Southern Cross Media Group Limited · ASX:SXL
Southern Cross Media — H1 FY18 Earnings Presentation
31 slides from Southern Cross Media's earnings presentation, Feb 23, 2018
Slide 1: H1 FY18 Investor Presentation
For personal use only SOUTHERN CROSS AUSTEREO H1 FY18 INVESTOR PRESENTATION 23 February 2018 1
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 23 February 2018. Th
Slide 3: H1 FY18 Results
For personal use only H1 FY18 Results Grant Blackley 3
Slide 4: Results Summary
RESULTS SUMMARY For personal use only • Statutory result impacted by divestment of NNSW H1 FY18 H1 FY17 Statutory Result TV. Group revenues increased by 1.3% on a like for like basis Revenue $333.3m $351.8m • Regional business performing well with 4.6% EBITDA $78.1m $92.6m revenue growth on a like f
Slide 5: Results Summary – EBITDA Bridge
RESULTS SUMMARY – EBITDA BRIDGE For personal use only • Short term impact to earnings from assets EBITDA Bridge $m’s divested in prior period - $5.5m relates to H1 FY17 EBITDA $92.6m disposal of NNSW TV Disposal of NNSW TV $(5.5m) • Corporate costs lower in 1H FY17 due to $5m of non-recurring items
Slide 6: Headline Achievements
HEADLINE ACHIEVEMENTS For personal use only • Group revenues up 1.3% (on like for like basis) • Regional revenues up 4.6% (on a like for like basis) Sales • National advertisers committing considerably more into regional radio markets Performance • Metro advertising markets subdued across Q1 yet imp
Slide 7: H1 FY18 Financial Results
For personal use only H1 FY18 FINANCIAL RESULTS Nick McKechnie 7
Slide 8: Group Reported Statutory Results
GROUP REPORTED STATUTORY RESULTS For personal use only H1 FY17 Adj. for $ millions H1 FY18 H1 FY17 Var. NNSW Var. Revenue 333.3 351.8 (5.3%) 329.0 1.3% • Statutory result impacted by NNSW TV – divested May 2017 Expenses (255.2) (259.2) (1.6%) (241.5) 5.7% • Revenue growth of 1.3% on a EBITDA 78.1 92
Slide 9: Cashflow
CASHFLOW For personal use only $ millions H1 FY18 H1 FY17 Opening Cash 49.0 94.8 • SCA continues to generate strong, Cash from Operations 68.8 76.3 consistent cash flow with modest Tax payment (18.9) (24.4) capital investment Net Payments for Non-Current Assets (11.5) (14.2) • Improved cash conversi
Slide 10: Cashflow – SCA Free Cashflow Leads the Sector
CASHFLOW – SCA FREE CASHFLOW LEADS THE SECTOR For personal use only Cash from Operations less CAPEX to EBITDA 73.6% 65.0% 63.9% 46.3% 40.3% 20.5% 15.3% 6.8% SCA (Dec 17) SCA (Jun 17) Media Peer 1 Media Peer 2 Media Peer 3 Media Peer 4 Media Peer 5 Media Peer 6 (Jun 17) (Jun 17) (Jun 17) (Jun 17) (Ju
Slide 11: Debt Reduction Program
DEBT REDUCTION PROGRAM For personal use only $m's Net Debt • Debt Reduction Program has been a priority for the company in last two years - yielding 472.6 substantial results • 43% reduction in finance costs over 2 years 347.8 from $13.6m in 1H FY16 to $7.8m in 1H FY18 324.8 • Successfully refinance
Slide 12: Financial Covenants
FINANCIAL COVENANTS For personal use only Interest Cover Ratio • Material improvement in financial 10.6 covenants over past two years following 9.24 5.86 debt reduction – with resulting reduction in financing costs 3.00 3.00 3.00 • Significant headroom exists under Dec 2015 Dec 2016 Dec 2017 covenan
Slide 13: Dividend Policy
DIVIDEND POLICY For personal use only Dividend Paid • Review of dividend payout policy in light of strengthened balance sheet, high cash conversion and sale of NNSW TV 4.00 • Target payout ratio adjusted to 65% - 85% of 3.50 NPAT 3.00 • Strong cash generation enabling higher payout ratio to sharehol
Slide 14: Operational Review
For personal use only OPERATIONAL REVIEW 14
Slide 15: Operational Review
OPERATIONAL REVIEW For personal use only H1 FY17 Adj $ millions H1 FY18 H1 FY17 Var. Adj for NNSW Var. • Group Revenue up 1.3% (excl NNSW TV) Regional Revenue 202.8 216.7 (6.4%) 193.9 4.6% Metro Revenue 121.4 125.2 (3.0%) 125.2 (3.0%) • Regional revenues grew 4.6% and Corporate Revenue 9.1 9.9 (8.6%
Slide 16: Regional – TV & Radio
REGIONAL – TV & RADIO For personal use only H1 FY17 $ millions H1 FY18 H1 FY17 Var. Adj. for Adj. • Strong regional media assets – Var. consistent and compounding revenue NNSW growth TV Revenue 112.4 130.1 (13.6%) 107.3 4.7% Radio Revenue 90.4 86.6 4.4% 86.6 4.4% • TV revenues continue to grow with
Slide 17: Regional Radio Advertising Revenues
REGIONAL RADIO ADVERTISING REVENUES For personal use only $m's 146.6 • Regional radio revenues grew 4.4% 142.9 consolidating and improving on prior year growth of 2.8% • National revenues up 12.8% or $3.3m after 58.8 concerted effort to educate national 58.6 advertisers of the value of regional audi
Slide 18: Regional TV Advertising Revenues
REGIONAL TV ADVERTISING REVENUES For personal use only $m's • Total TV revenues up 5.3% (excl NNSW TV) 122.7 • Nine affiliated markets leading the way – with 21.3 106.8 good ratings improvements, completion of news rollout and stronger monetisation of 49.2 46.4 assets • Local sales teams continue to
Slide 19: Regional TV Power Ratio for Nine Affiliation
REGIONAL TV POWER RATIO FOR NINE AFFILIATION For personal use only Commercial Share & Power Ratio • SCA grew revenue share of the market in 1.09 1.06 H1 FY18 by 5 share points to a 38.1% 1.03 share 0.95 0.96 38.1% 35.8% • Power ratio moved above 1.0x 34.9% 33.4% immediately after affiliation switch
Slide 20: Metro Radio
METRO RADIO For personal use only $ millions H1 FY18 H1 FY17 Var. • Metro Radio revenues contracted $3.8m or 3.0% Total Revenue 121.4 125.2 (3.0%) due to lower than expected market demand (weighted to Q1) and under-performance of 2DAY Broadcast & Production (7.4) (10.0) (25.6%) FM breakfast Employee
Slide 21: Corporate
CORPORATE For personal use only $ millions H1 FY18 H1 FY17 Var. • Results impacted by ~$5m favourable prior year Total Revenue 9.1 9.9 (8.6%) movements, including resolution of copyright dispute and benefit of FY16 ACMA radio rebate in H1 FY17 Total Expenses (16.9) (10.9) 55.0% • Investment in Proje
Slide 22: Outlook & New Investments
For personal use only OUTLOOK & NEW INVESTMENTS Grant Blackley 22
Slide 23: Securing Future Growth – A Year of Investment
SECURING FUTURE GROWTH – A YEAR OF INVESTMENT For personal use only • Seamless transition from Hamish and Andy to Hughesy and Kate on Hit Network Compelling • Investment in new National Drive show on Triple M creating opportunity to grow aggregate Drive Content share • Focussed on improving 2DAY FM
Slide 24: Securing Future Growth – A Year of Investment
SECURING FUTURE GROWTH – A YEAR OF INVESTMENT For personal use only • Seamless transition from Hamish and Andy to Hughesy and Kate on Hit Network Compelling • Investment in new National Drive show on Triple M creating opportunity to grow aggregate Drive share Content • Focussed on improving 2DAY FM
Slide 25: Metro – FM + DAB New Investment
METRO – FM + DAB NEW INVESTMENT For personal use only • SCA owns largest amount of Digital Radio (DAB) spectrum of any commercial broadcaster • New commercial “brand family” strategy – aggregating the FM & Digital Radio audiences • Effective opportunity to monetise from Survey 1 2018, release of FM
Slide 26: Securing Future Growth – A Year of Investment
SECURING FUTURE GROWTH – A YEAR OF INVESTMENT For personal use only • Seamless transition from Hamish and Andy to Hughesy and Kate on Hit Network Compelling • Investment in new National Drive show on Triple M creating opportunity to grow aggregate Drive share Content • Focussed on improving 2DAY FM
Slide 27: PodcastOne – New Investment
PODCASTONE – NEW INVESTMENT For personal use only PodcastOne • Successful launch of PodcastOne Australia (P1A) Cumulative Downloads platform focussed on commissioning premium 2017 original audio content – and educating industry about this emerging medium 10M • Over 10m downloads in first six months
Slide 28: Securing Future Growth – A Year of Investment
SECURING FUTURE GROWTH – A YEAR OF INVESTMENT For personal use only • Seamless transition from Hamish and Andy to Hughesy and Kate on Hit Network Compelling • Investment in new National Drive show on Triple M creating opportunity to grow aggregate Drive Content share • Focussed on improving 2DAY FM
Slide 29: Outlook for H2 FY18
OUTLOOK FOR H2 FY18 For personal use only • Group revenues up ~5% year on year for January/February 2018 (excl NNSW TV) Trading • New Drive show revenues up after initial 7 weeks - with advertiser interest growing Update • Regional markets continue to benefit from strengthening national advertising
Slide 30: For personal use only
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