Nzme Limited · NZX:NZM
Nzme — FY2016 Earnings Presentation
33 slides from Nzme's earnings presentation, Feb 24, 2017
Slide 1: Full Year 2016 Results Presentation
For personal use only FULL YEAR 2016 RESULTS PRESENTATION 24 February 2017 1
Slide 2: Disclaimer
DISCLAIMER For personal use only T he information in this presentation is of a general nature and does not constitute financial product advice, investment advice or any recommendation. Nothing in this presentation constitutes legal, financial, tax or other advice. This presentation constitutes summa
Slide 3: Agenda
AGENDA For personal use only FY16 Results Summary & Operational Priorities 4 Channel Results Print, Radio & Experiential, Digital & e-Commerce 7 FY16 Financials 15 FY17 Focus 19 Q&A 24 NZME Talent & Executive Team 25 Supplementary Information 28 Lorde 3
Slide 4: NZME's Transformation & Integration
PRODUCT BRANDS NZME’S TRANSFORMATION & INTEGRATION For personal use only CAPABILITIES E-COMMERCE EXPERIENTIAL NTENT + CHAN RE CO NE LS CO CREATIVE BRANDED CONTENT Listed on NZX Main Board NEWS and ASX on 27 June 2016. Demerged from APN PRINT RADIO News & Media Limited on 29 June 2016. EVENTS VIDEO T
Slide 5: FY16 Results Summary
NZME FY16 RESULTS SUMMARY For personal use only STATUTORY NPAT TRADING REVENUE1 TRADING EBITDA1 $74.5m $407.4m $71.9m 74% FY15 $42.9m ▼ 6% FY15 $433.0m 0% FY15 $71.8m2 PRO FORMA NPAT1 PRO FORMA EPS1 $27.8m 14.2cps 1% FY15 $27.5m 6.0 FINAL DIVIDEND FULLY IMPUTED cps 3 Jase SCHEDULED FOR PAYMENT ON 28
Slide 6: Achievement of Operational Priorities
NZME ACHIEVEMENT OF OPERATIONAL PRIORITIES For personal use only 1. AUDIENCE GROWTH 2. PRINT REVENUE 3. RADIO REVENUE 5% 1 DECLINE SLOWED AGENCY RETURNED TO GROWTH, OF IN FY16 DIRECT REVENUE DECLINE SLOWED 4. DIGITAL REVENUE 5. COST SAVINGS 24% YoY GROWTH 6% YoY 6. TALENT DEVELOPED THE HITS - NEW BR
Slide 7: FY16 Market Comparables
NZME FY16 MARKET COMPARABLES PRINT For personal use only Advertising Revenue NZME Market Pro forma1 -10% -15%2 13% YoY in FY16 YoY in FY16 FY15 11% NZME > Market DIGITAL & E-COMMERCE Display Revenue NZME Market Pro forma1 Revenue 24% 16%4 28% YoY in FY16 YoY LTM to Q3 16 FY15 28% 59% Print FY15 60%
Slide 8: NZME Daily Reach of New Zealanders
IN A TYPICAL DAY, BY 9AM 73%1 OF NEW ZEALANDERS HAVE READ, For personal use only WATCHED, LISTENED TO, OR OTHERWISE ENGAGED WITH NZME 84% 87% of the of North Island1 Auckland1 NZME REACHES: 68% of the South Island1 Our national and local presence allows us to offer advertisers broad access to their
Slide 9: Print
NZME PRINT For personal use only • Print advertising revenue declined 10% in FY16, however the rate of decline softened in the second half due to improvements in both agency and direct revenues. • Continued focus on maintaining subscriber volume and price increases resulted in stable circulation rev
Slide 10: Retained Print Readership and Advertising Market Share
WE HAVE RETAINED PRINT READERSHIP1 For personal use only AND GROWN OUR PRINT ADVERTISING MARKET SHARE2 NZME Newspapers Unduplicated Weekly Reach1 1,600 • Print subscriber base retained, with yield 1,400 1,222 1,221 1,238 1,236 1,246 increases mostly offsetting retail volume declines. 1,200 Reach (00
Slide 11: Radio & Experiential
NZME RADIO & EXPERIENTIAL For personal use only • Radio & Experiential revenue decreased 4% in FY16, NZME Radio & Experiential FY16 FY15 % Change however decline softened in the second half. Revenue ($m) Radio & Experiential Revenue1 108.7 114.2 (5%) • Agency revenue returned to strong growth in the
Slide 12: Operational Initiatives Focused on Improving Radio
OPERATIONAL INITIATIVES FOCUSED ON IMPROVING For personal use only RADIO IN THE MEDIUM TERM NZME Major Markets 18-54 Share1 • NZME’s key 18-54 year old demographic major markets share has 36 remained stable over the last two years1. 32 • Newstalk ZB continues to maintain a leading % Share 28 positio
Slide 13: Digital & E-Commerce
NZME DIGITAL & E-COMMERCE For personal use only • Strong Digital revenue growth of 24% largely driven by mobile and video advertising revenue growth. • Following the success of NZ Herald Focus (news video show) NZ On Air funded the production of NZME’s regional video service, Local Focus, and “Under
Slide 14: Digital Audience and Native Video Growth
NZME’S DIGITAL AUDIENCE HAS GROWN BY 19%1, For personal use only AND NATIVE VIDEO STREAMS BY 69%2 IN FY16 NZME Digital Unduplicated Monthly Reach1 NZME Native Video Streams2 2,500 2,439 2,302 2,274 1,997 2,046 2,000 Video Streams Reach (000s) 1,500 1,000 500 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Q1 15 Q2 15
Slide 15: NZME FY16 Financials
For personal use only NZME FY16 FINANCIALS Laura McGoldrick and Tristram Clayton 15
Slide 16: Trading Result
NZME TRADING RESULT 1 For personal use only NZME Trading Result ($m) FY16 FY15 % Change • Trading EBITDA1 flat after adjusting for Trading Revenue1 407.4 433.0 (6%) incremental standalone costs incurred in the second half. Other Income 2.4 0.5 334% Costs (337.8) (358.6) (6%) • Challenging print mark
Slide 17: Costs
NZME COSTS For personal use only NZME Costs ($m) FY16 FY15 % Change People costs & contributors 163.0 172.4 (5%) • A continued focus on cost management contributed to a 6% reduction in costs in FY16. Print & distribution costs 73.8 77.8 (5%) Agency commission & marketing 35.2 38.8 (9%) • Transformat
Slide 18: Balance Sheet
NZME BALANCE SHEET For personal use only NZME Pro NZME NZME NZME Balance Sheet ($m) forma per EM1 Dec 2016 Jun 2016 • Payment of historical tax liabilities were Dec 2015 made on 26 August 2016, reflected in Cash and cash equivalents 16.2 13.8 7.7 the reduction of current tax liabilities Trade and ot
Slide 19: NZME FY17 Focus
For personal use only NZME FY17 FOCUS 19
Slide 20: Audience-Centric Focus and Initiatives
- AT THE CENTRE OF WHAT NEW ZEALANDERS WANT. For personal use only FOCUSED ON HOW WE’RE INITIATIVES DOING IT Leverage insights to maximise Listening audience targeting and engagement To our customers and Audience providing unique solutions Audience centric, content Enhance regional content and expan
Slide 21: FY17 Priorities
NZME FY17 PRIORITIES For personal use only TARGETS Grow audience reach Continue to retain Print revenue Return Radio revenue to growth Grow new revenue streams Effective cost and capital management Develop our people and retain our talent Complete the Fairfax NZ merger (subject to NZCC and sharehold
Slide 22: New Initiatives & Development
NZME NEW INITIATIVES & DEVELOPMENT For personal use only • CreateMe - maximises the integrated, • Ratebroker.co.nz - a mortgage, finance multi-platform sales proposition, and insurance aggregator platform delivering revenue growth via video, enabling consumers to easily purchase branded content and
Slide 23: Proposed NZME / Fairfax NZ Merger
PROPOSED NZME / FAIRFAX NZ MERGER For personal use only PROCESS UPDATE NEXT STEPS • The merger remains subject to • In the event that the merger is approved regulatory and shareholder approval. by the NZCC in March, NZME expects • The New Zealand Commerce to hold a shareholder meeting to vote Commis
Slide 24: Q&A – Thank You
For personal use only Q&A – THANK YOU 24
Slide 25: NZME Talent & Executive Team
For personal use only NZME TALENT & EXECUTIVE TEAM 25
Slide 26: Leveraging Award-Winning Talent
Fletch, Vaughan + Megan 6AM - 10AM LEVERAGING AWARD-WINNING TALENT WEEKDAYS For personal use only MATT HEATH JEREMY WELLS 6AM - 10AM WEEKDAYS MIKE HOSKING NZ’S NUMBER ONE Stace BREAKFAST HOST & Flynny 6AM - 8:30AM WEEKDAYS 3PM – 7PM WEEKDAYS 26
Slide 27: NZME Executive Team
For personal use only NZME EXECUTIVE TEAM ALLISON SHAYNE SARAH SARAH MIKE MATT MICHAEL LIZA LAURA DEAN MICHELLE WHITNEY CURRIE WOOD JUDKINS MORAN WILSON BOGGS MCNALLY MAXWELL BUCHANAN HAMILTON LEGAL MANAGING GENERAL CHIEF CHIEF CHIEF CHIEF CHIEF CHIEF GROUP GROUP COUNSEL & EDITOR MANAGER, STRATEGY F
Slide 28: NZME Supplementary Information
For personal use only Amanda Linnell Managing Editor NZME SUPPLEMENTARY INFORMATION Jared Savage Investigative 28 Journalist
Slide 29: FY16 Trading Reconciliation to Financial Statements
NZME FY16 TRADING RECONCILIATION TO FINANCIAL STATEMENTS For personal use only The Statutory Result, including the segment note, as reported in the Consolidated Financial Statements for the year ended 31 December 2016 is not reflective of the NZME business going forward, due to the impact of the dem
Slide 30: FY15 Trading Reconciliation to Financial Statements
NZME FY15 TRADING RECONCILIATION TO FINANCIAL STATEMENTS For personal use only $m NZME Trading NZME Related Acquired & Financial Result1 Exceptionals Non-trading Items2 Statements3 Revenue 433.0 - (2.8) 430.2 Other Income 0.5 0.4 0.6 1.5 Total Revenue & Other Income 433.6 0.4 (2.3) 431.7 Costs (358.
Slide 31: FY16 & FY15 Trading to Pro Forma Reconciliation
NZME FY16 & FY15 TRADING TO PRO FORMA RECONCILIATION For personal use only $m FY16 Pro forma Result1 FY15 Pro forma Result1 Trading EBITDA1 71.9 71.8 Standalone costs yet to be incurred2 (4.3) (4.3) Trading EBITDA1 after standalone costs 67.6 67.5 Earnings from divestments (0.4) - Pro forma EBITDA 6
Slide 32: FY16 & FY15 Related Exceptionals
NZME FY16 & FY15 RELATED EXCEPTIONALS For personal use only NZME Related Exceptionals ($m) FY16 FY15 • Redundancy costs relate to Redundancies (6.0) (7.2) ongoing restructuring and integration. Costs in relation to one-off projects (6.9) (5.3) • Costs in relation to one-off projects are Business and
Slide 33: Thank You
For personal use only THANK YOU Fifth Harmony 33