2019 Interim Results Presentation

INTERIM
RESULTS
SKY NETWORK TELEVISIONLIMITED
INTERIM RESULTS DECEMBER 2018

SKY Network Television Limited | Interim Results 2019 |2
JOHN FELLET
CHIEF EXECUTIVE OFFICER
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SKY Network Television Limited | Annual General Meeting 2018 |3
SKY Network Television Limited | Interim Results 2019 |3
REVENUE
Millions
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439.8
403.0
Dec-17Dec-18

SKY Network Television Limited | Interim Results 2019 |4
-36,544
-46,006
-17,406
Dec-16Dec-17Dec-18
POSITIVE CHANGE IN
SUBSCRIBER MOVEMENTS
750,321
CUSTOMERS

SKY Network Television Limited | Interim Results 2019 |5
NEW SKY SUBSCRIBERS PROFILE
2018
10%
40%
50%
Former Netflix
Subscribers
Never had
Netflix
Netflix

SKY Network Television Limited | Interim Results 2018 |6
REVENUE
439.5
403.0
0
100
200
300
400
Dec-17Dec-18
Millions
$84.16
$84.23
$50.00
$55.00
$60.00
$65.00
$70.00
$75.00
$80.00
$85.00
$90.00
Dec 17Dec 18
SATELLITE ARPU
85%
SKY customers have
SKY Entertainment

SKY Network Television Limited | Interim Results 2019 |7

SKY Network Television Limited | Interim Results 2019 |8
NEW CUSTOMERS HAVE IMPROVED RETENTION RATES
0%
20%
40%
60%
80%
100%
120%
024681012141618202224262830323436384042
FY16FY18
Tenure -Months

SKY Network Television Limited | Interim Results 2019 |9
CHURN STABILITY
0%
5%
10%
15%
20%
25%
30%
35%
Jun 98
Jan 19

SKY Network Television Limited | Interim Results 2019 |10
CHURN STABILITY
14%
14%
15%
15%
16%
16%
17%
Gross ChurnNet Churn

SKY Network Television Limited | Interim Results 2019 |11
TOTAL TELEVISION ADVERTISING REVENUE
(YOY Quarterly change)
-10%
-5%
0%
5%
10%
15%
Sep 10 Qtr
Dec 10 Qtr
Mar 11 Qtr
Jun 11 Qtr
Sep 11 Qtr
Dec 11 Qtr
Mar 12 Qtr
Jun 12 Qtr
Sept 12 Qtr
Dec 12 Qtr
Mar 13 Qtr
Jun 13 Qtr
Sept 13 Qtr
Dec 13 Qtr
Mar 14 Qtr
Jun 14 Qtr
Sept 14 Qtr
Dec 14 Qtr
Mar 15 Qtr
Jun 15 Qtr
Sept 15 Qtr
Dec 15 Qtr
Mar 16 Qtr
Jun 16 Qtr
Sept 16 Qtr
Dec 16 Qtr
Mar 17 Qtr
Jun 17 Qtr
Sept 17 Qtr
Dec 17 Qtr
Mar 18 Qtr
Jun 18 Qtr
Sep 18 Qtr
Dec 18 Qtr

SKY Network Television Limited | Interim Results 2019 |12
0
5
10
15
20
25
30
35
201720182019
PEAK PUTS (PEOPLE USING TELEVISION) TREND
ALL 5+
SOURCE Nielsen TAM, Total TV Audience 5+

SKY Network Television Limited | Annual General Meeting 2018 |13
SKY Network Television Limited | Interim Results 2019 |13
35.1
31.5
27.4
Dec-16Dec-17Dec-18
ADVERTISING REVENUE
FOLLOWING MARKET TRENDS
Millions
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SKY Network Television Limited | Interim Results 2019 |14
LOWER OPERATING COSTS
Millions
308.3
286.3
274.7
Dec-16Dec-17Dec-18

SKY Network Television Limited | Interim Results 2019 |15
32%
34%
40%
38%
40%
Dec-14Dec-15Dec-16Dec-17Dec-18
CONTINUED INVESTMENT IN WORLD
CLASS CONTENT
PROGRAMMING COSTS % REVENUE

SKY Network Television Limited | Interim Results 2018 |16
WORLD
CLASS
SPORT
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SKY Network Television Limited | Interim Results 2018 |17

SKY Network Television Limited | Interim Results 2018 |18
AWARD
WINNING
SHOWS
© 2018 Universal Studios. All Rights Reserved.
©2018 Warner Bros. Entertainment Inc. and Metro-Goldwyn-Mayer Pictures Inc. All Rights Reserved.

SKY Network Television Limited | Interim Results 2018 |19
GAME OF THRONES
APRIL 2019

SKY Network Television Limited | Annual General Meeting 2018 |20
SKY Network Television Limited | Interim Results 2019 |20
59.5
66.7
53.6
Dec-16Dec-17Dec-18
STRONG NET PROFIT
Millions
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SKY Network Television Limited | Interim Results 2018 |21
SALE OF

SKY Network Television Limited | Annual General Meeting 2018 |22
SKY Network Television Limited | Interim Results 2018 |22
28.2
38.8
Dec-17Dec-18
INVESTING MORE IN DEVELOPING
FUTURE PRODUCTS
CAPEX
Millions
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UNDERSTANDING
OUR CUSTOMERS
AND DELIVERING
GREAT EXPERIENCES
IMPROVED CUSTOMER VIEWING EXPERIENCE

SKY Network Television Limited | Interim Results 2018 |24
CHANNEL
PACKAGE
OLD RATENEW RATE
1 APRIL 2019
HD Ticket $9.99 per month
Nocharge
SKY Starter$24.91 per month $25.99 per month
SKY Entertainment$25 per month $25.50 per month
SKY Sport $29.90 per month $31.99 per month
SKY HD CHANNELS
TO BE EXPANDED AND
MADE AVAILABLE TO ALL
AS PART OF THE PRICE CHANGES
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SKY Network Television Limited | Interim Results 2018 |25
NZBASED COMPANY
1,100 EMPLOYEES
2018
INCOME TAX $40 MILLON
GST $91.6 MILLON
PAYE$29.6MILLION

SKY Network Television Limited | Interim Results 2018 |26
ENHANCED
DOWNLOAD TO GO
IMPROVED CUSTOMER STREAMING EXPERIENCE

SKY Network Television Limited | Interim Results 2019 |27

SKY Network Television Limited | Interim Results 2018 |28
1000
Movies
ON
DEMAND

SKY Network Television Limited | Interim Results 2018 |29
HYBRID
IP CONNECTED
IP
CONNECTED
SUBSCRIBERS
CONTINUES
TO GROW
2013
20162017
2018
2014
2015
SATELLITE ONLY
STREAMING

SKY Network Television Limited | Interim Results 2018 |30
100% NZ Reach

SKY Network Television Limited | Interim Results 2018 |31SKY Network Television Limited | Interim Results 2019 |31
FUNDING PROFILE
FACILITYDRAWN MARGINMATURITY
Bank
Debt
$200m $107m280bpJul 2022
Bond$100m$100m
Fixed
rate at
6.25%
Mar2021
© SKY 2019 Interim Results 2018
353
290
213
REDUCTION OF DEBT
Dec-16Dec-17Dec-18
Millions

FOREIGN CURRENCY HEDGING
For USD exposures
100% hedged for 6 months 30 June 2019 @ 0.7205
67% hedged for June 2020 year @ 0.7093
25% hedged for June 2021 year @ 0.7038
For AUD exposures
89% hedged for 6 months 30 June 2019 @ 0.9272
82% hedged for 30 June 2020 @ 0.9349
46% hedged for 30 June 2021 @ 0.9183
Average $US payment rate for Opexfor the 6 months to December 18 @ 0.7090
© SKY 2019 Interim Results 2018

SKY Network Television Limited | Interim Results 2019 |33
2019201820172016201520142013201220112010
Interim7.57.515.015.015.014.012.011.08.07.0
Final7.512.515.015.015.012.011.010.57.0
Ordinary Total15.027.530.030.029.024.022.018.514.0
Special32.025.0
TOTAL15.027.530.030.029.024.054.043.514.0
DIVIDEND

SKY Network Television Limited | Interim Results 2019 |34
GUIDANCE
Sky’s FY19 guidance is:
$m
REVENUE790 -795
EBITDA230 –235
NPAT85 –90
CAPEX70 –75

SKY Network Television Limited | Interim Results 2018 |35
INTERIM
RESULTS
SKY NETWORK TELEVISIONLIMITED
INTERIM RESULTS DECEMBER 2018

FINANCIAL DETAIL
APPENDIX –INTERIM RESULTS 2018

RESULTS SUMMARY
20172018
%Change
Revenue
439.8403.0(8.4%)
Operatingexpenses
286.3274.7(4.1%)
EBITDA
153.5128.3(16.4%)
Depn& Amort
51.247.3(7.6%)
EBIT
102.381.0(20.8%)
Interest
9.66.5(32.3%)
Tax
26.020.9(19.6%)
NETPROFIT/(LOSS)
66.753.6
(19.6%)0
© SKY 2019 Interim Results 2019

EXPENSE ANALYSIS
20172018%Change
Programming166.9161.7(3.1%)
Subscriberrelated costs48.442.1(13.0%)
Broadcastingand infrastructure46.546.8(0.6%)
Depreciationand amortisation51.247.3(7.6%)
Other costs24.624.1(2.0%)
TOTALEXPENSE337.6322.0(4.6%)
© SKY 2019 Interim Results 2019

20172018%Change
ResidentialSatellite
subscriptions
357.5322.0(9.9%)
Other subscriptions
42.746.18.0%
Advertising
31.527.4(12.7%)
Other Income
8.27.5(8.5%)
TOTALREVENUE439.9403.0(8.4%)
REVENUE ANALYSIS
© SKY 2019 Interim Results 2019