Corus Entertainment Inc. Class B · TSX:CORS
Corus Entertainment Inc. Class B — Investor Day (January 2014)
73 slides from Corus Entertainment Inc. Class B's investor day presentation, Jan 29, 2014
Slide 1: Corus Entertainment Annual Investor Day
Wednesday, January 29, 2014 CORUS ENTERTAINMENT INC. ANNUAL INVESTOR DAY ENTERTAINMENT
Slide 2: Safe Harbour Disclosure: Forward-Looking Statements
SAFE HARBOUR DISCLOSURE FORWARD-LOOKING STATEMENTS To the extent any statements made in this presentation contain information that is not historical; these statements are forward-looking statements within the meaning of applicable securities laws. These forward-looking statements related to, among o
Slide 3: Corus Entertainment Annual Investor Day
Wednesday, January 29, 2014 CORUS ENTERTAINMENT INC. ANNUAL INVESTOR DAY ENTERTAINMENT
Slide 4: Tom Peddie
Tom Peddie Executive Vice President and Chief Financial Officer Corus Entertainment Investor Day 2014 Wednesday, January 29, 2014
Slide 5: Creating Value for Shareholders
Creating Value for Shareholders 1. Strong balance sheet ü Completed refinancing Feb/Mar 2013 • Issued Cdn $550M 4.25% Senior Unsecured Guaranteed Notes due 2020 • Annual interest costs reduced by almost $15M 2. Focus on returning cash to shareholders with a strong dividend yield of 4%+ ü Dividend
Slide 6: Returning Cash to Shareholders With a Strong Dividend Yield of 4%+
Returning Cash to Shareholders With a Strong Dividend Yield of 4%+ Annual Dividend Payout History For the fiscal years ended August 31 1.00 1.06 ($CDN per Class B Share, Split Adjusted) 0.92 0.74 0.60 0.53 0.56 0.60 1 2.1% AG R r C 5 Yea 0.13 0.03 0.04 2004 2005 2006 2007 2008 2009 2010 2011 2012 20
Slide 7: Corus Delivers Strong Free Cash Flow
Corus Delivers Strong Free Cash Flow • Consistently positive Free Cash Flow driven by strong underlying performance • Free Cash Flow totaled $154M in fiscal 2013 • Annual capital expenditures of $15M - $20M per year, with no significant capital investment on the horizon Opera1ng and Free Cash Flow P
Slide 8: Strong Balance Sheet and Credit Rating
Strong Balance Sheet and Credit Rating Net Debt and Leverage Interest on Long-‐Term $33 $29 $37 $45 $39 $33 $38 Debt ($M) • Including pending amendment, unused lines of credit = $250M - $500M • Largely fixed rate financing to 2020 at 4.25% • DBRS Issuer Credit rating: BBB(low) • S&P Corporate Credi
Slide 9: Acquisition Impact on Corus: TELETOON, Historia and Séries+
Acquisition Impact on Corus: TELETOON, Historia and Séries+ Standalone Acquisitions (2) Synergies Proforma % Change ($M) ($M) ($M) ($M) Fiscal 2013 Revenue (1) 803.5 104.0 - 907.5 13% Fiscal 2013 EBITDA (1) 270.0 48.0 12.0 – 15.0 330.0 22% Adjusted Earnings per Share 1.65 2.04 24% 2015E Segment Prof
Slide 10: Corus Delivered Exceptional 3 Year Performance
Corus Delivered Exceptional 3 Year Performance Corus: 3 Year Total Shareholder Return = 13% CAGR (1) S&P/TSX Composite Index S&P/TSX Consumer Discretionary Index Corus (CJR.B) 160 Return on $100 invested August 31, 2010 140 $ 120 100 80 (1) Assumes reinvestment of dividends
Slide 11: Potential Share Value
Potential Share Value • Free Cash Flow = Increased Shareholder Value • Free Cash Flow of $170M using Free Cash Flow multiples of 14x to 18x would equate to a CJR.B share price of $28 to $36 Share Price $36 $32 $28 14x 16x 18x Free Cash Flow Multiple
Slide 12: Financial Guidance: Fiscal 2015
Financial Guidance: Fiscal 2015 Consolidated EBITDA $340 million to $360 million Free Cash Flow $170 million +
Slide 13: Doug Murphy
Doug Murphy Executive Vice President and Chief Operating Officer Corus Entertainment Investor Day 2014 Wednesday, January 29, 2014
Slide 14: All Corus Brands Reel
All Corus Brands Reel ENTERTAINMENT
Slide 15: Corus Entertainment Annual Investor Day
Wednesday, January 29, 2014 CORUS ENTERTAINMENT INC. ANNUAL INVESTOR DAY ENTERTAINMENT
Slide 16: Corus TV Owns the Podium
Corus TV Owns the Podium WOMEN FAMILIES (CO-VIEW) 2 of the top 3 networks 2 of the top 3 networks KIDS 2 of the top 3 networks MILLENNIALS 2 of the top 6 networks Source: BBM Canada TV Meter, August 26, 2013 to January 5, 2014 (19 wks), Kids = K2-‐11, Women = W25-‐54, Families = A18+ with children
Slide 17: Compelling and Exclusive Content
Compelling and Exclusive Content 17
Slide 18: Canada's Brand Steward
Canada’s Brand Steward OPRAH WINFREY NETWORK | Eo IN CANADA nicxelodeon CARTOON NETWORK. ENTERTAINMENT
Slide 19: Aligned and Focused on Growth
Aligned and Focused on Growth ü Best-in-class margins and strong Free Cash Flow ü Experienced management team Canada’s only pure play media and entertainment company Photo: Richard Johnson 19
Slide 20: How Will Corus Grow?
a How Will Corus Grow? ENTERTAINMENT
Slide 21: Our Building Blocks for Growth
Our Building Blocks for Growth 21
Slide 22: YTV Merry 6mas Reel
YTV Merry 6mas Reel ENTERTAINMENT
Slide 23: The Corus Advantage Works
The Corus Advantage Works ENTERTAINMENT
Slide 24: Canada's Mini Baby Boom
Canada’s Mini Baby Boom Population Highest increase (11%) in the number of children aged 4 and under in 50 years! Source(s): Statistics Canada, CANSIM table 102-4502, Births, Catalogue no. 84F0210X and Selected Historical Statistics, Canada, 1921-2009, Catalogue no. 82-553X Occasional. 24
Slide 25: All Roads Lead to Corus Kids
All Roads Lead to Corus Kids 25
Slide 26: Growing Kids Advertising
Growing Kids Advertising The entertainment and toy categories return to solid growth on Corus networks! • Our category-specific research and insights create advertiser value 26
Slide 27: Co-View Works!
Co-View Works! 24% 24% 22% Solo View Recall Co-View Recall 21%20% 19% 19% 19% 18% 21% 16% 16% 13%13% 12% 15% 13% 10% 10% 10% 10% 10% 9% 12% 10% 8% 8% 11% 11% 6% 9% 6% 6% 6% 8% 5% 3% 3% 3% 5% 4% 5% 2% 2% 3% 1% 1% 1% Source: DECODE Research, Oct 2011, English Canada Moms with Kids 2-12 27
Slide 28: Co-View Keeps Growing!
Co-View Keeps Growing! Ad Revenue A GR 13 % C F09 F10 F11 F12 F13 28
Slide 29: Integration of TELETOON is Complete
Integration of TELETOON is Complete People/Facility Integration: January 16, 2014 Systems Headcount Business/Broadcast Systems: January 27, 2014 ü Revenue and Expense Synergies Complete Programming 29
Slide 30: Complementary Scheduling Maximizes Audiences
Complementary Scheduling Maximizes Audiences 30
Slide 31: 31
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Slide 32: Leveraging our Strategic Partnerships
Leveraging our Strategic Partnerships 32
Slide 33: Content Pipeline Focused on Boys Action and Preschool
Content Pipeline Focused on Boys Action and Preschool 33
Slide 34: Mysticons Promo
Mysticons Promo ENTERTAINMENT
Slide 35: We're Excited About Mysticons
We’re Excited About MYSTICONS • Boys Action Property • Production 2014 • Broadcast 2015 • Retail 2016 35
Slide 36: Little Charmers Promo
Little Charmers Promo ENTERTAINMENT
Slide 37: We're Excited About Little Charmers
We’re Excited About LITTLE CHARMERS • Girls Preschool Property • Production 2014 • Broadcast 2015 • Retail 2016 37
Slide 38: Trucktown Promo
Trucktown Promo ENTERTAINMENT
Slide 39: We're Excited About Trucktown
We’re Excited About TRUCKTOWN • Boys Preschool Property • Renowned author Jon Scieszka • Production 2014 • Broadcast 2015 • Retail 2016 39
Slide 40: Digital Marketplace Unlocks Substantial Value in Nelvana Library
Digital Marketplace Unlocks Substantial Value in Nelvana Library $20M Nelvana Digital Revenues $14M $9.0M $3.8M $1.4M $0.1M 2010 2011 2012 2013E 2013A 2015E 40
Slide 41: Our Building Blocks for Growth
Our Building Blocks for Growth 41
Slide 42: W Network / Family Reel
W Network / Family Reel ENTERTAINMENT
Slide 43: Another Year of Growth
Another Year of Growth 35 2 30 2 7% Growth Average Minute Audience (000s) 6 25 2 2 4 3 Compared to F12 3 20 3 15 10 20 20 21 19 19 15 5 10 0 F02 F04 F06 F08 F10 F12 F13 W Network Cosmo TV OWN W Movies Source: BBM Canada TV Meter - Broadcast weeks 1-52(53), Total Canada, Women 25-54, M-Su 2a-2a, Aver
Slide 44: Room to Grow!
Room to Grow! Share of Revenue 4% 36% 60% Specialty Networks Conventional Stations Corus Networks Revenue based on TSS 2012-2013, English Canada Only 44
Slide 45: W Network Originals Deliver Audiences
W Network Originals Deliver Audiences Mon-Thurs 8p-11p W25-54 AMA (000s) +24% Average Minute Audience (000s) 50 44 40 33 30 20 10 0 Canadian Originals F12 F13 Source: BBM Canada TV Meter; Total Canada, 2013/14, 2012/13, weeks 1-52 45
Slide 46: Increasing Content Ownership in Women & Family
Increasing Content Ownership in Women & Family ü Original Programming Drives Ratings ü Focus on Unscripted Reality Series ü Ownership Creates International Option Value ü Complete Control of All Rights 46
Slide 47: Tessa and Scott Promo / Tori and Dean Promo
Tessa and Scott Promo Tori and Dean Promo
Slide 48: W Network Ratings Gains Ring the Cash Register
W Network Ratings Gains Ring the Cash Register One Ratings Share Point is $20M in Revenue 48
Slide 49: OWN Delivers Gold!
OWN Delivers Gold! 12 +34% F12 F13 Total Average Minute Audience (000s) 10 8 Ad Revenue +30% 6 +13% 4 2 0 Total Day (6a-6p) Prime (6p-12a) Source: BBM Canada TV Meter, W25-34.Total Canada 2013/14, 2012/13, weeks 1-52 49
Slide 50: W Movies Adds Audience and Revenue
W Movies Adds Audience and Revenue 3.5 +45% F12 F13 Total Average Minute Audience (000s) 3 2.5 +33% Ad Revenue 2 +38% 1.5 1 0.5 0 Total Day (6a-6p) Prime (6p-12a) Source: BBM Canada TV Meter, W25-34.Total Canada 2013/14, 2012/13, weeks 1-52 50
Slide 51: ABC Spark Promo
ABC Spark Promo ENTERTAINMENT
Slide 52: ABC Spark is a Hit with Millennials
ABC Spark is a Hit with Millennials 14 F12 F13 +69% 12 Total Average Minute Audience (000s) 10 +70% Ad Revenue 8 +100% 6 4 2 0 Total Day (6a-6p) Prime (6p-12a) Source: BBM Canada TV Meter, A18-49, Total Canada 2013/14, 2012/13, weeks 1-52 52
Slide 53: Our Building Blocks for Growth
Our Building Blocks for Growth 53
Slide 54: The Golden Age of Content on Pay TV
The Golden Age of Content on Pay TV 54
Slide 55: Movie Central Promo
Movie Central Promo ENTERTAINMENT
Slide 56: Pay TV Service is a Strong Value Proposition
Pay TV Service is a Strong Value Proposition More than 1,000 Hours of HD On-Demand Content, Anywhere, Anytime, On Any Device! 56
Slide 57: Pay Audiences Have an Insatiable Appetite for Content
Pay Audiences Have an Insatiable Appetite for Content Canadians who watch the most TV will watch even more… up 10% from 2009 Source: Deloitte Technology, Media & Telecommunications Predictions 2014, English-Speaking Canadians 57
Slide 58: Encore On-Demand Promo / Movie Central On-Demand Promo
Encore On-Demand Promo Movie Central On-Demand Promo
Slide 59: Pay TV Will Grow
Pay TV Will Grow ü Collaboration with Bell on The Movie Network ü Packaging and Bundling Innovation ü The Best Exclusive Content 59
Slide 60: Our Building Blocks for Growth
Our Building Blocks for Growth 60
Slide 61: Radio is Important to Corus
Radio is Important to Corus TALK CLASSIC ROCK HOT AC/WOMEN COUNTRY MODERN ROCK GREATEST HITS 61
Slide 62: Radio Has Significant Operating Leverage
Radio Has Significant Operating Leverage Revenue Growth 2% 3% 4% 5% 6% 1% Expense Growth 4% 8% 11% 14% 18% 2% 2% 5% 9% 12% 15% 3% 0% 3% 6% 10% 13% 4% (3%) 1% 4% 7% 11% 62
Slide 63: Major Markets Offer Best Opportunity to Realize Operating Leverage
Major Markets Offer Best Opportunity to Realize Operating Leverage 15 $ Millions 10 5 0 1 2 3 4 5 Share Points Share point increases deliver substantial revenue growth 63
Slide 64: Q107 TV Spot / Property Brothers Radio Spot
Q107 TV Spot Property Brothers Radio Spot
Slide 65: Property Brothers
ai . ~PROPERT ' {BROTHERS ENTERTAINMENT
Slide 66: Born to Rock Promo
Born to Rock Promo ENTERTAINMENT
Slide 67: Our Building Blocks for Growth
Our Building Blocks for Growth 67
Slide 68: Historia / Séries+ Reel
Historia / Séeriest Reel ENTERTAINMENT
Slide 69: Corus Enters Quebec with a Portfolio of Strong Brands
Corus Enters Quebec with a Portfolio of Strong Brands 69
Slide 70: Historia, Séries+ and TELETOON are Top Performers in Quebec
Historia, Séries+ and TELETOON are Top Performers in Quebec Share of French Specialty Historia & Séries+ Audience 25-54 (2012-2013)1 Québecor Corus 18.4% +7% 21.3% SRC/CBC 8.4% +12% Other Bell 11.8% 40.1% 2012 2013 Revenue EBITDA 1 Source: BBM TV Meter. Based on audience share of all French-language
Slide 71: Quebec is a Unique Market... Full of Potential
Quebec is a Unique Market… Full of Potential 71
Slide 72: Corus Will Continue to Grow
Corus Will Continue to Grow Corus TELETOON integration and leveraging of Corus Advantage to launch Kids new global kids properties Women & Driving ratings through more original owned content with global appeal Family Pay TV Targeted programs to acquire and retain subscribers Radio Focused on deliver
Slide 73: Corus Entertainment Annual Investor Day
Wednesday, January 29, 2014 CORUS ENTERTAINMENT INC. ANNUAL INVESTOR DAY ENTERTAINMENT