Hurriyet Gazetecilik Ve Matbaacilik A.s. · BIST:HURGZ

Hurriyet Gazetecilik Ve Matbaacilik A.s — Investor Presentation (July 2008)

43 slides from Hurriyet Gazetecilik Ve Matbaacilik A.s's investor presentation, July 2008

  1. Slide 1: Investor Presentation July 2008

    Investor Presentation July 2008 1

  2. Slide 2: Notice

    Notice This presentation does not constitute an offer or invitation to purchase or subscription for any securities and no part of it shall form the basis of or be relied upon in connection with any contract or commitment whatsoever. The information contained in this document has not been independent

  3. Slide 3: Content

    Content • Corporate Overview and Business Structure …………………....4 • Financials…………………………………………………………....17 • 1Q08 Financial Review ……….…………………………………..21 • Back up slides ……………………………………………………..36 3

  4. Slide 4: Corporate Overview & Business Structure

    Corporate Overview & Business Structure 4

  5. Slide 5: Corporate Structure

    Corporate Corporate Structure Structure Doğan Yayın Holding (DYH) Major shareholder of Hurriyet. Largest Turkish media conglomerate, with core businesses of publishing and broadcasting. Total ad market share of 42%. 64.8% Listed in Istanbul Stock Exchange. Hürriyet #1 publishing & printing group in

  6. Slide 6: Business Structure

    Business Structure Publishing Printing Online (82%)* (12%)* (6%)* Hürriyet Germany * Percentage of revenues as of 1Q08. 6

  7. Slide 7: Operations in 9 countries, 300 mn population and around US$ 15 bn ad market

    Operations in 9 countries, 300 mn population and around US$ 15 bn ad market… Russia CIS & Baltics Population (mn) 142 Population (mn) 72 2007 revenue (US$m) 185 2007 revenue (US$m) 33 2007 EBITDA (US$m) 58 2007 EBITDA (US$m) 10 EBITDA Margin 31% EBITDA Margin 30% Eastern Europe* Population (mn) 16 2

  8. Slide 8: Continuously sustained high growth ad revenue: 20% CAGR growth in 5 years

    Continuously sustained high growth ad revenue: 20% CAGR growth in 5 years Ad Revenue (YTL mn) * 617 16% CAGR growth (excl. TME) 384 403 278 339 2004 2005 2006 2007 excl. TME 2007 reported Ad Revenue (YTL mn), based on DYH ad platform estimates 385 404 20% CAGR growth 343 267 189 162 2002 2003 2004 2

  9. Slide 9: Continuously sustained high growth circulation: 9% CAGR growth in 5 years

    Continuously sustained high growth circulation: 9% CAGR growth in 5 years Average Circulation in Turkey (mn) 6 0,6 5 0,5 Hürriyet (mn) 4 0,4 Total (mn) 3 0,3 2 0,2 1 0,1 0 0 2002 2003 2004 2005 2006 2007 Total Hürriyet 9

  10. Slide 10: Impressively high power ratio

    Impressively high power ratio • Hürriyet has: 10% circulation market share 40% market share in newspaper advertising; implying a power ratio of 4. • Hürriyet has a very attractive reader profile: 45% of Hürriyet readers are in the AB socio-economic status; this ratio being 36% for the closest compet

  11. Slide 11: Strong presence in internet

    Strong presence in internet Hurriyet.com, #1 newsportal in Turkey: 23 million UMV* The most visited Turkish website in Turkey Unique in the world, in the sense that a newsportal is the highest traffic website. The strongest online classified player in the region 18 leading classified websites in rea

  12. Slide 12: Strong operational performance not reflected on market capitalization

    Strong operational performance not reflected on market capitalization Mcap of Hürriyet (USD mn) 2000 Max: US$ 1,8 bn; 1800 27 Feb 2006 1600 1400 1200 1000 800 600 US$ 0,6 bn; 400 Min: US$ 0,5 bn; 24 July 2008 200 17 July 2008 0 03.01.2005 03.04.2005 03.07.2005 03.10.2005 03.01.2006 03.04.2006 03.07.

  13. Slide 13: Macroeconomic and political outlook

    Macroeconomic and political outlook A. The global financial turmoil: Adverse effects Increasing interest rates, Sharp decline in the stock exchange, Possible slowdown in economic activity. Positive aspects Turkish Lira remains strong. The decline in the stock market has negligable wealth and consump

  14. Slide 14: Outlook: Hürriyet domestic operations

    Outlook : Hürriyet domestic operations Despite all the uncertainties, ad market grew by around 10% in 1H08*. Hürriyet total ad revenues is expected to grow by 10% in 2008. Promotions slowed down significantly. The average newsprint price in 2008 is expected to be around 10% higher than 2007. Active

  15. Slide 15: Outlook: TME

    Outlook: TME Outlook •The strong revenue growth is expected to continue. The growth guidance for 2008 is set as 17%-18% in local currency and 24% in US$. • The ongoing restructuring process–especially the headquarter relocation- will result the EBITDA margin of TME to remain flat in 2008. Recent dev

  16. Slide 16: Strategy

    Strategy * Our Strategy is To increase our newspaper ad market share. To reach new readers through the subscription model. The target is to reach 30.000 subscribers. To develop our internet both organically and through acquisitions; strengthen our leading position in both classifieds and news. To co

  17. Slide 17: Financials

    Financials 17

  18. Slide 18: Income Statements

    Income Statements Hürriyet Consolidated Income Statement (mn YTL)* 2006 2007 Total Revenues 632 914 Cost of Sales 423 537 Operating Expense 122 260 Operating Profit 87 116 EBITDA 146 201 Net Profit 104 94 Hürriyet Income Statement - exc. TME (mn YTL) 2006 2007 Total Revenues 632 632 Cost of Sales 42

  19. Slide 19: Revenue & EBITDA breakdown

    Revenue & EBITDA breakdown Revenue breakdown Germany CIS CEE 5% 4% 7% Russia 21% YTL 632 mn YTL 914 mn Germany Turkey 3% 65% Turkey 2007 2006 95% EBITDA breakdown Germany CIS CEE 5% 4% 3% Russia 25% YTL 146 mn YTL 201 mn Germany Turkey 4% 64% Turkey 2007 2006 95% 19

  20. Slide 20: Balance Sheet

    Balance Sheet Hürriyet Consolidated Balance Sheet (mn YTL) 2006 2007 Assets 969 1822 Current Assets 407 443 Long Term Assets 562 1379 Liabilities 267 969 Current Liabilities 106 175 Long Term Liabilities 161 794 Minority Interests 111 Shareholders' Equity 703 743 Total Liabilities & Shareholders' Eq

  21. Slide 21: 1Q08 Financial Review

    trader, media east 1Q08 Financial Review

  22. Slide 22: 1Q08 Financial Results: Summary

    1Q08 Financial Results: Summary • Consolidated revenues increased by 61%, to YTL 226 million. Revenues (YTL mn) • Hürriyet stand-alone ad revenues increased by 9.2%. Meanwhile, total revenues remained flat due to lower 61% circulation and printing revenues. 226 • The decline in circulation revenues

  23. Slide 23: 1Q08 Consolidated IFRS Results

    1Q08 Consolidated IFRS Results (YTL mn) 1Q07 1Q08 %Ch. Total revenues 140,5 226,1 61% Ad revenues (print)(1) 77,9 148,4 91% Ad revenues (online) 4,0 12,5 215% Circulation revenues 22,8 27,6 21% Printing revenues 31,2 26,7 -14% Other revenues 4,7 11,0 132% Cost of sales -103,9 -132,5 27% Operating ex

  24. Slide 24: 1Q08 IFRS Results: Hürriyet excluding TME

    1Q08 IFRS Results: Hürriyet excluding TME (YTL mn) 1Q07 1Q08 %Ch. Total revenues 140,5 140,0 0% Ad revenues (print)(1) 77,9 83,6 7% Ad revenues (online) 4,0 5,7 45% Circulation revenues 22,8 18,7 -18% Printing revenues 31,2 26,3 -15% Other revenues 4,7 5,6 19% Cost of sales -103,9 -90,3 -13% Operati

  25. Slide 25: Turkish ad market

    Turkish ad market * Total Ad Market (YTL mn) Newspaper Advertising (YTL mn) 6.2% 10.4% 218 759 205 687 1Q07 1Q08 1Q07 1Q08 TV Advertising (YTL mn) Hürriyet Ad Growth ** (YTL mn) 7.6% 384 93 9.3% 357 85 1Q07 1Q08 1Q07 1Q08 * Ad market statistics are estimates compiled by DYH ad platform . ** Hürriyet

  26. Slide 26: Revenue growth

    Revenue growth * Total Revenue Ad Revenue (Print+online) % % 61 86 6 .6 72 9 -0.4% 9.2% 141 140 82 89 1Q07 1Q08 1Q07 1Q08 • Total revenues surged by 61%, as a result of the consolidation of TME into 1Q08 financials. • Strong growth in ad revenues in domestic markets, namely 9.2%. • Real estate, reta

  27. Slide 27: Online revenue growth

    Online revenue growth * Online revenue • Internet revenues for Hurriyet excluding TME surged by 45% and reached YTL 5,7 mn in 1Q08. 6,7 • Consolidating TME revenues as well, online 5% 21 revenues were as high as YTL 12,4 mn. This corresponds to 7,7% of total ad revenues. 4,0 45% 5,7 • Online busines

  28. Slide 28: Circulation market

    Circulation market * Hürriyet Circulation Revenues • Last year’s circulation was inflated by heavy (YTL mn) promotions. This year, with lower promotions, circulation declined to its normal level. 20.7% 9 • Following the cover price increases last year, -18% the average cover price of Hürriyet was 7%

  29. Slide 29: Cost analysis

    Cost analysis * Cash costs ** • Cash costs for Hürriyet excluding TME declined significantly, 46 % 73 as a result effective cost control mechanisms. This witnesses the success of the measures put into effect after 2Q07. -14% • The improvment on the cost side stemmed from: 123 • More effective market

  30. Slide 30: Raw material costs

    Raw material costs * Raw material costs The decline in raw material costs for 15% Hurriyet excluding TME stemmed 19 from: -25% • 3% decline in newsprint prices in 1Q08 versus 1Q07, in USD terms; 49 37 • Stronger Turkish Lira in 1Q08 vs 1Q07; • Lower circulation of Hürriyet; 1Q07 1Q08 • Close down of

  31. Slide 31: EBITDA

    EBITDA * EBITDA margin: EBITDA Hürriyet excluding TME 23,4% 23,9% 21,7% 13 9% 11 12,2% 95% 33 17 1Q07 1Q08 1Q05 1Q06 1Q07 1Q08 • Despite the fact that the first quarter is seasonally the weakest quarter of the year, the EBITDA margin was exceptionally high, especially in the domestic operations. • I

  32. Slide 32: Net Cash Position

    Net Cash Position (mn YTL) 31.12.2007 31.03.2008 Cash and Equivalents 140,0 189,7 S.T Bank Borrowings 41,4 197,9 L.T Bank Borrowings 516,7 442,9 Net Cash -418,1 -451,1 Investments 64,6 15,7 Supplier Loans 99,1 111,9 • Net debt position of YTL 451 mn includes TME’s net debt of YTL 136 mn. • US$ 54.3

  33. Slide 33: TME: Consolidated statements of operations (IFRS)

    TME: Consolidated statements of operations (IFRS) mn USD 1Q07 1Q08 Revenues 56,9 71,9 Operating costs and expenses : Cost of sales -27,4 -37,1 General and administrative -17,9 -23,1 Stock-based compensation expense 2,3 - Depreciation and amortization -1,7 -2,2 Other operating costs -4,8 -0,8 Operati

  34. Slide 34: Revenue Growth by Regions – TME standalone

    Revenue Growth by Regions – TME standalone Mn USD 1Q07 1Q08 Growth in USD terms Russia 36.7 48.5 + 32.0% Moscow 17.7 20.5 + 16.2% Other Russia 19.0 27.9 + 46.8% CIS 6.7 8.7 + 31.1% CEE 13.5 14.7 + 8.8% Total 56.9 71.9 + 26.4% Revenue Breakdown by Regions CEE Moscow CEE Moscow 24% 31% 20% 29% CIS 12%

  35. Slide 35: EBITDA by Regions – TME standalone

    EBITDA by Regions – TME standalone EBITDA margin EBITDA margin Mn USD 1Q07 1Q08 Growth 1Q07 1Q08 Russia 10.6 12.1 + 13.2% 29.0% 24.9% Moscow 7.0 7.3 + 4.0 % 39.5% 35.4% Other Russia 3.7 4.8 + 30.6% 19.3% 17.2% CIS 1.8 2.0 + 11.4% 27.6% 23.4% CEE 2.0 1.5 - 22.4% 14.7% 10.5% Operational EBITDA 14.5 15

  36. Slide 36: Back up slides

    trader, media ea Back up slides 36

  37. Slide 37: Valuation

    1,0 1,5 2,0 2,5 3,0 3,5 4,0 4,5 * as of 16.06.2008 20 40 60 80 100 120 140 24.07.2007 Valuation 24.07.2007 23.08.2007 24.08.2007 22.09.2007 Max: 4.20 24.09.2007 24.10.2007 22.10.2007 24.11.2007 21.11.2007 HURGZ 24.12.2007 21.12.2007 24.01.2008 20.01.2008 HURGZ share price 24.02.2008 19.02.2008 24.03

  38. Slide 38: Newsprint prices

    Newsprint prices Average Newsprint Costs (US$) 800 769 750 754 747 700 661 650 684 600 619 550 563 500 450 492 501 400 2000 2001 2002 2003 2004 2005 2006 2007 1Q08 * Including all costs and expenses like custom duties, transportation etc. 38

  39. Slide 39: Some ad market statistics on the region - I

    Some ad market statistics on the region - I 2003-2007 CAGR of advertising spend 36 32 30 Countries where Hurriyet & TME are present Some Western European countries Very high growth 20 in the region we are operating 10 9 5 4 4 2 But still very big potential for Ukraine Russia Turkey Croatia Hungary S

  40. Slide 40: Some ad market statistics on the region - II

    Some ad market statistics on the region - II Turkish Ad Market (YTL mn) * 6000 Ad spend (YTL mn) 0,50% Ad spend/GDP 0,42% 0,45% 5000 0,38% 0,40% 0,40% 0,35% 4000 0,31% 0,36% 3775 Adspend(YTLmn) Adspend/GDP 0,34% 0,30% 0,32% 3262 0,29% 3000 0,27% 2726 0,25% 2231 0,20% 2000 1814 0,15% 1319 1090 0,10%

  41. Slide 41: Hürriyet's major advertisers

    Hürriyet’s major advertisers Sectors 1Q07 1Q08 Classifieds (incl. HR) 18% 17% Real Estate 12% 13% Automotive 12% 11% Retail 6% 8% Finance 8% 8% Social 6% 6% Tourism 4% 4% Textile 2% 3% Entertainement, culture 4% 3% and sports Furniture & home textile 3% 2% First 10 Total 74% 77% Others 26% 23% 41

  42. Slide 42: Corporate Governance & Credit Rating

    Corporate Governance & Credit Rating Proven track record of shareholder value and corporate governance principles since 1992 Fitch rating for Hürriyet as of July 2007: Foreign Currency – BB (stable outlook) Local Currency Long term BB (stable outlook) National AA- Corporate governance rating of 8.0

  43. Slide 43: Investor Contact

    Investor Contact http://www.hurriyetcorporate.com http://www.dyh.com.tr http://www.tmeast.com e-mail: ir@hurriyet.com.tr tel: (90) 212 677 0850 43

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