Sky Network Television Ltd · NZX:SKT
Sky Network Television — H1 FY2013 Earnings Presentation
43 slides from Sky Network Television's earnings presentation, February 2013
Slide 1: Sky Network Television Limited Interim Results
DECEMBER 2012 SKY NETWORK TELEVISION LIMITED INTERIM RESULTS
Slide 2: UHF, Satellite, Wholesale Satellite, MY SKY
UHF Satellite Wholesale Satellite MY SKY
Slide 3: NZ GDP
NZ GDP 8.00% 7.00% 6.00% 5.00% 4.00% 3.00% 2.00% 1.00% 0.00% -1.00% -2.00% Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sept Dec 08 08 08 09 09 09 09 10 10 10 10 11 11 11 11 12 12 12 12 Qtr Qtr Qtr Qtr Qtr Qtr Qtr Qtr Qtr Qtr Qtr Qtr Qtr Qtr Qtr Qtr Qtr Qtr Qtr Source: Statist
Slide 4: Net Gain by Month
NET GAIN BY MONTH Thousands 25 20 15 10 5 0 Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun 2008 2009 2010 2011 2012 2013
Slide 5: Propensity to Subscribe
PROPENSITY TO SUBSCRIBE 7 Interest in subscribing to SKY 6 How interested are you in subscribing to SKY TV? 5 base = non-subscribers 4 3 Strong 2 1 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Slide 6: Subscribers by Category
Dec 2012 Dec 2011 % Change DBS (Satellite) Residential 264.8 358.8 (26.2%) DBS Wholesale 130.2 127.3 2.3% DBS MY SKY 424.0 331.0 28.1% Commercial 28.0 29.1 (0.3%) TOTAL SUBSCRIBERS 847.0 846.2 0.01%
Slide 7: Moving Annual Churn
z ce =) = rz) mal a =) 2 2 4 ) 2 > } = 32% 30% 28% 26% 24% 22% 20% 18% 16% 14% 12% 10% Dec-12 Dec-11 Dec-10 Dec-09 Dec-08 Dec-07 Dec-06 Dec-05 Dec-04 Dec-03 Dec-02 Dec-01 Dec-00 Dec-99 Dec-98
Slide 8: Churn by Month
1.30% 1.10% 0.90% 0.70% 0.50% CHURN BY MONTH Jul Aug Sep ——2011 —#-2012 —*—2013 Oct Nov Dec Jan Feb Mar Apr May Jun
Slide 9: Monthly Churn by Device
MONTHLY CHURN BY DEVICE 2.00% 1.50% 1.00% 0.50% Jul Aug Sep Oct Nov Dec Jan Feb SKY MY SKY
Slide 10: Sky Premium Products
Millions N N nh NO & a a a 2.5 2.45 2.4 2.35 2.3 2.25 2.2 SKY PREMIUM PRODUCTS 2011 —_ SoHo (ty-s0 fo) MULTEROOM HD Access Ticket 2012
Slide 11: Total ARPU
TOTAL ARPU $75.78 $71.81 $69.45 $67.35 $63.49 $61.96 Dec 07 Dec 08 Dec 09 Dec 10 Dec 11 Dec 12
Slide 12: Total MY SKY ARPU
TOTAL MY SKY ARPU 87.39 $83.89 85.16 84.71 1. ' Dec 08 Dec 09 Dec 10 Dec 11 Dec 12
Slide 13: Total Revenue
TOTAL REVENUE hike 2007 2008 2009 2010 2011 2012 First 1/2 2013
Slide 14: Program Costs % Revenue
PROGRAM COSTS % REVENUE 2007 2008 2009 2010 2011 2012 First half 2013
Slide 15: Hawkes Bay
HAWKES BAY 2.90% 2.80% @ New Zealand ™ Hawkes Bay Region 0.10% Dec-12 Year Ending June 12 soins, CO.NZ
Slide 16: Total Television Advertising Market
TOTAL TELEVISION ADVERTISING MARKET 11% 8% 4% 4% 5% 4% 3% Quartlery Ad sales 2% 1% 1% -2% -1% -4% -3% -3% -7% -10% -16% -18% Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sept Dec 08 Qtr 08 Qtr 08 Qtr 09 Qtr 09 Qtr 09 Qtr 09 Qtr 10 Qtr 10 Qtr 10 Qtr 10 Qtr 11 Qtr 11 Qtr 11 Qtr
Slide 17: Advertising Revenue
ADVERTISING REVENUE 2008 2009 2010 2011 2012 First 1/2 2013
Slide 18: EBITDA
EBITDA TL 2007 2008 2009 2010 2011 2012 First 1/2 2013
Slide 19: Net Profit
NET PROFIT TLE Year End 30 June
Slide 20: Interim Results Summary
INTERIM RESULTS SUMMARY % Change $NZ Million 2012 2011 Revenue 443.3 426.9 3.8% Operating Expenses 266.2 256.7 (3.7%) EBITDA 177.2 170.2 4.1% Depn & Amort 67.6 66.2 (2.2%) EBIT 109.5 104.0 5.3% Interest 15.9 15.9 (0.2)% Tax 26.3 25.4 (3.5%) Net Profit after Tax 67.4 62.7 7.5%
Slide 21: Revenue Analysis
REVENUE ANALYSIS $ NZ million % Change 2012 2011 Residential Satellite subscriptions 363.3 339.6 7.0% Other subscriptions 31.0 30.2 2.6% Installation 4.7 7.8 (39.7)% Advertising 35.3 39.0 (9.5)% Other Income 9.0 10.3 (12.6)% Total Revenue 443.3 426.9 3.8%
Slide 22: Expense Analysis
EXPENSE ANALYSIS % Change 2012 2011 $ NZ million Programme rights 118.0 107.4 (9.9%) Programme operations 33.2 28.6 (16.0%) Subscriber management 30.9 31.3 1.5% Sales and marketing 16.5 23.5 30.1% Advertising 10.7 11.1 3.8% Broadcasting and infrastructure 43.6 42.5 (2.7%) Depreciation and amortisati
Slide 23: Capital Expenditure Analysis
CAPITAL EXPENDITURE ANALYSIS $ NZ million % Change 2012 2011 Install 20.8 26.0 20.3% Decoders 12.8 28.3 54.8% Building Improvements 0.2 0.9 77.8% OSB Truck 0 2.5 100% Igloo 2.0 4.8 58.3% Other 7.0 7.0 0% Total Capital Expenditure 42.8 69.5 30.9%
Slide 24: Operating Cashflow
OPERATING CASHFLOW % Change $ NZ million 2012 2011 Operating Cashflow 150.8 140.7 7.2% Capex (43.0) (70.0) (38.6%) Net Debt drawn 90 100 22.9% Dividends paid (174.0) (141.6) 22.9% Capital introduced 0 12.3 100% Other (2.2) (2.5) 13.6% Net Cash Movement 21.6 38.9 (46%)
Slide 25: Churn and Subscribers by Product
Dec 12 Dec 11 % Churn 10.9% 10.4% Subscribers 408,034 313,711 % Multiroom 30% 31% % HD Access Ticket 16% 18% % Upfront 6% 7%
Slide 26: Funding Profile
FUNDING PROFILE FACILITY DRAWN MARGIN MATURITY Bank Debt $400m $348m 180bp Jul 2017 Bond $200m $200m 65bp Oct 2016
Slide 27: Foreign Currency Hedging
FOREIGN CURRENCY HEDGING For USD exposures 98% hedged for 6 months to 30 June 2013 @ 0.7492 75% hedged for June 2014 year @ 0.7751 10% hedged for June 2015 year @ 0.7861 For AUD exposures 92% hedged for 6 months to 30 June 2013 @ 0.7848 46% hedged for June 2014 year @ 0.7900 Average $US payment rate
Slide 28: Interim Dividend
INTERIM DIVIDEND The Board has declared a fully imputed interim dividend of 12.0 cps ($46.7m) to be paid and a supplementary dividend of 2.1176 to be paid to non-residents. Record date is 8 March 2013. Payment date is 15 March 2013. 2012 2011 2010 2009 2008 Interim 11.0 8.0 7.0 7.0 7.0 Final 11.0 10
Slide 29: SKY Highlights
SKY HIGHLIGHTS iSKY OLYMPICS IGLOO PRIME FAST 5 FACE TV THE SHOPPING CHANNEL 1 OoaqapooN >
Slide 30: iSKY
Slide 31: Olympics
Slide 32: Igloo Has Launched
IGLOO HAS LAUNCHED AND WE'RE OVER THE MOON!
Slide 33: Prime
Slide 34: Netball World Series
NETBALL WORLD SERIES AUCKLAND NZ 2012
Slide 35: FACE Television
Slide 36: The Shopping Channel
The Shopping Channelis inint
Slide 37: SKY Open Issues
SKY OPEN ISSUES NRL CHRISTCHURCH APPEAL IP DELIVERY GUIDANCE COMMERCE COMMISSION oe eee
Slide 38: NRL
Slide 39: News Corporation
ss News Corporation
Slide 40: On Demand
» 4 On Demand Movies All The Bourne Legacy im) An original story that introduces us to a new hero whose life-or-death stakes have been triggered by the events of the first three films. Scott Pilgrim vs the World (M) SKY Movies 2 The Lord of the Rings: The Return of the King (M) SKY Movies Greats © M
Slide 41: Commerce Commission
(c* COMMERCE COMMISSION BZ NEW ZEALAND
Slide 42: FY13 Guidance
FY13 GUIDANCE Analysts have the following mean forecasts for SKY : Analysts SKY SKY MEAN ($m) Guidance ($m) Previous EBITDA 336 340 – 345 335 - 340 NPAT 123 125 – 130 120 – 125 Capex 130 90 – 100 130 - 140
Slide 43: Interim Results
DECEMBER 2012 SKY NETWORK TELEVISION LIMITED INTERIM RESULTS
Sky Network Television — H1 FY2013 Earnings Presentation on 6ix