Slide 1: Full Year Results 2019
Full Year Results 2019 24th February 2020 1 HT&E Limited ABN 95 008 637 643
Slide 2: Statutory Results
Statutory Results • Revenue from continuing operations down 7% HT&E Reported Result (excluding Adshel in 2018) A$ million 2019 20181 % change % change • Reported EBITDA up 5%; down 17% before transition to AASB 16 Lease reported ex AASB 16 • Challenging, cyclical ad market; Radio remains relevant to
Slide 3: Focus on core business
Focus on core business Content and Audiences • Radio has grown 22% in reach over the last 10 years and continues to be the major source of audio entertainment 1 • ARN - No.1 metropolitan network; Audience growth outgrowing the market +3.8% growth in +1.4% market growth 2 • Highest reach in history –
Slide 4: Strong balance sheet provides optionality
Strong balance sheet provides optionality • Strong balance sheet and capital management in consolidating sector • $111m net cash and $250m undrawn debt • Increased dividend policy (60-80%) • Accretive share buy-back optionality maintained • Exiting ancillary businesses (Gfinity and Unbnd) protecting
Slide 5: Financial Results
Financial Results 5
Slide 6: 2019 Reported Financial Result
2019 Reported Financial Result • Revenue from continuing operations down $19.1m (7%) A$ million 2019 2019 Pre 20181 Reported AASB 16 - Challenging Australian media market Revenue before finance income 252.7 252.7 271.8 Other income 6.7 6.3 7.4 - Protests in Hong Kong in H2 and non-renewal of materia
Slide 7: ARN
ARN • First year total ad market decline since 2012; radio share unchanged A$ million 2019 20181,2 % change at 8.6% Radio 208.4 222.3 (6%) - ARN Radio revenue down 6% in line with Radio market decline for 2019 Digital & Other 14.9 13.2 13% - Radio market back 2.4% in H1 and 9.8% in H2 Total revenue
Slide 8: Hong Kong Outdoor - Cody
Hong Kong Outdoor - Cody • Strong first half; well ahead of PY Local currency A$ million 2019 20181,2 % change % change • H2 revenues materially impacted by protests Roadside2 16.6 20.7 (20%) (26%) - Tram shelters down 24% Transit 8.3 10.1 (19%) (24%) - Western Harbour Tunnel up 7%, minimal impact f
Slide 9: Non-audio Investments: review complete
Non-audio Investments: review complete Investment Carrying LTM EBITDA Review A$ million Ownership Value Pre AASB 16 decision Commentary • FY19 result impacted by challenging local media market Emotive 51% Consolidated $0.5m Retain • Continues to deliver to long term strategic plan HT&E Events / Gfin
Slide 10: Soprano
Soprano • HT&E ~25% interest A$ million LTM LTM % change 2019 2018 • Revenue growth in all regions and majority of countries: Revenue 67.4 56.2 20% - APAC up 23% Cost of sales (26.9) (23.6) 14% - Europe and UK up 13% Gross profit 40.5 32.6 24% - Americas up 10% Staff costs (17.4) (14.7) 19% • Strong
Slide 11: Corporate Costs
Corporate Costs • FY cost savings driven by post-Adshel team restructure and office A$ million 2019 2018 % change downsizing during 2019. Salary and wages 4.1 5.0 (18%) • Lower incentive costs reflect FY19 performance; majority of cost attributable to FY18 scheme Incentives provided for 1.0 3.0 (65%
Slide 12: Balance Sheet
Balance Sheet A$ million Reported Dec 2019 Back out leases Dec 2019 Pro forma Dec 2019 Restated Dec 2018 Change $ Other key like-for-like balance sheet movements: Cash and cash equivalents 111.0 – 111.0 128.4 (17.4) Receivables 45.7 (0.1) 45.6 55.2 (9.6) • Receivables lower on reduced Nov / Dec reve
Slide 13: Cash Flow
Cash Flow Dec 2018 Continuing Dec 2018 Operating cash inflow of $31.3m before lease accounting, A$ million Dec 2019 Operations Reported down 21% on 2018, impacted by; EBITDA 75.6 71.8 105.5 • EBITDA down 17% pre-transition Net change in working capital, non-cash and exceptional items (7.1) 2.6 (22.4
Slide 14: Exceptional Items
Exceptional Items • Costs in exiting non-core investments and Exceptional items: continuing operations simplifying structure – largely complete Continuing operations (A$ million) H1 2019 H2 2019 2019 2018 • Unbnd – mechanism to recover investment, should Redundancies (1.7) (3.1) (4.8) – it be succes
Slide 15: Cash / Debt
Cash / Debt • Net cash balance $111m & no drawn debt as at 31 A$ million Dec 2019 Jun 2019 Dec 2018 December 2019 Cash at beginning of period 128.4 128.4 18.8 • 73% of limits under debt facilities extended a further 12 Foreign exchange 0.0 0.0 0.2 months to Jan 2024 on largely unchanged pricing; rem
Slide 16: Operational Performance
Operational Performance 16
Slide 17: Radio maintaining listener strength
Radio maintaining listener strength Digital audio growth is complementary Commercial Metro Radio Audience – Cumulative Weekly Reach2 10,472 10,742 10,891 10,101 Radio has grown 22%1 in reach over the last 10 years and continues 9,956 CUMULATIVE REACH ('000s) • 8,963 9,166 9,324 9,361 9,578 9,804 to
Slide 18: Radio maintaining advertiser support
Radio maintaining advertiser support Combining with digital audio growth opportunity Share of Advertising • Metro radio market is worth $760m in 20191 CY 2010 CY 2011 CY 2012 CY 2013 CY 2014 CY 2015 CY 2016 CY 2017 CY 2018 CY 2019 • Radio secured 8.6% share of advertising in 2019 – joint Ra dio 7.0%
Slide 19: Radio talent key to ratings success
Radio talent key to ratings success • #1 Overall Share in the Commercial Metro Market • Highest Reach ever for ARN, over 5.3 million weekly metro reach with commercial radio #1 Reach Sydney Momentum #1 Share #1 Share #1 Share 25-54 #2 Share #1 Reach Melbourne #1 Share AM #1 Reach AM 1,048,000 buildi
Slide 20: Digital content and distribution expansion
Digital content and distribution expansion • ARN’s iHeartRadio offers all-in-one digital listening to radio, music and podcasts RADIO MUSIC PODCASTS • Product offerings – Ov er 305K Podcasts and 19 Million Episodes • Live Radio • Catch Up Podcasts • Music streaming Post Malone Lizzo • Podcasts Cardi
Slide 21: Digital targeting capabilities for advertisers
Digital targeting capabilities for advertisers • Investing in digital audio revenue growth strategies AGE GENDER LOCATION • Digital Audio - break-even by Q4 2020 • 18-24 / 18+ Commercial Offerings • 25-34 / 25+ • In-stream digital advertising – 54% of app usage is listening to Live Radio1 • 35-44 /
Slide 22: Trading Update
Trading Update 22
Slide 23: Trading Update
Trading Update In Radio, market trading conditions in January were consistent with H2 2019. ARN remain ahead of market with mid-single digit declines. Strong cost management is being maintained as we continue to assess market conditions. Overall cost growth limited to CPI as savings in core operatio
Slide 24: Appendices
Appendices 24
Slide 25: Reconciliation of Segment Result to Statutory Result
Reconciliation of Segment Result to Statutory Result Segment result Exceptional items Statutory result A$ million 2019 20181 2019 2018 2019 20181 Revenue before finance income 252.7 271.8 – – 252.7 271.8 Other income 6.7 7.4 0.5 – 7.2 7.4 Share of associate profits 2.5 0.5 – – 2.5 0.5 Costs (186.2)
Slide 26: Transition adjustment for adoption of AASB 16 Leases
Transition adjustment for adoption of AASB 16 Leases AASB 16 AASB 16 AASB 16 AASB 16 Result Leases Reported Leases Leases Leases without Reported A$ million Adjustment 2019 Adjustment Adjustment Adjustment adoption of 2018 Digital ARN HK Outdoor Corporate AASB 16 Investments ARN 73.3 (3.0) – – – 70.
Slide 27: H1 and H2 Performance
H1 and H2 Performance Continuing operations H1 Revenue H1 EBITDA H2 Revenue H2 EBITDA As As Pre As Local Pre A$ million 2019 reported 2019 reported AASB 16 2019 reported 2019 currency AASB 16 Australian Radio Network (1) 115.0 (4%) 37.3 0% (3%) 108.3 (7%) 36.0 (24%) (28%) HK Outdoor 13.5 (9%) 6.9 >1
Slide 28: Cash Flow – Working Capital
Cash Flow – Working Capital 2018 Continuing 2018 A$ million 2019 Operations Reported Net changes in working capital 2.5 5.8 (6.3) Deduct non-cash items, share of associates NPAT net of cash / (4.1) (2.8) (2.8) dividends from investments Recurring (1.6) 3.0 (9.1) Redundancies (4.5) (0.5) (0.5) Acquis
Slide 29: Disclaimer
Disclaimer HT&E Limited (HT&E) does not accept any liability to any person, organisation or company for any loss or damage suffered as a result of reliance on this document. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements, and are subje
Slide 30: HT&E Limited
HT&E Limited / ABN 95 008 637 643