Arn Media Limited · ASX:A1N
Arn Media — FY2020 Earnings Presentation
27 slides from Arn Media's earnings presentation, Feb 24, 2021
Slide 1: Full Year Results 2020
Full Year Results 2020 24th February 2021 1 HT&E Limited ABN 95 008 637 643
Slide 2: Reported result
Reported result • Advertising markets impacted as pandemic hit all sectors across HT&E Reported Result the advertising market A$ million 2020 2019 % change • Revenue from continuing operations down 22% (H1 down 29%, reported H2 down 14%) Revenue from continuing operations 197.3 252.7 (22%) EBITDA1 4
Slide 3: Strong performance in a year like no other
Strong performance in a year like no other Emerged a stronger business by strengthening core radio operations and building momentum into digital audio growth Strengthening broadcast radio Building momentum in digital audio +12% growth in Reaching 5.3m +14% growth in #1 Rating iHR app listening per w
Slide 4: Broadcast Radio is still booming
Broadcast Radio is still booming In a year dominated by COVID-19, the loss of advertising spend came at a time when listening to Radio is at an all-time high and audiences more engaged than ever. Record High Unprecedented Championing Human Strong Foothold In REACH AVAILABILITY CONNECTION REVENUE COL
Slide 5: Winning commercial share
Winning commercial share • Providing the most complete audio offering for listeners and advertisers • ARN outperforming the market • Talent drives both ratings success and commercial integration • Retention of revenue was key focus during COVID-19 • Maintaining value of inventory; stronger position
Slide 6: Real momentum in digital audio
Real momentum in digital audio Audience appetite for audio consumption is growing in BOTH broadcast radio and digital audio formats Growth in Consumption(1) Digital Innovation and technology stack Growth in Revenue(2) 2020 REVENUE GROWTH 1,400 1,200 REVENUE ($000s) 1,000 800 600 400 200 - JAN FEB MA
Slide 7: Financial results
Financial results 7
Slide 8: Statutory results
Statutory results 2020 2019 A$ million • Revenue down $55.4m (22%) Reported Reported Revenue before finance income 197.3 252.7 - Advertising spends significantly impacted by COVID-19 Other income 2.1 6.7 - Disposal of non-core assets contributed ~$9m decline; minimal impact on Share of associate pro
Slide 9: ARN
ARN • Widespread falls in global marketing and advertising activity, with all A$ million 2020 2019 % Change % change advertising sectors materially impacted Excl iNC and The - Radio revenue down 21% ahead of market (-25.2%) Roar - Consistent commercial share gains, not through excessive discounting
Slide 10: Soprano
Soprano A$ million LTM LTM % change • HT&E ~25% interest 2020 2019 • Continued revenue and EBITDA growth Revenue 75.6 68.2 11% • Increased gross profit margin Cost of sales (27.7) (27.6) 0% • Minor acquisition of Silverstreet (Singapore) completed in Gross profit 47.9 40.6 18% December - provides gr
Slide 11: Soprano – strong GP margins maintained
Soprano – strong GP margins maintained Core business performing very well on all financial metrics Annual Recurring Revenue (3) Gross Profit 90 60 64% Impressive financial metrics (1) 80 70 50 62% Millions 60 40 50 60% Revenues exceeded $75m (+11%) Millions 30 40 58% 30 20 20 10 56% 63% gross profit
Slide 12: Hong Kong Outdoor - Cody
Hong Kong Outdoor - Cody • Cody revenues heavily impacted by COVID-19 from commencement of Local currency the year A$ million 2020 2019 % change % change - Subsequent lockdowns stalling ad recovery Roadside 12.0 16.6 (28%) (29%) - Tram shelter revenues (Transit) worst effected, with commuter Transit
Slide 13: Corporate costs
Corporate costs • Corporate cost base ~$10m in a normal year (excluding ~$2m costs A$ million 2020 2019 % change of running ATO Branch dispute) Salary and wages 2.8 4.1 (32%) • One-off cost measures, including; 5-month salary reductions for Board and executive management Incentives provided for 0.3
Slide 14: Balance sheet
Balance sheet Reported Reported Change A$ million Dec 2020 Dec 2019 $ • Net cash position ~$112m remains very strong Cash and cash equivalents (incl deposits) 115.1 111.0 4.1 • Deposit of tax in dispute: Receivables 43.9 45.7 (1.8) • Includes $51m deposit offset by $30m tax provision – unchanged Inc
Slide 15: Cash flow
Cash flow Operating cash inflow of $50.8m (+13%), impacted by: A$ million Dec 2020 Dec 2019 EBITDA 49.3 75.6 • EBITDA down 35% Net change in working capital, non-cash and exceptional items 1.7 (7.1) • $8.8m net cash on exceptional items (mainly JobKeeper Net interest received / (paid) (3.3) (1.6) $1
Slide 16: Platform for growth in 2021
Platform for growth in 2021 16
Slide 17: Strong platform for growth in 2021
Strong platform for growth in 2021 • Confidence in the advertising market returning; radio’s relevance remains strong • High performing radio business; further growth opportunities in digital audio • Highly cash generative business • Strong balance sheet; $112m net cash • 25% shareholding in Soprano
Slide 18: Trading update
Trading update ARN Q1 revenue outlook continues to strengthen with current pacing for March indicating total revenues could finish flat on prior year. Revenue for January finished back 6.9% with pacing improving on this result for February, assisted by continued improvements in our broadcast radio p
Slide 19: Appendices
Appendices 19
Slide 20: Reconciliation of segment result to statutory result
Reconciliation of segment result to statutory result Segment result Exceptional items Statutory result A$ million 2020 2019 2020 2019 2020 2019 Revenue before finance income 197.3 252.7 – – 197.3 252.7 Other income 2.1 6.7 10.7 0.5 12.8 7.2 Share of associate profits 6.0 2.5 – – 6.0 2.5 Costs (156.0
Slide 21: H1 and H2 performance
H1 and H2 performance H1 Revenue H1 EBITDA H2 Revenue H2 EBITDA As As As As A$ million 2020 reported 2020 reported 2020 reported 2020 reported Australian Radio Network 83.1 (28%) 18.1 (52%) 92.2 (15%) 28.1 (22%) HK Outdoor 7.7 (43%) 3.5 (50%) 8.8 (23%) 4.2 (23%) Digital Investments 2.2 (6%) 2.1 >100
Slide 22: Exceptional items
Exceptional items A$ million H1 2020 H2 2020 Dec 2020 Dec 2019 Impairment – Goodwill (ARN and HK) (54.2) – (54.2) – Impairment – Right-of-use assets (HK) (7.1) – (7.1) – • H1 non-cash impairments totalling $65.7m taken in Associate impairment – Nova Perth (4.4) – (4.4) – ARN (goodwill), HK (goodwill
Slide 23: Cash flow – working capital
Cash flow – working capital A$ million 2020 2019 Net changes in working capital (0.7) 2.5 Deduct non-cash items, share of associates NPAT net of cash / (6.4) (4.1) dividends from investments Recurring (7.1) (1.6) Redundancies (1.5) (4.5) Costs associated with diposal of The Roar (0.3) – JobKeeper (a
Slide 24: AASB 16 Leases – 2020
AASB 16 Leases – 2020 AASB 16 AASB 16 AASB 16 AASB 16 Result Leases Reported Leases Leases Leases without A$ million Adjustment 2020 Adjustment Adjustment Adjustment adoption of Digital ARN HK Outdoor Corporate AASB 16 Investments ARN 46.2 (3.3) – – – 43.0 HK Outdoor 7.7 – (11.2)2 – – (3.6) Digital
Slide 25: AASB 16 Leases – 2019
AASB 16 Leases – 2019 AASB 16 AASB 16 AASB 16 AASB 16 Result Leases Reported Leases Leases Leases without A$ million Adjustment 2019 Adjustment Adjustment Adjustment adoption of Digital ARN HK Outdoor Corporate AASB 16 Investments ARN 73.3 (3.0) – – – 70.3 HK Outdoor 12.4 – (12.4) – – 0.0 Digital In
Slide 26: 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 27: HT&E Limited
HT&E Limited / ABN 95 008 637 643