Southern Cross Media Group Limited · ASX:SXL
Southern Cross Media — Southern Cross Austereo — H1 FY14 Earnings Presentation
29 slides from Southern Cross Media's earnings presentation, Feb 19, 2014
Slide 1: H1 FY14 Results Presentation
H1 FY14 RESULTS For personal use only PRESENTATION SOUTHERN CROSS AUSTEREO
Slide 2: Headline Achievements
HEADLINE ACHIEVEMENTS For personal use only • Reported revenues up 1.3%, underlying revenues up 1.8% • Reported EBITDA up 0.8%, underlying EBITDA up 0.5% • Reported NPAT up 1.8% to $45.9m, underlying NPAT up 1.1% • EPS stable at 6.5 cps – Dividend declared of 4.5 cents per share • #1 FM Metro Radio
Slide 3: Headline Achievements
HEADLINE ACHIEVEMENTS For personal use only • #1 FM breakfast shows in Melbourne, Sydney, Gold Coast and Perth1 • With over 900,000 listeners, Fox FM Melbourne remains Australia’s most listened to station2 • Triple M continues to dominate as #1 network for males 25-542 • #1 regional stations in Newc
Slide 4: Headline Achievements: Online, Social Media & Digital
HEADLINE ACHIEVEMENTS For personal use only Online, Social Media & Digital • SCA’s Facebook community is the most socially engaged audience in Australia1 – 4 of the top 10 most engaging Facebook pages in Australia1 – 8 of the top 10 most engaging Radio Facebook pages in Australia1 • With over 5.7m f
Slide 5: Headline Achievements
HEADLINE ACHIEVEMENTS For personal use only • Songl has over 115,000 registrations since April 2013, and 18m+ songs streamed • Launched two new Digital radio stations; Triple M Perth & Triple M Classic Rock • 21% YoY growth in DAB + listeners1 • Omny startup investment announced 1 Source: Nielsen Ra
Slide 6: Financials
For personal use only SOUTHERN CROSS AUSTEREO FINANCIALS
Slide 7: Group Reported Statutory Results
GROUP REPORTED STATUTORY RESULTS KEY FINANCIAL NUMBERS For personal use only $ millions H1 FY14 H1 FY13 % Variance Revenue 331.9 327.7 1.3% Expenses (226.8) (223.2) 1.6% Equity Accounted Profit (0.1) (0.3) (66.7%) EBITDA 105.0 104.2 0.8% Depreciation & (13.7) (12.9) 6.2% Amortisation EBIT 91.3 91.3
Slide 8: Group Underlying Results Analysis
GROUP UNDERLYING RESULTS ANALYSIS RECONCILIATION TO UNDERLYING RESULTS FOR H1 FY14 For personal use only $ millions Reported Adjustments Underlying Underlying % Variance H1 FY14 H1 FY14 H1 FY14 H1 FY131 Revenue 331.9 - 331.9 326.0 1.8% Expenses (226.8) 1.9 (224.9) (219.3) 2.6% Equity Accounted Profi
Slide 9: Group Underlying Results Comparative
GROUP UNDERLYING RESULTS COMPARATIVE For personal use only $ millions H1 FY14 H1 FY13 % Variance Total TV 112.4 111.3 1.0% Total Radio 219.5 214.7 2.2% Total Revenue 331.9 326.0 1.8% Broadcast & Production (54.6) (54.3) 0.6% Employee (85.8) (86.1) (0.3%) Selling, General & Admin (84.5) (78.9) 7.1% E
Slide 10: Metro Underlying Results Comparative
METRO UNDERLYING RESULTS COMPARATIVE For personal use only $ millions H1 FY14 H1 FY131 % Variance Radio 136.6 134.5 1.6% Total Revenue 136.6 134.5 1.6% Broadcast & Production (10.8) (11.8) (8.5%) Employee (40.1) (39.3) 2.0% Selling, General & Admin (43.4) (37.9) 14.5% Expenses (94.3) (89.0) 6.0% EBI
Slide 11: Regional Group Underlying Results Comparative
REGIONAL GROUP UNDERLYING RESULTS COMPARATIVE For personal use only $ millions H1 FY14 H1 FY131 % Variance Total TV 112.4 111.3 1.0% Total Radio 82.9 80.2 3.4% Total Revenue 195.3 191.5 2.0% Broadcast & Production (43.8) (42.5) 3.1% Employee (45.7) (46.8) (2.4%) Selling, General & Admin (41.1) (41.0
Slide 12: Revenue Analysis
REVENUE ANALYSIS Total Revenue by Channel ($ m’s) For personal use only 358.9 323.8 331.9 81.9 82.9 Regional radio up 3.4% 80.2 133.8 • Strong performance from both National 111.3 112.4 and Local sales 143.2 132.3 136.6 TV revenue up 1% • Improvement in National Sales H1 FY12 Regional Radio H1 FY13
Slide 13: Advertising Revenue Analysis
ADVERTISING REVENUE ANALYSIS For personal use only H1 FY14 H1 FY13 H1 FY12 National Revenues $166.0m National Revenues $161.1m National Revenues $188.3m National - Metro Radio 22.1 20.9 21.1 National - TV 93.3 86.3 84.0 57.6 56.2 73.9 National - Regional Radio Local Revenues $132.1m Local Revenues $
Slide 14: SC10 – TV Share Analysis
SC10 – TV SHARE ANALYSIS For personal use only 26.0% 25.3% 24.6% 23.4% 23.4% 23.7% 23.2% 21.7% 21.5% 19.8% 19.5% 20.1% 19.3% 19.6% H1 FY11 H2 FY11 H1 FY12 H2 FY12 H1 FY13 H2 FY13 H1 FY14 Commercial Share Audience Share Gap between audience and commercial share has improved due to • Local sales effor
Slide 15: Metro Radio Commercial Share
METRO RADIO COMMERCIAL SHARE For personal use only 180 180 179 182 180 174 175 174 176 173 167 155 154 156 37.7% 38.7% 38.5% 38.0% 37.1% 37.0% 36.6% 35.5% 34.6% 34.2% 33.3% 35.3% 34.6% 34.3% Q1 FY11 Q2 FY11 Q3 FY11 Q4 FY11 Q1 FY12 Q2 FY12 Q3 FY12 Q4 FY12 Q1 FY13 Q2 FY13 Q3 FY13 Q4 FY13 Q1 FY14 Q2 FY
Slide 16: Debt Facilities
DEBT FACILITIES For personal use only $ millions December 2013 June 2013 Drawn Debt 693.0 703.0 Less Cash (93.0) (102.9) Net Debt (Group) 600.0 600.1 Net Debt (Borrowing Group) 606.2 606.5 January 2014 Refinance • Fully drawn, 5 year, $650m facility • Undrawn, 2 year, $50m ancillary facility • Reduc
Slide 17: Debt Facility Covenants
DEBT FACILITY COVENANTS For personal use only Leverage Ratio Interest Cover 4.83 4.63 4.13 4.25 4.0 4.08 3.6 3.6 3.6 3.6 3.6 3.5 3.25 2.96 3.15 2.86 2.90 2.90 2.90 2.90 2.90 3.00 2.75 2.67 2.66 2.62 June 2011 Dec 2011 June 2012 Dec 2012 June 2013 Dec 2013 Jan 2014 June 2011 Dec 2011 June 2012 Dec 20
Slide 18: Cash Flow
CASH FLOW For personal use only $ millions H1 FY14 H1 FY13 Opening Cash 102.9 97.2 Cash from operations (pre tax) 98.6 95.9 Proceeds from sale of Land & Building - 1.7 Interest, Derivative & Borrowing Cost payments (27.3) (29.9) Tax (23.8) (29.2) Capital Expenditure (15.6) (9.7) Dividends to Securit
Slide 19: EPS Analysis
EPS ANALYSIS For personal use only Cents per share H1 FY14 H1 FY13 Underlying Operations 6.7 6.7 One off Adjustments (0.2) (0.4) Sunshine Coast1 - 0.1 Reported 6.5 6.4 Weighted average # of Shares (m’s) 705.0 704.8 Actual closing # of Shares (m’s) 705.0 704.8 1Prior year underlying EPS has been adju
Slide 20: Operational Update
For personal use only SOUTHERN CROSS AUSTEREO OPERATIONAL UPDATE
Slide 21: Trading Commentary: Revenue
TRADING COMMENTARY For personal use only Revenue up 1.8% with growth across all three mediums • Strong first quarter has driven half year revenue growth • Big Bash has renewed interest in CH10 programming and improved sales performance, particularly local sales • Metro radio revenues have grown with
Slide 22: Trading Commentary: Expense Management
TRADING COMMENTARY For personal use only Expense management remains a focus • Efficiency projects continue to deliver savings and offset increased investment in content and marketing • Increased affiliation fees are the largest single component of total cost increases • Metro radio markets remain co
Slide 23: Trading Commentary: Content & Digital Innovation
TRADING COMMENTARY For personal use only Content & Digital Innovation • Partnered with Shazam to produce the first ever ‘Shazam-able’ radio campaign in Australia • Partnered with Twitter to produce the first ‘Twitter Amplify’ campaign in Australia • Secured investment and content partnership with Me
Slide 24: Outlook: Advertising Markets and Metro Radio
OUTLOOK For personal use only Advertising Markets • Regional TV still short – choppy • Metro radio markets – steady but short • Regional radio markets – steady locally, soft nationally Metro Radio • Early signs from the new content line up are positive with a strong interest in sponsorships for all
Slide 25: Outlook: Regional Media
OUTLOOK For personal use only Regional Media • Recent success of the Big Bash and Sochi has given us a good start to the second half • We need to see a sustained improvement in ratings to get the benefit of these special events in the near term • Local regional radio revenue continues to be consiste
Slide 26: Outlook
OUTLOOK For personal use only • Refinancing and operational cost efficiency improvements will benefit the business in the second half. This has enabled for further investment in marketing and TV content without materially impacting our full year NPAT • We maintain our view that legislative reform is
Slide 27: Sizzle Reel
26 For personal use only SIZZLE REEL
Slide 28: Q&A
For personal use only SOUTHERN CROSS AUSTEREO Q&A
Slide 29: Appendix 1: Reconciliation of H1 FY13 Results
APPENDIX 1: RECONCILIATION OF H1 FY13 RESULTS For personal use only $ millions Reported One Off Reported Sunshine Coast Normalised Adjustments Underlying Normalisation Underlying Revenue 327.7 2.2 329.9 (3.9) 326.0 Expenses (223.2) 1.4 (221.8) 2.5 (219.3) Equity Accounted Profit (0.3) - (0.3) - (0.3
Southern Cross Austereo — H1 FY14 Earnings Presentation on 6ix