Nine Entertainment Co. Holdings Limited · ASX:NEC
Nine Entertainment — H1 FY18 Earnings Presentation
24 slides from Nine Entertainment's earnings presentation, Feb 22, 2018
Slide 1: FY18 Results Briefing
Cx) e sssNine H|] FYI8 RESULTS BRIEFING 22 FEBRUARY 2018 HUGH MARKS CHIEF EXECUTIVE OFFICER GREG BARNES CHIEF FINANCIAL OFFICER MICHAEL STEPHENSON CHIEF SALES OFFICER
Slide 2: Important Notice and Disclaimer
Important Notice and Disclaimer Forward looking statements can generally be identified by or other forecast. Nothing contained in this presentation This document is a presentation of general background the use of forward looking words such as, ‘expect’, nor any information made available to you is,
Slide 3: Hugh Marks Chief Executive Officer
33Nine HUGH MARKS CHIEF EXECUTIVE OFFICER BLUE PLANET SAIN) ELE eZ
Slide 4: Greg Barnes Chief Financial Officer
= \ - Ee) - : #Nine GREG BARNES CHIEF FINANCIAL OFFICER ane’ = BLUE PLANET / \\ SAIN) ELE eZ
Slide 5: Momentum Across All Assets
MOMENTUM ACROSS ALL ASSETS GROUP GROUP EBITDA DPS NET DEBT REVENUE +51% 5.0 CPS $46M +9% TO $181M $M H1 FY18 H1 FY17 VARIANCE REVENUE 1 719.6 659.2 +9% GROUP EBITDA1 181.3 119.7 +51% EBIT 1 163.3 101.4 +61% NPAT 1 116.2 75.0 +55% STATUTORY NET PROFIT/(LOSS) 174.1 (236.9) NA BASIC EARNINGS PER SHARE
Slide 6: TV Results Underpinned By Strong Ratings
T V R E S U L T S U N D E R P I N N E D B Y S T R O N G R AT I N G S METRO FTA NINE’S SHARE 32% FTA COSTS MARKET 40.0%1 GROWTH IN -1% +1.4%1 (+5% PTS) PREMIUM REVS $M H1 FY18 H1 FY17 VARIANCE REVENUE PREMIUM AD REVENUE 105.2 79.8 +32% OTHER2 531.0 498.4 +7% TOTAL REV 636.2 578.2 +10% TOTAL COSTS 464
Slide 7: Digital Growth Driven By Video
D I G I TA L G R O W T H D R I V E N B Y V I D E O DIGITAL 9NOW STREAMS 9NOW REVENUE PUBLISHING DIGITAL COSTS +80% +86% REVENUE +1% +6% $M H1 FY18 H1 FY17 VARIANCE REVENUE 9NOW 18.2 9.8 +86% DIGITAL PUBLISHING 65.2 61.4 +6% OTHER1 0 7.1 - TOTAL REV 83.4 78.3 +7% TOTAL COSTS 65.1 64.5 +1% TOTAL EBITD
Slide 8: Maintaining Growth Trajectory
M A I N TA I N I N G G R O W T H T R A J E C T O RY SUBSCRIPTION OPERATING ACTIVE SUBS REVENUE COSTS ~930K +83% +29% H1FY18 VS H1FY17 H1FY18 VS H1FY17 • Approximately 930,000 active subscribers after seasonally strong summer period • July-August price rise increased the ARPU by more than 30% across
Slide 9: Strong Cash Flow
S T R O N G C A S H F L O W O N I M P R O V E D W O R K I N G C A P I TA L $M H1 FY18 H1 FY17 EBITDA 180.9 119.5 WORKING CAPITAL (0.7) (23.8) ASSOCIATES 0.5 0.7 OPERATING CASH FLOW, PRE SPECIFIC ITEMS, TAX AND INTEREST 180.7 96.4 CASH IMPACT OF WARNER ONEROUS PROVISION (33.0) (28.8) OTHER SPECIFIC I
Slide 10: Michael Stephenson Chief Revenue Officer
3Nine MICHAEL STEPHENSON CHIEF REVENUE OFFICER SAAN) ELE 2H
Slide 11: Strong Ratings And Revenue Momentum
S T R O N G R AT I N G S A N D R E V E N U E M O M E N T U M #1 #1 #1 #1 IN EVERY KEY FTA AD REV IN EVERY KEY FTA AD REV BUYING DEMO1 SHARE +5PTS BUYING DEMO1 SHARE +3PTS 40.0%2 38.3%2 DEC HALF DEC HALF CALENDAR YR 2017 CALENDAR YR 2017 3 50% 45% 40% 35% 30% 25% 20% Jan Feb Mar Apr May Jun Jul Aug S
Slide 12: 32% Growth In Premium Revenue
32% GROWTH IN PREMIUM REVENUE 140 $m 120 100 16% SPORT 80 60 40 20 87% E N T E R TA I N M E N T 0 H1 2017 H1 2018 12 Half Year Results Feb 2018 Source: 6 m ont hs t o Decem ber, F orm at I nt egrat i on Rev enue (broadcast and di gi t al )
Slide 13: Aggregating Premium Audience
A G G R E G AT I N G P R E M I U M A U D I E N C E 1 Audience 2,500,000 2,000,000 16% 1,500,000 35% 17% 24% 1,000,000 500,000 0 Married At First Sight The Voice Australian Ninja Warrior The Block Overnight Time shift to 28 day Encore 9Now 13 Half Year Results Feb 2018 Ref er t o gl ossary i n Append
Slide 14: Hugh Marks Chief Executive Officer
33Nine HUGH MARKS CHIEF EXECUTIVE OFFICER BLUE PLANET SAIN) ELE eZ
Slide 15: The Way We Operate Is Changing
T H E W AY W E O P E R AT E I S C H A N G I N G Content PREMIUM, LOCAL, ALL RIGHTS, FULLY INTEGRATABLE Distribution Monetisation P R E M I U M C O N T E N T B V O D I N T E G R A T E D Y O U T U B E P A R T N E R N A T I V E P A R T N E R S H I P R E V E N U E P A R T N E R S H I P R E V E N U E R E
Slide 16: Investing In The Future
INVESTING IN THE FUTURE • Migration to local content • 5.0m registered users • ~930k active subscribers • Aim to efficiently extend and market content beyond Free • Increasing rights acquired • 86% revenue growth • 83% revenue growth To Air TV • Rebalance of cost base • Opportunity to increase • App
Slide 17: Current Trading Outlook For FY18
CURRENT TRADING • NINE’S METRO FTA REVENUES ARE TRADING ~7% AHEAD OF SAME TIME LAST YEAR • CORE DIGITAL REVENUES 1 ARE PACING ~15% AHEAD FOR THE SAME PERIOD OUTLOOK FOR FY18 • Metro market growth of 1-2% for FY18 TELEVISION • Share of at least 38.5% • Growth in 9Now and Digital Publishing to offset
Slide 18: Australia's Leading FTA
Australia’s leading FTA Unique mix of leading local Diverse portfolio of leading Television content network in the key advertising and subscription digital platforms across production and distribution advertiser demographics based on demand television News, Sport, Entertainment services and Lifestyl
Slide 19: Appendices
APPENDICES SAAS) ZL 2H
Slide 20: Appendix 1: Specific Items
APPENDIX 1: SPECIFIC ITEMS REPORTED $M H1 FY18 PROFIT ON DISPOSAL OF WILLOUGHBY SITE 78.2 RESTRUCTURING COSTS (3.2) DERIVATIVE REVALUATION (12.9) OTHER - TOTAL SPECIFIC ITEMS BEFORE TAX 62.1 TOTAL TAX RELATING TO SPECIFIC ITEMS (4.2) NET SPECIFIC ITEMS AFTER TAX 57.9 20 Half Year Results Feb 2018 Re
Slide 21: Appendix 2: NRL Contracted Costs
APPENDIX 2: NRL CONTRACTED COSTS $M FY17 FY18 FY19 FY20 FY21 FY22 FY23 SEASONS 2013-2107 CASH COSTS (50.3) (6.0) P&L COSTS (91.6) (47.3) FOXTEL SIMULCAST 20.0 9.0 REVENUE SEASONS 2018-2022 CASH COSTS (50.0) (63.8) (96.3) (111.2) (107.5) (116.2) (30.0) P & L COSTS (47.5) (102.5) (117.5) (120.0) (122.
Slide 22: Appendix 3: Debt
A P P E N D I X 3 : D E B T & L E V E R A G E C A L C U L AT I O N S ACTUAL ACTUAL ACTUAL ACTUAL $M 31 DEC 2017 30 JUN 2017 31 DEC 2016 30 JUN 2016 INTEREST BEARING LOANS AND 144.1 291.2 300.8 220.5 BORROWINGS LESS: CASH AND CASH 97.8 66.7 123.3 42.9 EQUIVALENTS NET DEBT/(CASH) 46.2 224.5 177.5 177.
Slide 23: Appendix 4: Glossary
ARPU – Average Revenue Per User Premium Revenue – premium revenue includes branded BVOD – Broadcast Video on Demand content, product and brand integration, the use of IP, EBITDA – Earnings before interest, tax, depreciation and talent and social, primarily linked to key entertainment amortisation ,
Slide 24: Nine
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Nine Entertainment Co. Holdings — H1 FY18 Earnings Presentation on 6ix