Southern Cross Media Group Limited · ASX:SXL
Southern Cross Media — FY2015 Earnings Presentation
29 slides from Southern Cross Media's earnings presentation, Aug 27, 2015
Slide 1: FY15 Investor Presentation
For personal use only SOUTHERN CROSS AUSTEREO FY15 INVESTOR PRESENTATION 27 AUGUST 2015 8/26/2015
Slide 2: Disclaimer
DISCLAIMER For personal use only Summary information • The material in this presentation has been prepared by Southern Cross Media Group Limited ABN 91 116 024 536 (“Southern Cross Austereo”) and contains summary information about Southern Cross Austereo’s activities current as at 27 August 2015. Th
Slide 3: FY15 Results
For personal use only FY15 RESULTS GRANT BLACKLEY 3
Slide 4: Results Summary
RESULTS SUMMARY • Operating result down on 2014, but trading through the bottom of the cycle For personal use only • H2 performance improved compared to H1 as business stabilises • Impairment charges of $361.4m • Net Debt reduced by $81.0m Full Year FY15 % Var Improvement from (7.3%) in H1 FY15 to (
Slide 5: Headline Achievements
HEADLINE ACHIEVEMENTS Regional Radio advertising revenue growth for the 4th consecutive year, up by 3.5% For personal use only • • SCA Regional TV revenues outperform the market • Regional EBITDA up 1.9%, margins up 0.7% • Strong EBITDA to cash conversion – 100% • Net debt reduced by $81.0m to $506.
Slide 6: Operational Strategy
OPERATIONAL STRATEGY Content reinvestment strategy gaining traction – positive survey results in both For personal use only • networks1 – yet more work to be done Re-establish Metro • Return of Hamish & Andy adding to audience increases across Today’s Hit network Share • Triple M remains #1 network
Slide 7: Capital Management Strategy
CAPITAL MANAGEMENT STRATEGY Capital management initiatives reduced leverage ratio to 2.84x, target of 2.50x For personal use only Increased cash flow through • FY15 net financing costs down 13.7% and expected to be down a further improved debt management 25% in FY16 • Securitisation of receivables f
Slide 8: FY15 Financial Results
For personal use only FY15 FINANCIAL RESULTS NICK McKECHNIE 8
Slide 9: Group Reported Statutory Results
GROUP REPORTED STATUTORY RESULTS For personal use only % Var. $ millions FY15 FY14 FAV/(UNFAV.) Revenue 611.1 640.8 (4.6%) Expenses (447.9) (453.0) 1.1% Significant items – EBITDA - (8.1) nm EBITDA 163.2 179.7 (9.2%) Depreciation & Amortisation (28.5) (27.5) (3.6%) Significant items - Impairment (36
Slide 10: Significant Items
SIGNIFICANT ITEMS For personal use only FY15 FY14 $ millions FAV/(UNFAV.) FAV/(UNFAV.) Profit Net Profit Profit Net Profit EBITDA EBITDA Before Tax After Tax Before Tax After Tax Provision for onerous contracts - - - (8.1) (8.1) (5.7) Impairment of intangibles and - (361.4) (349.7) - (392.5) (392.5)
Slide 11: Group Adjusted Results
GROUP ADJUSTED RESULTS For personal use only % Var. • EBITDA down 13.1% from reduced ratings $ millions FY15 FY14 FAV/(UNFAV.) and revenue in Metro radio Revenue 611.1 640.8 (4.6%) • NPAT decline 18.7% impacted by higher Expenses (447.9) (453.0) 1.1% effective tax rate and marginally higher EBITDA 1
Slide 12: Cashflow
CASHFLOW For personal use only $ millions FY15 • Strong conversion of EBITDA to cash – 100% Opening Cash 62.1 • Refinancing benefits realised – net financing payments down $12.6m on FY14 Cash from Operations 163.0 • Underwritten DRP has delivered returns to Payments for Non - Current Assets (28.4) s
Slide 13: Debt Facilities
DEBT FACILITIES • Further reduction in Net Debt For personal use only $ millions June 2015 June 2014 ― $87.5m reduction in Borrowing Group Net Debt Drawn Debt 650.0 650.0 ― $81.0m reduction in Group Net Debt Less Cash (143.1) (55.6) • Receivables facility, asset divestment and strong Net Debt (Borro
Slide 14: Facilities Summary
FACILITIES SUMMARY For personal use only Receivables Facility $ millions FY15 FY14 • Trade receivables sold to lender, Drawn Undrawn Drawn Undrawn improving working capital Term Debt Facility • $22.2m balance at 30 June 2015 (matures Jan 2019) 650.0 - 650.0 - • 2 year, non-recourse facility Working
Slide 15: Covenants
COVENANTS Leverage ratio excluding securitisation of receivables For personal use only • Leverage ratio peaked in December 2014 Leverage Ratio and now reducing 3.75 3.75 3.6 3.6 3.5 3.5 • Partial securitisation of receivables has 3.25 accelerated quantum of leverage reduction 2.86 2.83 3.12 2.67 2.6
Slide 16: Operational Review
For personal use only OPERATIONAL REVIEW NICK McKECHNIE
Slide 17: Operational Review
OPERATIONAL REVIEW For personal use only % Variance $ millions FY15 FY14 FAV/(UNFAV.) Regional Revenue 361.6 363.1 (0.4%) Metro Revenue 224.1 248.7 (9.9%) Corporate Revenue 25.4 29.0 (12.4%) Total Revenue 611.1 640.8 (4.6%) Regional Expenses (246.9) (250.5) 1.4% Metro Expenses (166.3) (175.5) 5.2% C
Slide 18: Regional – TV and Radio
REGIONAL – TV AND RADIO % Variance For personal use only $ millions FY15 FY14 FAV/(UNFAV.) TV 202.3 208.4 (2.9%) Reg TV: Better than market performance – led Radio 159.3 154.7 3.0% by stronger local sales Total Revenue 361.6 363.1 (0.4%) Radio: Year on year growth in both national Broadcast & Produc
Slide 19: Metro Radio
METRO RADIO For personal use only % Variance $ millions FY15 FY14 FAV/(UNFAV.) Growth in Triple M network partially Total Revenue 224.1 248.7 (9.9%) offset Today’s Hit Network decline Broadcast & Production (19.1) (21.8) 12.4% Employee (69.7) (72.0) 3.2% Digital revenues continue to grow at +13.1% S
Slide 20: Corporate
CORPORATE For personal use only % Variance $ millions FY15 FY14 FAV/(UNFAV.) Total Revenue 25.4 29.0 (12.4%) Corporate costs – management changes Broadcast & Production (3.1) (2.9) (6.9%) Employee (34.1) (32.7) (4.3%) Selling, General and Admin is net of cost Selling, General & Admin 2.5 8.6 (70.9%)
Slide 21: Advertising Revenue Analysis
For personal use only ADVERTISING REVENUE ANALYSIS NICK McKECHNIE
Slide 22: Regional TV Advertising Revenues
REGIONAL TV ADVERTISING REVENUES (EXCLUDES CONTRA AND OTHER REVENUE) • SCA TV revenue outperformed market; market National/Local Split For personal use only $m’s decline 4.5% whilst TV revenues were back 2.7% 193.8 189.6 184.5 • Strong and stable local clients supported by 85.1 83.3 84.7 special eve
Slide 23: Regional Radio Advertising Revenues
REGIONAL RADIO ADVERTISING REVENUES (EXCLUDES CONTRA AND OTHER REVENUE) For personal use only • Regional Radio continues to perform $m’s National/Local Split strongly with revenues up 3.5% 146.7 147.6 152.8 ― National revenue strong across all regions; up 8.9% ― Local revenues consistent; up 1.3% 10
Slide 24: Metro Radio Advertising Revenues
METRO RADIO ADVERTISING REVENUES (EXCLUDES CONTRA AND OTHER REVENUE) For personal use only National/Local Split • Metro Radio markets were strong at +5%, SCA $m’s 234.9 229.6 share stabilised at 28% 204.0 70.1 67.4 • Steps being taken to improve monetisation of 65.9 ratings through a better multi-la
Slide 25: Metro Survey Results
METRO SURVEY RESULTS For personal use only • Strategy for re-establishment of metro assets as leading brand in market is gaining momentum with consistent ratings improvement over last 3 surveys • Multi- layered investment across both brands will continue • Survey 5 – includes only partial impact of
Slide 26: Outlook & Summary
OUTLOOK & SUMMARY For personal use only GRANT BLACKLEY 26
Slide 27: FY16 Outlook
FY16 OUTLOOK For personal use only REGIONAL • Regional radio has started positively, continuing trend of year on year growth • TV markets remain challenged, although increased consistency and growth in Channel 10 is beneficial METRO RADIO • Expecting 5% year on year revenue growth in Q1 • Positive r
Slide 28: Summary
SUMMARY For personal use only • High quality set of diversified media assets provide platform for growth • Strengthened Executive and Management team with renewed focus on sales strategy and market leading content • Continual investment in programming to re-establish Today’s Hit Network, whilst main
Slide 29: Questions – Thank You
For personal use only QUESTIONS THANK YOU
Southern Cross Media Group — FY2015 Earnings Presentation on 6ix