading update For personal use only Sky has made considerable progress on its strategy with total Sky is excited about the return of live sport under Alert Level 2. 1 subscribers having increased by 205,823 since Sky’s H1 4 However, the return of sport is expected to be gradual, and plans f
Slide 6: Comprehensive response to strengthen Sky's balance sheet and reposition for refreshed strategy
Comprehensive response to strengthen Sky’s balance sheet and reposition for its refreshed strategy Operational cost reduction Banking group support Balance sheet flexibility Sky’s refreshed strategy For personal use only and cash preservation and liquidity Annualised reduction in operating Facil
Slide 7: COVID-19 response and short term strategic focus
For personal use only COVID-19 response and short term strategic focus NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES
Slide 8: Summary of COVID-19 impact on Sky
Summary of COVID-19 impact on Sky COVID-19 and the associated restrictions on movement, travel and gatherings has made a significant amount of live sports For personal use only content unavailable, but has also resulted in an uplift in entertainment viewership and subscribers Increased demand for •
Slide 9: Short term focus: Response to COVID-19
Short term focus: Response to COVID-19 Sky has adjusted its focus to reflect the current environment and expects to implement cost saving initiatives of up to $80–95m For personal use only in FY21 During the COVID-19 disruption Cost response in FY21 to COVID-19 vs. previous FY20 period Sky has focus
Slide 10: Total Sky subscribers have continued to grow during COVID-19
Total Sky subscribers have continued to grow during COVID-19 Total subscriber1 growth of 2.7% since COVID-19 Satellite acquisition reduced and churn stable For personal use only disruption began, 8.6% growth in streaming during lockdown COVID-19 Streaming includes impact begins New Zealand Alert imp
Slide 11: Satellite ARPU impacted by sport downgrades, supported by movie upgrades
Satellite ARPU has been impacted by sport package downgrades, but is being supported by movie upgrades For personal use only Movie upgrades are partially offsetting sport Satellite subscriber ARPU1 has decreased by <1% downgrades (during COVID-19) 0.3% (% of total satellite subscribers) Net daily ch
Slide 12: Financial outlook
Financial outlook For personal use only Financial summary Commentary Sky’s FY21 scenario is based on the following key assumptions: $m FY20 FY21 FY19A1 ─ Some live sport returns in H1 FY21 but with restrictions on movement and revised guidance scenario gatherings remaining in place. A return to fu
Slide 13: Refreshed strategic focus following resolution of COVID-19
For personal use only Refreshed strategic focus following resolution of COVID-19 NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES
Slide 14: Sky has an exciting future as a modern, digital, consumer-led multi-media business
Sky has an exciting future as a modern, digital, consumer-led multi-media business For personal use only Sky’s goal is to connect our customers with Sky’s strategic pillars the sport and entertainment content they love, in ways that work for them Strengthen our significant core business through co
Slide 15: Sky provides access to a broad range of premium content
Sky provides access to a broad range of premium content For personal use only The Home of Sport A World of Entertainment SANZAAR RUGBY NRL ICC CRICKET NETBALL V8 SUPERCARS OLYMPIC GAMES 15 NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES
Slide 16: Sky will have business segments with diversified maturities and outlooks
Sky will have business segments with diversified maturities and outlooks, targeting different types of customers EXISTING BUSINESSES NEW BUSINESSES For personal use only VALUABLE CORE CURRENT GROWTH OPPORTUNITY FUTURE GROWTH OPPORTUNITIES Satellite Streaming Broadband connectivity RugbyPass Traditio
Slide 17: Sky's satellite offering continues to deliver value
Sky’s satellite offering continues to deliver value to its significant customer base For personal use only Satellite delivery to the home Sky’s satellite offering has low churn in the majority of remains core to Sky’s offering customers... % of 73% 20% 7% Cost effective delivery for customers cust
Slide 18: Sky's streaming offering delivers content enjoyed by New Zealanders
Sky’s streaming offering delivers content enjoyed by New Zealanders For personal use only Scaling towards a sustainable lower-cost model Strategy • Significant progress achieved – from zero to 414,576 subscribers1 (including acquired Lightbox • Two services streaming premium entertainment subscriber
Slide 19: Sky has a role to play in connectivity
Sky has a role to play in connectivity For personal use only Broadband – FY21 likely launch Mobile – Considering market entry • Leverage Government investment in UFB1 and Sky’s well-known • Operate as a MVNO2 brand • Target customers in non-traditional Sky segments • Retention benefits for Sky’s sig
Slide 20: RugbyPass is the world's largest rugby audience business
RugbyPass is the world’s largest rugby audience business For personal use only Overview of RugbyPass Strategic model to deliver value • Aggregated rugby media platform, launched in 2016, and positioned to monetise rugby across global markets Current focus model • Engaged reach of 33 million1 rugby f
Slide 21: Medium to long-term financial outlook
Medium to long-term financial outlook For personal use only • Growth in digital streaming customers is substantially less capital intensive • Sky will continue to seek to optimise its asset base and investigate divesting non-core assets where Sky is not the most efficient owner • Long-term EBITDA ma
Slide 22: Capital structure
For personal use only Capital structure NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES
Slide 23: Equity raising details
Equity raising details • NZ$157m fully underwritten equity raising, comprising: For personal use only Offer size and ― NZ$9m institutional placement (“Placement”) structure ― NZ$148m pro-rata accelerated entitlement offer (“Entitlement Offer”) at a ratio of 2.83 for 1 • Approximately 1,310m new Sky
Slide 24: Pro forma capitalisation and liquidity
Pro forma capitalisation and liquidity Pro forma liquidity position For personal use only Impact of equity raise (NZ$m) Liquidity (30 April 2020) Pro forma liquidity (30 April 2020) (net of transaction costs) Drawn bank debt 166 (148) 18 1 Bonds 100 100 Cash 107 107 Available undrawn debt 34 182 Tot
Slide 25: Equity raising timetable
Equity raising timetable For personal use only Event Date Announcement of equity raising and trading halt pre market open Thursday, 21 May 2020 Record date for the Entitlement Offer Monday, 25 May 2020 Institutional Entitlement Offer and Placement Institutional Entitlement Offer and Placement opens
Slide 26: Key risks relating to the equity raising
For personal use only Key risks relating to the equity raising NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES
Slide 27: Key risks relating to the equity raising
Key risks relating to the equity raising For personal use only This section outlines the key risks Sky has identified relating to the equity raise. These risks may affect the future operating and financial performance of Sky and the Sky share price. Like any investment, there are risks associated wi
Slide 28: Key risks relating to the equity raising
Key risks relating to the equity raising • Sky’s premium content suppliers continue to be impacted by COVID-19 For personal use only • The ability of sports codes to deliver live sports in the format assumed at the time of entering into the supply agreements is being impacted by COVID-19 and Governm
Slide 29: Key risks relating to the equity raising (cont.)
Key risks relating to the equity raising (cont.) • The spread of COVID-19 and the measures taken by governments in response have had a negative impact on the New Zealand economy and New Zealanders’ For personal use only freedom of movement and freedom to gather. Sky’s customers include both resident
Slide 30: Key risks relating to the equity raising (cont.)
Key risks relating to the equity raising (cont.) • Sky has undertaken a capital sufficiency modelling exercise to assist in determining the optimal equity raise size. Based on its modelling, Sky expects to have For personal use only sufficient liquidity to meet capital requirements under what Sky co
Slide 31: Key risks relating to the equity raising (cont.)
Key risks relating to the equity raising (cont.) For personal use only • Sky had $547m of assets recorded on its balance sheet as at 31 December 2019 for programming rights inventory and goodwill. There is a risk that these assets may be considered impaired. Further information on the assumptions cu
Slide 32: Appendix: Foreign selling restrictions
Appendix: Foreign selling restrictions This document does not constitute an offer of New Shares of the Company in any jurisdiction in which it would be unlawful. In particular, this document may not be distributed to any person, and For personal use only the New Shares may not be offered or sold, in
Slide 33: Appendix: Foreign selling restrictions (cont.)
Appendix: Foreign selling restrictions (cont.) The following is a summary of the statutory rights of rescission or to damages, or both, available to purchasers in Ontario. In Ontario, every purchaser of the New Shares purchased pursuant to For personal use only this document (other than (a) a "Canad
Slide 34: Appendix: Foreign selling restrictions (cont.)
Appendix: Foreign selling restrictions (cont.) Hong Kong For personal use only WARNING: This document has not been, and will not be, registered as a prospectus under the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32) of Hong Kong, nor has it been authorised by the Securities
Slide 35: Appendix: Foreign selling restrictions (cont.)
Appendix: Foreign selling restrictions (cont.) Switzerland The offering of the New Shares in Switzerland is exempt from requirement to prepare and publish a prospectus under the Swiss Financial Services Act ("FinSA") because such offering is made For personal use only to professional clients within
Sky Network Television — Investor Presentation (May 2020) on 6ix