Stv Group Plc · LSE:STVG
Stv — Merger or Acquisition (July 2023)
20 slides from Stv's merger presentation, Jul 6, 2023
Slide 1: STV Acquires Unscripted Production Network Greenbird Media
1 STV ACQUIRES UNSCRIPTED PRODUCTION NETWORK GREENBIRD MEDIA Investor presentation, 6 July 2023 1
Slide 2: Agenda
Agenda • Key messages • Headline commercial terms • Introduction to Greenbird • Strategic benefits and growth potential • Group financials • Integration 2
Slide 3: A transformative deal that accelerates STV's revenue and earnings diversification
A transformative deal that accelerates STV’s revenue and earnings diversification • STV Studios becomes one of the UK’s leading production groups • Significantly boosts production scale and creative firepower • Now 24 creative labels, up from 9 • Stable of returning series more than trebles from 12
Slide 4: STV has acquired 100% of Greenbird Media for c.£24m
STV has acquired 100% of Greenbird Media for c.£24m Initial cash payable: Deferred consideration: Total cash £21.4m c.£2.6m consideration • £11.5m to repay investor loan notes • c.£1.6m for 14% equity, based on c.£24m • £9.6m for 86% equity performance in FY23/24 • £0.3m for surplus cash • c.£1m for
Slide 5: Greenbird is one of the largest networks of independent unscripted production companies in the UK
Greenbird is one of the largest networks of independent unscripted production companies in the UK ESTABLISHED, MAJORITY- LARGE MINORITY POSITIONS EXCITING BUSINESSES OWNED PRODUCTION IN FAST-GROWING INDIES WITH POTENTIAL FOR COMPANIES (25-40%) GROWTH (c.5%) Greenbird manages a highly successful port
Slide 6: The Greenbird portfolio contains a huge range of hit unscripted shows
The Greenbird portfolio contains a huge range of hit unscripted shows 25+ returning series, catalogue of 2,000 hours, 350+ new hours in 2023 6
Slide 7: The acquisition significantly boosts STV Studios' production scale and creative firepower
The acquisition significantly boosts STV Studios’ production scale and creative firepower 5,000+ 620+ hours Greenbird hours 2,000 350+ hours STV Studios hours 39 27 3,000 hours 24 270 15 hours 12 9 Creative labels Returning series Production hours (2023) Content catalogue 7
Slide 8: The enlarged STV Studios group is an exciting mix of consolidated businesses and minority positions
The enlarged STV Studios group is an exciting mix of successful consolidated businesses and minority positions Significant future growth potential exists from consolidating minorities MAJORITY-OWNED* LARGE MINORITIES SMALL MINORITIES £70M+ REVENUE IN 2023 £30M+ REVENUE IN 2023 SUB £5M REVENUE IN 202
Slide 9: The acquisition aligns with and accelerates STV Studios' existing vision and objectives
The acquisition aligns with and accelerates STV Studios’ existing vision and objectives A world class producer for the biggest networks and global streamers The UK’s #1 nations and regions production company by turnover, profit and reputation Strategic objectives 1 2 3 ACCELERATE CONTINUE TO GROW EX
Slide 10: We're already the UK's 3rd biggest nations & regions producer
We’re already the UK’s 3rd biggest nations & regions producer with the No. 1 position in our sights Turnover 2022 Rank Company Locations Key shows (£m) 1 Lime Pictures Liverpool 108.70 Hollyoaks; Love At First Lie; Are You The One; Celebs Go Dating 2 Bad Wolf Cardiff 57.50 His Dark Materials; Indust
Slide 11: The combined group brings significant strategic benefits and growth potential
The combined group brings significant strategic benefits and growth potential Management bench Creative pipeline Commercial scale International growth strength • Now 24 labels • Enlarged nations & • LEGO Masters already • Respected regions presence in international hit in US Greenbird execs • Unriva
Slide 12: The Greenbird Group is profitable, growing and operates without external bank debt
The Greenbird Group is profitable, growing and operates without external bank debt Revenue Operating profit Cash and net working capital 40 4 10 Cash balances Net working capital 30 3 8 6 20 2 4 10 1 2 0 0 0 FY21 FY22 FY21 FY22 FY21 FY22 -2 -4 • Greenbird Group was in net liability position at Decem
Slide 13: The Greenbird acquisition will have a materially positive impact on STV Studios performance in FY23
The Greenbird acquisition will have a materially positive impact on STV Studios performance in FY23 Operating margin should take a significant step towards our 2025 target of 10% Greenbird Group – FY23 STV Studios - FY23 £70-75m H2 23 Greenbird H1 23 STV Studios FY23 - £30-35m c.£10m £20-25m FY23 -
Slide 14: The enlarged STV Group will be a more balanced business
The enlarged STV Group will be a more balanced business with the Studios division similar in scale to Broadcast STV will comfortably exceed its 2023 diversification target of 50% from non- broadcast earnings, expecting to hit at least 60% STV Group revenue – FY23 STV Group revenue – FY18 50% revenue
Slide 15: STV Group net debt and financial covenants remain well within facility size and target ranges
STV Group net debt and financial covenants remain well within facility size and target ranges • Net debt of enlarged STV Group c.£32m on Day 1: • Existing STV Group net debt of c.£38m offset by cash in Greenbird Group of c.£6m* • Net debt expected to reduce towards the end of the year • STV bank fac
Slide 16: We have a comprehensive integration plan for H2 2023
We have a comprehensive integration plan for H2 2023 Five workstreams focused on growth, integration and synergies International / Property, systems & Finance processes & Policy/governance Communications Distribution infrastructure controls • Agree approach to • Consider options to • Roll-out of key
Slide 17: A clear STV management structure will oversee integration, governance and growth
A clear STV management structure will oversee integration, governance and growth STV Group plc STV STV Studios Integration Board of Management Divisional Board Committee Directors Board • David Mortimer, Studios MD Chaired by Stuart • Simon Pitts, Group CEO Mullin, new Studios • Lindsay Dixon, Group
Slide 18: Overall STV Studios is well placed to take advantage of the growing UK and global content market
Overall STV Studios is well placed to take advantage of the growing UK and global content market Global content spend still forecast to Scotland’s share of spend continuing to grow despite slowdown rise, now 21% of spend ex London Global content spend ($ billion) Revenue by region (exc London) 260 1
Slide 19: Summary
Summary • Transformative deal that accelerates STV’s diversification • STV Studios now one of the UK’s leading production groups • Significantly boosts production scale and creative firepower • Materially earnings enhancing from Day 1, and STV Studios’ margin accretive • Compelling future growth pot
Slide 20: Appendix: Ownership structure of enlarged STV Studios
Appendix: Ownership structure of enlarged STV Studios STV Studios creative labels Greenbird creative labels Labels Ownership Labels Ownership STV Studios Drama 100% Crackit Productions 75% STV Studios Entertainment 100% Tuesday’s Child (which owns 51% of Interstellar) 51% STV Studios Factual 100% Fl