Nine Entertainment Co. Holdings Limited · ASX:NEC
Nine Entertainment — FY2015 Earnings Presentation
24 slides from Nine Entertainment's earnings presentation, Aug 27, 2015
Slide 1: Full Year Results Briefing
David Gyngell CEO Full Year Results Briefing Simon Kelly COO/CFO Amanda Laing Commercial Director and Group General Counsel Alex Parsons MD, Nine Digital 27 August 2015 Peter Wiltshire Group Sales Director
Slide 2: Disclaimer
Disclaimer Important notice and disclaimer projections and other forward looking statements will not be achieved. This document is a presentation of general background information about Forward looking statements are provided as a general guide only, and the activities of Nine Entertainment Co. Hold
Slide 3: FY15 result in line with guidance
FY15 result in line with guidance Reported Pro Forma $m FY15 FY141 Variance • Group EBITDA of $287m consistent with guidance of $285m - Revenue 1,610.1 1,569.9 +2.6% $290m Group EBITDA 287.3 311.0 -7.6% NPAT, before Specific Items 140.1 144.2 -2.9% • Profit After Tax of $140m, pre Specific Items • R
Slide 4: Specific Items
Specific Items Reported $m FY15 Non-cash impairment charge (791.8) Primarily the write-down of licence and goodwill values on balance sheet Inventory write-off / onerous contract provision (57.4) Net other 1.9 $13m one-off contract close-out costs. Balance relates to the provisioning for loss-making
Slide 5: Solid result in a challenging ad market
Solid result in a challenging ad market Adjusted Continuing businesses Pro Forma Pro Forma Metro FTA market down 1.5%, $m FY15 FY141 Variance share +0.2 pts to 38.9%, Regional market down 3.2% Revenue Network 1,207.9 1,221.2 -1.1% Digital 163.4 122.7 +33.2% Double digit growth in both Search and Vid
Slide 6: Ongoing capital management opportunities
Ongoing capital management opportunities Adjusted Pro Forma Pro Forma Continuing businesses FY15 FY14 Variance Operating Free Cash Flow, $m 237.5 192.4 +45.1 Operating Free Cash Flow Conversion 109% 79% +30pts Capital Expenditure, $m (27.2) (20.5) -6.7 Pro Forma As at 30 Jun 2015 Net Cash, $m 115.0
Slide 7: Group Sales Director
Group Sales Director Peter Wiltshire
Slide 8: FTA – share offsets weak market
FTA – share offsets weak market • FTA Metro market decline of 1.5%1. Trend improving from 3% H1 decline to 0.2% growth in H2 Nine’s Metro Ratings2 and Revenue1 Share • FTA Regional market down 3.2%1 across the year 40% 39% • Market leadership in all key advertising demographics2 38% • #1 25-54 • #1
Slide 9: Programming
Programming News and Current Affairs Family Entertainment Ob Docs, Factual & Comedy wwos.com.au cricket.com.au Sport 9 Refer to glossary in Appendix 4 for definitions of all capitalised terms. Totals may not add due to rounding.
Slide 10: Digital
Digital Alex Parsons
Slide 11: A new era – Our digital future
A new era – Our digital future • Surpassed FY15 revenue and earnings forecasts • Continued transition to focus on seamless content and audience experience rather than delivery medium • Continued to dominate news - delivering Australia’s leading multi medium news brand, 9News • Launched three new con
Slide 12: Current trading and outlook
Current trading and outlook • Market remains very short and volatile – however, July and August (est) have recorded modest growth • FY16 metro market expected to grow modestly, at best • Regional markets expected to continue to under-perform • Ratings performance has improved markedly since July • G
Slide 13: Nine - the Home of Premium Rugby League
Nine - the Home of Premium Rugby League • Transformative NRL rights package • All the Premium games – weekly, Finals and State-of-Origin • Four Live games per week, in the best time slots – 7.30pm Thursday, Fridays and Saturdays, 4pm Sundays • Over 270 hours per year of live action, more than double
Slide 14: Stan ahead of business plan
Stan ahead of business plan • In excess of 300,000 gross subscribers (households), with over 800,000 users of the service since launch • More than halfway to target of 300-400,000 active subscribers by December year end • Premium content – more hours, more exclusives, adding content continually • Fo
Slide 15: Key strategic initiatives
Key strategic initiatives NEC Group focus Structural opportunities • Distribution of premium video content, both free and via subscription (Stan) • Potential for higher affiliate returns across multiple platforms • Potential for regulatory change to impact on licence fees, • Increasing integration o
Slide 16: TIP STONE SSRIS
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Slide 17: Appendices
Appendices • Appendix 1: Adjustment for discontinued businesses • Appendix 2: Divisionals • Appendix 3: Cash flow • Appendix 4: Cash flow reconciliation • Appendix 5: Debt and leverage • Appendix 6: Glossary 17 Refer to glossary in Appendix 4 for definitions of all capitalised terms. Totals may not
Slide 18: Appendix 1: Adjustment for discontinued businesses
Appendix 1: Adjustment for discontinued businesses Reported Reported Less discontinued Pro Forma Pro Forma Adjusted Pro Forma $m FY15 businesses1 FY15 FY14 Pro Forma FY14 Variance Revenue 1,610.1 238.7 1,371.4 1,569.9 1,343.9 +2.1% Group EBITDA 287.3 70.1 217.2 311.0 243.0 -10.6% Net Interest2 (26.6
Slide 19: Appendix 2: Divisionals
Appendix 2: Divisionals Pro Forma $m FY15 FY141 Variance Revenue Network 1,207.9 1,221.2 -1.1% Digital 163.4 122.7 +33.2% Live 238.7 226.0 +5.6% Total Revenue 1,610.1 1,569.9 +2.6% Total Revenue, ex discontinued businesses 1,371.4 1,343.9 +2.1% EBITDA Network 206.0 241.5 -14.7% Digital 21.9 15.6 +40
Slide 20: Appendix 3: Cash flow
Appendix 3: Cash flow Less Reported Adjusted Reported discontinued Pro Forma Pro Forma Pro Forma $m FY15 businesses FY15 FY14 FY14 Variance EBITDA 284.0 70.1 213.8 306.5 238.5 -24.7 Change in working capital 10.0 (10.4) 20.4 (42.0) (53.5) +73.9 Distributions from Associates 3.3 - 3.3 2.9 2.9 +0.4 Ne
Slide 21: Appendix 4: Cash flow reconciliation
Appendix 4: Cash flow reconciliation Reported Adjust for Discontinued Pro Forma Actual $m FY15 businesses FY15 FY14 Statutory cashflows from operating 246.2 (46.4) 199.8 189.0 activities Statutory interest received (3.8) 1.7 (2.2) (4.6) Statutory interest and other costs of 22.6 - 22.6 69.6 finance
Slide 22: Appendix 5: Debt and leverage calculations
Appendix 5: Debt and leverage calculations Actual Actual Pro Forma 30 Actual Actual Jun-Jun As at, $m 30 Jun 2015 Jun 2015 31 Dec 2014 30 Jun 2014 Variance Interest bearing loans and 575.7 - 585.0 603.1 -27.4 borrowings1 Less: Cash and cash 179.9 132.1 241.6 219.8 -39.9 equivalents Plus: Cash held o
Slide 23: Appendix 5: Glossary
Appendix 5: Glossary • Adjusted Pro Forma – Adjusting the Pro Forma FY14 results to exclude Nine Live, and assuming the new capital structure in place for the full period • Continuing Businesses – Excludes the operations of Nine Live • Contra – Advertising time offered in lieu of cash payment • EBIT
Slide 24: nine entertainment co.
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