Slide 1: Full Year Results 2018
Full Year Results 2018 13th February 2019 HT&E Limited ABN 95 008 637 643
Slide 2: Agenda
• Executive Summary • Executive Summary • Statutory Results • Statutory Results • Operational Performance • Operational Performance • Financial Results • Financial Results • Focusing on the future • Strategic Priorities • Trading Update • Trading Update • Q&A • Q&A • Appendices
Slide 3: Transformative year
• Transformative year • Delivering value for shareholders • Robust operating performance • Strong balance sheet • New Board: relevant media experience • Methodical and balanced approach • Simplifying structures and reducing corporate costs • ARN - highly cash generative with exceptional margins • Fo
Slide 4: Statutory results
HT&E Reported Result (excluding Adshel) • Statutory results excludes Adshel A$ million 2018 20171 % change Revenue from continuing operations1 271.8 259.9 5% • Reported revenue up 5% EBITDA2 71.8 66.9 7% EBIT2 67.2 61.2 10% • EBITDA up 7% NPAT attributable to HT&E 36.7 29.7 23% shareholders2 • EBIT
Slide 5: ARN network ratings
• Radio market grew 3.5% in 2018; 5.9% in H1; 1.3% in H2 ARN NETWORK RATINGS (10+) 20 • ARN revenue $235.5m (+3%) 16.1 15.5 16.4 16.6 15.1 15 12.7 13.2 13.2 • EBITDA $84.6m (+1%) 10 5 • Highest average ratings year ever 1 0 2011 2012 2013 2014 2015 2016 2017 2018 • New shows launched – building fami
Slide 6: iHeartRadio
iHeartRadio • Global platform – downloaded over 1bn times #1 MEDIA STREAMING AND AUDIO PLATFORM IN THE US 300 273 • #1 media streaming and audio platform in the US 250 225 207 • Long term licence arrangement 200 142 150 127 • 280+ technical staff 91 89 81 100 60 39 35 • Leaders in areas such as voic
Slide 7: Conversant Media
Conversant Media • Conversant Media fully integrated into ARN with momentum building • Users doubled in Q4 2018 • Return visitors up 83% 6 DIRECT TRAFFIC UP • Direct traffic up 33% 4.3 33% 4 • ‘The Roar’ is a dedicated content vertical delivering Australia’s 2.3 largest user-generated sports content
Slide 8: Esports Unbound
Esports Unbound • Launched inaugural Gfinity Elite Series Australia • Creative technology business in VR/AR across two seasons as the first city-based esports • Content driven strategy monetised league in the country through subscription, pay-per-view, advertising and • Strong partnerships and spons
Slide 9: Financial Results
Financial Results
Slide 10: Underlying result
• Revenue from continuing operations up $11.9m (5%) A$ million 2018 20171 Revenue before finance income1 271.8 259.9 - Strong radio and Hong Kong performance offset by soft digital display ad market in Australia Other income 7.4 7.4 Share of associate profits 0.5 1.3 • Costs increased by $6.2m mostl
Slide 11: ARN revenue growth
• ARN revenue growth: A$ million 2018 2017 % change - Revenue growth of 3% compared to market growth of 3.5% Agency 154.3 145.2 6% - H1 revenue growth 9%; H2 down 3% Direct 68.0 70.9 (4%) - Market share 24.9% (LY: 25.3%) Digital & Other 13.2 13.3 (1%) • Direct market down 2.9%; ARN down 4% Total rev
Slide 12: HK Outdoor
• Significant turnaround in performance, first profitable full year Local currency since 2015 A$ million 2018 2017 % change % change Roadside 20.7 18.7 11% 9% • Revenue growth in cross harbour tunnel and tram assets Transit * 10.1 5.3 91% 87% - Western Harbour Tunnel up 21% Buzplay - 1.1 (100%) (100
Slide 13: Corporate costs
A$ million 2018 2017 % change • Continue to pursue cost savings in Corporate Salary & wages 5.0 6.9 (28%) • Compliance and advisor costs exclude Adshel sale costs, other activity reduced compared to 2017 Group incentives provided for 3.0 1.2 147% Board costs 0.8 0.9 -18% • Tax dispute costs increasi
Slide 14: Pro forma balance sheet
Pro forma Restated / excl Reported Reported Adshel Adshel Change • Assets and liabilities relating to Adshel on the 2017 A$ million 2018 2017 2017 2017 $ balance sheet have been quarantined as Assets sold Cash and cash equivalents 128.4 18.8 (3.5) 15.3 113.0 • Key like for like balance sheet movemen
Slide 15: Cash flow
Continuing A$ million operations Adshel 2018 2017 • Cash flow includes continuing and discontinued EBITDA 71.8 33.7 105.5 118.4 operations Net change in working capital, non-cash and exceptional 2.5 (25.0) (22.4) (24.0) items (see page 17) • Operating cash inflow of $45.5m before deposit of Net inte
Slide 16: Net debt and capital management
A$ million Dec 2018 Jun 2018 Dec 2017 Gross debt - 190.0 133.6 Less: Cash (128.4) (13.5) (18.8) Net debt (128.4) 176.5 114.8 Unamortised borrowing costs (2.0) – (0.5) • Adshel proceeds of $550m (net of costs and cash transferred with the business) used to repay drawn debt, fund $222.4m special divid
Slide 17: Strategic Priorities
Strategic Priorities
Slide 18: Strategic priorities
• Simplify organisational structure • Drive core asset performance • Reduce corporate costs • No. 1 radio network in the country • ATO dispute • Expand digital capability and extend audience base • Capital Management • Create the future of Audio Entertainment
Slide 19: Commercial radio listenership
TOTAL PEOPLE TUNED INTO COMMERCIAL RADIO (10+) • AM/FM radio listenership is growing 12 9.8 m 9.9 m 10.1m 10.4m 10.7m 8.9 m 9.1m 9.3m 9.3 m 9.5 m 10 • 10.7m people tuned into commercial radio in 2018 – 8 REPRESENTATIVE OF growing 22% over the past 10 years 1 6 78% 4 METRO POPULATION • Every demograp
Slide 20: Share of audio listening
SHARE OF AUDIO LISTENING • Radio is leading audio platform consumed at 62% Other Audio TV Music Channels 1.4% Podcasts 2.7% Audio Books 3.8% • Australians spend more than 2 hours per day listening to 1.6% radio …. 4x higher than streaming • Streaming 15% • Podcasting 4% Streaming • Smartphone owners
Slide 21: ARN and iHeartRadio ideally positioned
• ARN and iHeartRadio ideally positioned to manage the transition to a digitally enabled audio business • Mass reach • Trusted talent • Frequency and efficiency of buying • All-in-one listening platform • Local content, national scale • Multi-device approach • Largest library of podcast content in A
Slide 22: Trading Update
Trading Update
Slide 23: Trading in 2019
Trading in 2019 is broadly in line with 2018 against strong comps. We are seeing improved briefing activity after a soft last four months of 2018, however remain cautious with federal and state elections during 2019. We have commenced the integration of the corporate and ARN cost bases and continue
Slide 24: Questions?
Questions?
Slide 25: Appendices
Appendices
Slide 26: Segment result
Segment result Exceptional items Statutory result A$ million 2018 20171 2018 2017 2018 20171 Revenue before finance income 271.8 259.9 – - 271.8 259.9 Other income 7.4 7.4 – - 7.4 7.4 Share of associate profits 0.5 1.3 – - 0.5 1.3 Costs (207.9) (201.6) 0.9 4.5 (207.0) (197.1) Underlying EBITDA2 71.8
Slide 27: Reported result
A$ million 2018 2017 • 2018 result to 28th September 2018 vs full year 2017. Revenue 153.3 228.1 • Depreciation and amortisation ceased on 25th June Expenses (119.6) (176.6) 2018 (date at which Adshel was classified as held for EBITDA 33.7 51.5 sale following the announcement of sale). Depreciation
Slide 28: Reported result
Reported result Amortisation – Eliminate HT&E Adshel (page 8) change format intercompany reported A$ million 20171 2017 20171 2017 20171 Revenue before finance income 259.9 – 228.1 (2.3) 485.7 Other income 7.4 – – – 7.4 Share of associate profits 1.3 – – – 1.3 Costs (201.6) – (176.6) 2.3 (375.9) Und
Slide 29: Total
Continuing operations H1 Revenue H1 EBITDA H2 Revenue H2 EBITDA Local As Local As Local As Local As A$ million 2018 currency reported 2018 currency reported 2018 currency reported 2018 currency reported Australian Radio Network (1) 119.6 9% 9% 37.2 11% 11% 115.9 (3%) (3%) 47.4 (5%) (5%) HK Outdoor 1
Slide 30: Working capital
Continuing • Working capital from continuing operations YoY A$ million operations Adshel 2018 2017 variance predominantly Hong Kong on better Net changes in working capital 5.7 (12.1) (6.3) (5.7) collections and other timing differences Deduct non-cash items, share of associates NPAT net of (2.8) (0
Slide 31: Exceptional items
Exceptional items: continuing operations Exceptional items: discontinued operations Continuing operations (A$ million) 2018 2017 Discontinued operations (A$ million) 2018 2017 Benefit from retrospective application of ACMA licence fee relief – 5.4 Reversal of compliance obligation provisions 16.1 -
Slide 32: Digital investment EBITDA breakdown
A$ million 2018 2017 Total Revenue 5.7 7.2 Total Costs (5.2) (7.3) Share of associates’ NPAT 0.5 1.3 Dividends received 0.3 – EBITDA 1.3 1.2 D&A (0.1) (0.1) EBIT 1.2 1.1 Digital investment EBITDA breakdown A$ million 2018 2017 Emotive 0.9 0.9 esports establishment costs (0.4) (0.9) Dividends receive
Slide 33: 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 subject to varia
Slide 34: HT&E Limited
HT&E Limited / ABN 95 008 637 643