Southern Cross Media Group Limited · ASX:SXL
Southern Cross Media — Investor Presentation (April 2020)
41 slides from Southern Cross Media's investor presentation, Apr 6, 2020
Slide 1: Capital Structure and Operational Initiatives
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES CAPITAL STRUCTURE AND OPERATIONAL INITIATIVES 6 APRIL 2020
Slide 2: Important Notice and Disclaimer
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES IMPORTANT NOTICE AND DISCLAIMER IMPORTANT: You must read the following before continuing. This presentation (Presentation) has been prepared by Southern Cross Media Group Limited ABN 91 116 024 536 (SCA or the Company) and is dated 6 April 2020. S
Slide 3: Important Notice and Disclaimer
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES IMPORTANT NOTICE AND DISCLAIMER Retail offer The retail component of the Entitlement Offer will be made in accordance with and on the basis of the information contained in the retail offer booklet to be prepared for eligible retail shareholders in
Slide 4: Important Notice and Disclaimer
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES IMPORTANT NOTICE AND DISCLAIMER Future performance This Presentation contains certain "forward looking statements" which involve subjective judgment and analysis and are subject to significant uncertainties, risks and contingencies including those
Slide 5: Important Notice and Disclaimer
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES IMPORTANT NOTICE AND DISCLAIMER Disclaimer The Lead Manager and the advisers to the Company listed in the accompanying ASX announcement, together with each of their respective related bodies corporate, shareholders or affiliates and each of their
Slide 6: Introduction
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES INTRODUCTION Capital Structure and Operational Initiatives to enhance financial flexibility and liquidity • SCA has implemented a series of Capital Structure and Summary of Initiatives Operating Initiatives (Initiatives) which will result in: o Re
Slide 7: Overview of Initiatives
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OVERVIEW OF INITIATIVES
Slide 8: Company Snapshot
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES COMPANY SNAPSHOT SCA – Proudly National, Fiercely Local AUDIO SALES • Largest radio group in Australia – 98 radio stations around Australia • High quality sales teams servicing large national clients as well (excluding NT) as thousands of local bu
Slide 9: Business Update
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES BUSINESS UPDATE Recent advertising markets have been challenging, however audio audiences are resilient and growing • FY20 advertising revenue for the nine months ended 31 March 2020 is trading 10% down compared to the prior corresponding period (
Slide 10: Operating Expenditure Savings
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OPERATING EXPENDITURE SAVINGS Operating expenditure savings have adjusted the cost base to reflect the current market environment • SCA has implemented cost saving measures to remove $40m – $45m of non-revenue related costs from CY201 • Headcount
Slide 11: Capital Structure Initiatives
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES CAPITAL STRUCTURE INITIATIVES SCA has launched a c.$169m1 Equity Raising and announced amendments to the Company’s syndicated debt facility and a suspension of its dividend program Equity Raising • SCA will undertake a fully underwritten2 c.$169m1
Slide 12: Equity Raising Details
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES EQUITY RAISING DETAILS • Fully underwritten1 approximately $169m Equity Raising2, comprising a: o c.$47m fully underwritten1 Institutional Placement (Placement) o c.$121m fully underwritten1 Entitlement Offer at a ratio of 1.75 New Shares for ever
Slide 13: Pro Forma Financial Profile
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES PRO FORMA FINANCIAL PROFILE Additional balance sheet strength and financial flexibility for SCA Impact of the Equity Post Equity Leverage 31 December Debt facility ($m) Raising (net Raising (Pro 2019 (Actual) Transaction costs) Forma) • $168.6m in
Slide 14: Summary Pro Forma Balance Sheet
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES SUMMARY PRO FORMA BALANCE SHEET 31 December 2019 Impact of the Equity Raising (net 31 December 2019 (Statutory) Transaction costs) (Pro Forma) Cash and cash equivalents 22.5 161.4 183.9 Receivables 134.6 - 134.6 Other assets 15.1 2.1 17.2 Property
Slide 15: Equity Raising Timetable
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES EQUITY RAISING TIMETABLE Event Indicative Date1 Equity Raising announcement and Placement and Institutional Entitlement Offer opens Monday, 6 April Placement and Institutional Entitlement Offer closes Monday, 6 April Trading in SCA shares resumes
Slide 16: Company Fundamentals
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES COMPANY FUNDAMENTALS
Slide 17: Audio – Radio Audiences
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES AUDIO – RADIO AUDIENCES Radio remains a healthy platform – cumulative audiences grow while Time Spent Listening (TSL) remains stable. SCA’s audio assets are well positioned to benefit from recovery in advertising markets National CUME AND TSL P 10
Slide 18: Digital and On Demand Audio
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES DIGITAL AND ON DEMAND AUDIO Consumption and distribution of digital and on demand audio is expanding – SCA is at the forefront • PodcastOne Australia o Commercial podcast network currently with 71 Australian creators publishing over 7,000 original
Slide 19: Television - Progressive Transformation
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES TELEVISION - PROGRESSIVE TRANSFORMATION Progressive actions over last 4 years to improve Television asset – with valuable content, enhanced sales capability and simplified business processes Affiliation Rebranding Sale of Sale of NNSW Transmission
Slide 20: Strategic Focus – Front of House
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES STRATEGIC FOCUS – “FRONT OF HOUSE” “Front of House” - SCA Investment Focus “Back of House” outsourced functions Playout Distribution Transmission TV: NPC Media Telstra DVN network BAI Communications Radio: SCA Hub (+ Optus Satellite) Audio Content
Slide 21: Key Risks
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES KEY RISKS
Slide 22: Key Risks
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES KEY RISKS INTRODUCTION This section describes the key business risks of investing in SCA together with the risks relating to participation in the Offer which may affect the value of SCA shares. It does not describe all the risks of an investment.
Slide 23: Key Risks (cont.)
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES KEY RISKS (CONT.) SCA has both a company wide Business Continuity Plan (BCP) as well as a BCP for each of its offices across Australia that is currently activated in many cases particularly for employees working from home. Although the Group is ne
Slide 24: Key Risks (cont.)
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES KEY RISKS (CONT.) 1.5 Adapting to change Performance will be dependent on SCA's continued ability to adapt to changes in the media landscape, including meeting evolving consumer listening and viewing habits, customer advertising requirements, comp
Slide 25: Key Risks (cont.)
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES KEY RISKS (CONT.) 1.7 Competition The Group operates in a highly competitive industry. The actions of an existing competitor or the entry of new competitors in an industry segment in which the Group operates, or in other parts of the media sector,
Slide 26: Key Risks (cont.)
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES KEY RISKS (CONT.) 1.10 Employee recruitment and retention Employee retention and succession planning is critical to the Group's delivery of its strategy and competitive success. Failure to appropriately recruit and retain employees may adversely a
Slide 27: Key Risks (cont.)
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES KEY RISKS (CONT.) 1.13 Changes in technology Technology plays an increasingly important role in the delivery of media content to customers in a cost-effective manner as the media industry is characterised by changing technology, evolving industry
Slide 28: Key Risks (cont.)
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES KEY RISKS (CONT.) 1.16 Risks associated with acquisitions and disposals The Group's long-term business strategy includes pursuing acquisitions. There can be no assurance that the Group will identify suitable acquisition or divestment opportunities
Slide 29: Key Risks (cont.)
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES KEY RISKS (CONT.) The Group may also become subject to investigation by or action from regulators including ACMA, ASIC, ASX or the ACCC which could have a material adverse effect on the reputation, operations or profitability of SCA. 1.21 Safety a
Slide 30: Key Risks (cont.)
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES KEY RISKS (CONT.) 1.25 Risk that investors are deemed to be BSA Controllers of companies holding licences under the BSA2 This risk only applies to persons (Relevant Persons) who are in a position to exercise BSA Control of the Company under the BS
Slide 31: Key Risks (cont.)
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES KEY RISKS (CONT.) c) the S&P/ASX 200 Index stands at a level that is 90% or less of the level of the index as at the close of trading on the day before the date of this Presentation: • at any time on or before the closing date for the Institutiona
Slide 32: Key Risks (cont.)
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES KEY RISKS (CONT.) n) there is introduced, or there is a public announcement of a proposal to introduce, into the Parliament of Australia or any State or Territory of Australia a new law, or the Reserve Bank of Australia, or any Commonwealth or Sta
Slide 33: Key Risks (cont.)
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES KEY RISKS (CONT.) and has consulted with the Company in relation to the effect of the relevant event if and to the extent practicable having regard to the circumstances. For the purposes of the Underwriting Agreement, the effect of any matter, fac
Slide 34: Key Risks (cont.)
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES KEY RISKS (CONT.) 2.5 Economic risk General economic conditions may negatively affect the Company’s performance and the performance of the Company’s shares. Any protracted slow down in economic conditions or factors such as movements in inflation
Slide 35: Key Risks (cont.)
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES KEY RISKS (CONT.) 2.10 Risks associated with an investment in shares As with all stock market investments, there are risks associated with an investment in SCA. Securities listed on the ASX have experienced extreme price and volume fluctuations th
Slide 36: Selling Restrictions
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES SELLING RESTRICTIONS
Slide 37: Selling Restrictions
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES SELLING RESTRICTIONS This document does not constitute an offer of new ordinary shares ("New Shares") of the Company in any jurisdiction in which it would be unlawful. In particular, this document may not be distributed to any person, and the New
Slide 38: Selling Restrictions
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES SELLING RESTRICTIONS The following is a summary of the statutory rights of rescission or to damages, or both, available to purchasers in Ontario. In Ontario, every purchaser of the New Shares purchased pursuant to this document (other than (a) a "
Slide 39: Selling Restrictions
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES SELLING RESTRICTIONS No advertisement, invitation or document relating to the New Shares has been or will be issued, or has been or will be in the possession of any person for the purpose of issue, in Hong Kong or elsewhere that is directed at, or
Slide 40: Selling Restrictions
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES SELLING RESTRICTIONS Norway This document has not been approved by, or registered with, any Norwegian securities regulator under the Norwegian Securities Trading Act of 29 June 2007. Accordingly, this document shall not be deemed to constitute an
Slide 41: Selling Restrictions
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES SELLING RESTRICTIONS United Arab Emirates Neither this document nor the New Shares have been approved or passed on in any way by the Emirates Securities and Commodities Authority ("ESCA") or any other governmental authority in the United Arab Emir
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