CEO Presentation to Craigs Investment Partners

CRAIGS INVESTMENT PARTNERS PRESENTATION
6 DECEMBER 2017

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 summary information only, and you should not rely on it in
isolation from the full detail set out in the Consolidated Financial Statements.
This presentation may contain projections or forward-
looking statements regarding a variety of items. Such
projections or forward-looking statements are based
on current expectations, estimates and assumptions
and are subject to a number of risks, uncertainties
and assumptions. There is no assurance that results
contemplated in any projections or forward looking
statements in this presentation will be realised. Actual
results may differ materially from those projected in
this presentation. No person is under any obligation to
update this presentation at any time after its release to
you or to provide you with further information about
NZME Limited.
A number of unaudited non-GAAP financial measures
are used in this presentation, which are outlined in
the supplementary information of the presentation.
Non-GAAP financial information does not have a
standardised meaning prescribed by GAAP and
therefore may not be comparable with similar
information presented by other entities. You should
not consider any of these in isolation from, or as a
substitute for, the information provided in the audited
Consildated Financial Statements for the twelve
months ended 31 December 2016 or the unaudited
Consolidated Interim Financial Statements for the six
months ended 30 June 2017.
While reasonable care has been taken in compiling
this presentation, none of NZME Limited nor its
subsidiaries, directors, employees, agents or advisers
(to the maximum extent permitted by law) gives any
warranty or representation (express or implied) as
to the accuracy, completeness or reliability of the
information contained in it nor takes any responsibility
for it. The information in this presentation has not been
and will not be independently verified or audited.
Disclaimer
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C
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RADIO
SPORT
BRANDED
CONTENT
EXPERIENTIAL
EVENTS
DIGITAL
SERVICES
RADIO BRAND
ENGAGEMENT
DIGITAL
PRINT
ENT.
NEWS
CREATIVE
ECOMMERCE
VIDEO
DIVERSE
AUDIENCES
STRATEGY
AND PLANNING
NZME’s Transformation, Integration & Demerger
Listed on NZX Main Board
and ASX on 27 June 2016.
Demerged from APN (now HT&E
Limited) on 29 June 2016.
Transformed into an audience-centric
business focusing on News, Sport
and Entertainment pillars.
Integrating our sales and editorial
teams, facilitated by NZME Central
and regional co-locations.
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Our national and local presence allows us to offer
advertisers broad access to their target markets
(1) Nielsen CMI, May fused database: Q2 16 – Q1 17 (population 10 years +).
Based on unduplicated weekly reach of NZME newspapers, radio stations, and
monthly domestic unique audience of NZME’s digital channels.
87%

Auckland
1
▲

74%
of the
South Island
1
▲

85%
of the
North Island
1
▲

1% YoY1% YoY11% YoY
of
NZME’s reach is growing
82%1 of New Zealanders now read,
watch, listen to, or otherwise
engage with our brands
NZME reaches:
4

(1) Trading Revenue, Trading EBITDA, Pro forma NPAT and Pro forma EPS are non-GAAP measures that are explained and reconciled in the Full Year 2016
Results Presentation. (2) The FY15 NZME segment result in the APN FY15 accounts was $74.9m, this has been adjusted for $3.1m of standalone costs
incurred in H2 16 to provide a like for like comparison. (3) A supplementary dividend of 1.06 cents per share will be payable to shareholders who are not
tax resident in New Zealand and who hold less than 10% of the shares in NZME Limited.
Jase
+ PJ
PRO FORMA NPAT
1
$27.8m
PRO FORMA EPS
1
14.2cps
NZME FY16 RESULTS SUMMARY
TRADING REVENUE
1
$407.4m
▼

6%

FY15 $433.0m
STATUTORY NPAT
$ 74 .5 m
TRADING EBITDA
1
$71.9m

0%

FY15 $71.8m
2

FINAL DIVIDEND FULLY IMPUTED
6.0
cps
3
PAID ON 28 APRIL 2017
FULL YEAR DIVIDENDS 9.5cps
74%

FY15 $42.9m
1%

FY15 $27.5m
5

▲
1%

H1 16 PRO FORMA

5.0cps
$189.1m3.5 cps5.0cps
$7.8m$28.2m$9.9m
TRADING EBITDA2TRADING NPAT2
▲

1%

H1 16 PRO FORMA

$27.9m
▲

1%

H1 16 PRO FORMA

$9.8m
▼
3%
H1 16 PRO FORMA

$195.3m
TRADING REVENUE2
TRADING EARNINGS PER SHARE2INTERIM DIVIDEND FULLY IMPUTED3
(1) The H1 16 Statutory NPAT of $60.8m was impacted by the demerger from APN (now HT&E) and discontinued businesses, and is therefore not comparable with the H1 17 result as explained in the Half Year 2017 Results Presentation.
(2) All Trading and Pro forma measures shown here are non-GAAP measures that are explained and reconciled in the Half Year 2017 Results Presentation. (3) A supplementary dividend of 0.6176 cents per share will be payable to
shareholders who are not tax residents in New Zealand and who hold less than 10% of the shares in NZME Limited.
NZME H1 17 Results Summary
STATUTORY NPAT1
PAID ON 27 OCTOBER 2017
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(1) Pro forma Revenue is a non-GAAP measure that is explained and reconciled in the Half Year 2017 Results Presentation. (2) PwC NPA Quarterly Performance Comparison Report Q2 2017. (3) SMI New Zealand Agency Advertising
Expenditure Report June 2017. (4) IAB / PWC New Zealand H1 2017 Interactive Advertising Spend Report (NZ market only). Note: Year on year comparison is only indicative as data collection and collation methodology has
changed.
NZME H1 17 Market Comparables
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(1) Nielsen CMI, May fused database: Q2 16 to Q1 17 (population 10 years +). Based on unduplicated weekly reach of
NZME newspapers, radio stations, and monthly domestic unique audience of NZME’s digital channels. (2) Please refer to
the Half Year 2017 Results Presentation for a reconciliation of H1 16 Statutory, previously reported and Pro forma Costs.
NZME H1 17 Achievements against Operational Priorities
1. Audience growth 4% YoY to 3.3 million1
2. Print revenue decline slowed further
3. Radio revenue audience share growth achieved, agency growth continues
4. Digital revenue 20% YoY growth
5. Cost savings 4% YoY2
6. Talent developed leadership engagement improved,
The Hits & Newstalk ZB talent enhancements
7. Merger progressed
NZ Commerce Commission appeal process underway
Mike Hosking
New Zealand’s No. 1 Breakfast Host
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1. Grow audience reach by leveraging Washington Post platform and tools
to enhance audience analytics, content performance and advertising targetting
2. Continue to retain Print revenue by further innovating
the print proposition and leveraging integrated sales
3. Return Radio revenue to growth by capitalising on improved
ratings results and sales team transformation to deliver revenue
4. Grow new revenue streams through digital classifieds
verticals of property, employment and motoring
5. Eff ective cost and capital management through
operational enhancements across the business
6. Develop our people and retain our talent
through further improving engagement and
continuing talent succession planning
7. Progress the Fairfax merger
subject to successful appeal
and shareholder approval
NZME FY17 Priorities
Peter Burling – Team New Zealand
Helmsman, America’s Cup 2017
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Q&A
ZM’s Floating Music Festival, Taupo 2017
10