Southern Cross Media Group Limited · ASX:SXL
Southern Cross Media — Investor Presentation (August 2020)
30 slides from Southern Cross Media's investor presentation, Aug 20, 2020
Slide 1: Southern Cross Austereo FY20 Investor Presentation
SOUTHERN CROSS AUSTEREO FY20 INVESTOR PRESENTATION 20 August 2020
Slide 2: Disclaimer
DISCLAIMER Summary information The material in this presentation has been prepared by Southern Cross Media Group Limited ABN 91 116 024 536 (SCA) and contains summary information about SCA’s activities current as at 20 August 2020. The information in this presentation is of a general background natu
Slide 3: FY20 Results
FY20 RESULTS Grant Blackley
Slide 4: Executive Summary
EXECUTIVE SUMMARY EBITDA of $108.2m (incl AASB16) with positive EBITDA contribution across all 4 quarters while achieving 20% EBITDA margin Significantly improved balance sheet following $169m capital raising, with net debt and 1.24x leverage both at historic lows Free cash conversion 131% - c
Slide 5: Group Results Summary
GROUP RESULTS SUMMARY $ millions FY20 FY20 (exc. FY19 Var. • Group Revenue for full year reduced by 18.2% (Reported) AASB16) Revenue 540.8 540.8 661.0 (18.2%) • Expenses reduced by $65.8m with underlying expenses down $56.6m Expenses (432.6) (447.8) (513.6) (12.8%) • EBITDA of $93m, back 36.9% on pr
Slide 6: Headline Achievements
HEADLINE ACHIEVEMENTS • Sales Teams consistently delivered strong commercial outcomes – while leading creative development and insights across sector Sales & • TV power ratio 1.09 demonstrating continued market leading commercial outcome Content Performance • New Digital Audio revenues growing stron
Slide 7: FY20 Financial Results
FY20 FINANCIAL RESULTS Nick McKechnie
Slide 8: Group Reported Statutory Results
GROUP REPORTED STATUTORY RESULTS $ millions FY20 FY20 FY19 Var. (exc. AASB16) • Reported EBITDA $108.2m ($93.0m excluding Revenue 540.8 540.8 661.0 (18.2%) AASB16) Expenses (432.6) (447.8) (513.6) (12.8%) • Depreciation (excl. AASB16) reduced by $7.6m EBITDA 108.2 93.0 147.4 (36.9%) following outsou
Slide 9: Analysing the COVID-19 Impact
ANALYSING THE COVID-19 IMPACT Quarters 1-3 vs Quarter 4 • The COVID-19 impact most pronounced from mid- $146m March - reducing Q4 revenue by approximately $120m $101m $35m compared to average Q1-3 revenues $81m • Strong cost offsets, in line with those outlined at $26m $21m time of capital raising,
Slide 10: Cashflow
CASHFLOW $ millions FY20 FY19 Opening Cash 32.4 56.1 • SCA continues to generate consistent Cash from Operations less Finance Leases 106.5 144.9 cashflow - $61m pre dividend and non- Tax Payment (18.3) (34.6) recurring items compared to $70m in FY19 Net Payments for Non-Current Assets (14.5) (27.2)
Slide 11: Strong & Enhanced Balance Sheet
STRONG & ENHANCED BALANCE SHEET • Net Debt as at June 30 of $131.6m - a historic low level • Capital Raising proceeds used exclusively to reduce net debt – with zero capital consumed in Q4 • $28.4m acquisition relates largely to Redwave Radio – extending our national network by 11 stations to 99 com
Slide 12: Bank Covenants
BANK COVENANTS Leverage Ratio • Leverage ratio at historic lows following capital raising 4.50 4.50 4.50 • Additional testing headroom provided by supportive lenders until June 2021 3.50 3.50 3.50 3.50 3.50 3.50 3.50 3.50 3.50 • December 2020 leverage covenant to be 2.93 2.84 tested on annualised Q2
Slide 13: Positioning SCA for the Future
POSITIONING SCA FOR THE FUTURE Grant Blackley
Slide 14: Leaner Cost Model - Operating and Capex
LEANER COST MODEL - OPERATING AND CAPEX • Revenue related costs are ~29% of revenue • Non revenue related (NRR) costs reduced from $316m in FY19 to $287m in FY20 • FY21 NRR costs forecast to further reduce to $270-$275m, including; • Full year costs for Redwave, investment in digital audio $270-$275
Slide 15: Progressive Improvement in Revenue Trend
PROGRESSIVE IMPROVEMENT IN REVENUE TREND • Monthly revenues have steadily improved since Advertising Revenue – YoY declines v pcp April May June July the peak national COVID impact during April/May 201 • Recovery at early stage but, importantly, the steady and progressive easing of restrictions is p
Slide 16: SCA Revenue Category Analysis – Improving Trend
SCA REVENUE CATEGORY ANALYSIS – IMPROVING TREND Q4 FY20 v PCP Q1 FY21 F’cast v PCP • Overall advertising trend (dotted red line) is improving into Q1 FY21 as advertising spend improves Government Government Alcoholic • Underperforming segments are Beverages generally larger categories – which are 0%
Slide 17: Broadcast Audience – Increased Listening & Improving Mobility
BROADCAST AUDIENCE – INCREASED LISTENING & IMPROVING MOBILITY Q. Thinking about your average WEEKDAY...When CONSUMING MEDIA at various times of the day over the past 7 days, which audio-visual devices or services have you been using at that time? Audio Across The Weekday: People 18-54 Please note, r
Slide 18: Audio Accessibility - Increased Consumption Across Multiple Devices
AUDIO ACCESSIBILITY - INCREASED CONSUMPTION ACROSS MULTIPLE DEVICES Mobile and Tablet Desktop Smart Speakers 3M+ 4M+ Listening +10% 2hr 20m listening +12% Avg. Duration 69% YOY Smart News hours growth hours growth Per Session Growth +95% in July Source: AudioMetrix | July 2019 v. July 2020 .
Slide 19: SCA's Digital Universe: Live Radio, Radio Podcasts & Original Podcasts
SCA’S DIGITAL UNIVERSE LIVE RADIO, RADIO PODCASTS & ORIGINAL PODCASTS Live Radio & Music Radio Podcasts Original Podcasts Streaming 10.1M Active radio 8.5M listening hrs Active Radio SoundCloud 3.5M 155% Growth July +30% Steams 2.5M Downloads +80% since biggest YOY monthly March 2020 month +36% YoY
Slide 20: Audience Growth
Audience Growth 1.1M 8.5M 10.1 + 20% YoY + 36% YoY M + 30% YoY 617K 5M 5.2M + 27% YoY + 43% YoY + 43% YoY 3.6M 4.9M + 27% YoY + 18% YoY Source: AudioMetrix | July 2019 v. July 2020
Slide 21: Operational Review
OPERATIONAL REVIEW
Slide 22: Operational Review
OPERATIONAL REVIEW $ millions FY20 FY19 Var. • Statutory EBITDA $108.2m Audio Revenue 371.1 453.4 (18.2%) Television Revenue 169.5 207.3 (18.2%) • Audio and Television revenues each Corporate Revenue 0.2 0.3 (33.3%) contracted by 18% respectively – reflecting Total Revenue 540.8 661.0 (18.2%) the br
Slide 23: Audio - Overview
AUDIO - OVERVIEW $ millions FY20 FY19 Var. • Audio revenues reduced by 18.2% Total Revenue 371.1 453.4 (18.2%) Broadcast & Production (25.1) (25.6) (2.0%) • Total Audio expenses down $29m or 10% - heavily influenced by reduction in employee Employee (138.1) (156.9) (12.0%) expenses Selling, General
Slide 24: Audio – Advertising Revenues
AUDIO – ADVERTISING REVENUES $236.4m National Local • Regional Radio revenues less impacted than Metro Radio $55.7m • Stronger relative demand from national $187.4m $176.7m advertisers into regional markets $162.8m • Lower implied COVID-19 impact in regional, $42.9m compared to larger more densely p
Slide 25: PodcastOne Revenues Grow 96%
PODCAST ONE REVENUES GROW 96% • PodcastOne reached breakeven cashflow early in FY20 and is expected to contribute to earnings growth Podcast One $4.6m throughout FY21 • Revenue growth of 96% over prior year - momentum maintained through COVID-19 period evidenced by Q4 FY20 revenue up 47% over Q4 FY1
Slide 26: Television - Overview
TELEVISION - OVERVIEW $ millions FY20 FY19 Var. • Underlying EBITDA of $19.5m Total Revenue 169.5 207.3 (18.2%) • Variable programming expenses coupled with Broadcast & Production (81.4) (98.0) (16.9%) significant savings in employee related costs Employee (25.6) (32.6) (21.5%) have mitigated revenu
Slide 27: Television – Market Leading Power Ratio
TELEVISION – MARKET LEADING POWER RATIO Commercial Share & Power Ratio 1.11 1.09 • Market leading power ratio in FY20 further 1.05 1.07 improved with exceptional performance from SCA sales teams • Power ratio of 1.09 (revenue to ratings ratio) 38.5% 38.3% 37.7% 37.6% maintained in H2 despite delayed
Slide 28: TV Asset – Year Transformation Complete
TV ASSET – 3 YEAR TRANSFORMATION COMPLETE SCA has completed a simplification of the television asset - with the creation of a modular structure supported by specialist third party providers. SCA delivering outperformance through focus on core sales expertise SCA Core Expertise National and Local Sal
Slide 29: Key Priorities - The Year Ahead
KEY PRIORITIES - THE YEAR AHEAD • Increase radio audiences through targeted investment in key timeslots and markets • Invest in new and existing Digital Audio assets – develop new products and grow revenues Audio • Grow digital audio eco-system through education of new audio products – expanding inv
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