Sky AGM – Chairman’s & CEO Address

Sky New Zealand
PO Box 9059
Newmarket
Auckland 1149
New Zealand

10 Panorama Road
Mt W ellington
Auckland 1060
New Zealand

T. +64 9 579 9999

sky.co.nz










SKY AGM – CHAIRMAN’S ADDRESS
for immediate release, 17
th
October 2019



Attached is the Chairman’s address and slide presentation for SKY’s AGM to be held at
10.30am today at The Generator, 12 Madden Street, Auckland.

ENDS

For further information, please contact:
Sophie Moloney
Chief Legal Officer and Company Secretary
Sky Network Television Limited
(09) 579 9999
Sophie.moloney@skytv.co.nz

Sky AGM 17 October 2019
Philip Bowman, Chair
Prepared remarks

Welcome to the Sky AGM for 2019 and thank you for taking the time to be here. I am Philip
Bowman, the recently appointed chairman and I’m delighted to be here and to have the
privilege of leading the board in these interesting times.
Shareholders holding in excess of 10% of the voting shares in the company are here in
person today or are represented by proxy. Directors holding proxies will vote as instructed.
Where proxies may be exercised at the discretion of an individual director, votes will be cast
in favour of each resolution.
As the quorum is present, I declare the meeting to be properly constituted and open.
It is my pleasure to introduce my colleagues on the board.
Peter Macourt is retiring from the board today, and we will mark his significant contribution to
Sky a little later in today’s proceedings.
It’s also my pleasure to introduce you to our new Chief Financial Officer, Blair Woodbury, and
Company Secretary, Sophie Moloney. Our Chief Executive Martin Stewart has brought
together an outstanding new leadership team for Sky, and he will introduce the other leaders
shortly.
We have a lot to cover in today’s meeting, including some important resolutions. In particular,
we were delighted to reach agreement with SANZAAR and New Zealand Rugby on a new 5-
year rights deal over the weekend, and it is my pleasure to recommend to shareholders today
that you approve the resolution to allow the company to complete that contract. We will
speak more about that shortly.

Today’s agenda is as follows:
- I will provide a review of the past year, with particular emphasis on the second half.
- Martin Stewart will give you an overview of the financial results we reported in
August, and outline the new strategic direction we have set for the company.
- Martin will also report on specific progress against that strategy over the last seven
months, and outline the priorities for the next twelve months.
- There will then be an opportunity for you to ask questions before we turn to the formal
business of the meeting.
- As set out in the Notice of Meeting, we have six ordinary resolutions to consider, and
two special resolutions.
Following voting I will close the meeting, after which directors and senior executives will join
those shareholders who choose to remain for refreshments.

High-level review of past year
At the Results presentation in August, Martin and Blair talked about the year being a ‘’Game
of Two Halves”. There has been rapid change since the Interim Results in February and the
arrival of Martin Stewart as Chief Executive. I am going to focus most of my remarks on
these last six months.
The situation in February was that our business was experiencing a steady decline in
subscribers, and facing increasing competition both from local and global players. Streaming
services were increasingly attracting customers away from Sky, and costs - particularly for
content - were rising.
The Board and the leadership team had two choices - keep trying to stem the flow, reduce
costs and reinforce the reliability of satellite to deliver content to all New Zealanders; or
radically step up the fight.
We chose to do the second. We have a proud history as a business: a start-up and disruptor
who changed the way New Zealanders viewed television. We also have many of the
fundamentals in place: an unbeatable range of original and acquired content, proven and
trusted relationships with content partners, and a strengthened, talented and energised team.
Our task is to deliver our content in ways that work for all New Zealanders – and that has
meant making some changes.
The first is having an unrelenting focus on our customers and what they want, and then
leveraging the best of modern technology, and particularly streaming services, to deliver this
content in ways that meet or exceed customer expectations. We have a clear brief for our
people: continue to support satellite customers who are the heart of our business - and will
be for some years to come – while at the same time rapidly developing and delivering
competitive streaming products.

Secondly, retain the rights that matter. We understand the important balance between what
our customers want to watch (and what they are willing to pay), what our content partners
need for their businesses to be profitable, and our need to make wise trade-off choices that in
the long term provide a commercial return to you, our shareholders. Securing the SANZAAR
rights this week for another five years was an absolutely critical part of that strategy.

Thirdly, pursue partnerships. In a global context, we operate in a very small market, and
partnerships and wholesale arrangements are a practical way of achieving our ambition of
having Sky in the hands of all New Zealanders, particularly in the face of increasing global
competition.

The fourth area is pursuing alternative revenue streams. The purchase of RugbyPass is a
clear example of leveraging our existing capabilities while also looking beyond our existing
business and beyond the NZ border.
I will shortly ask Martin to take you through the strategy in more detail and outline progress to
date, but before that I’d like to make a few observations:
The status quo of the past decade was not an option. Technology, consumer behaviour and
commercial pressures are all changing at an unprecedented pace. In simple terms our
business model needed to be reimagined.
We are fortunate to have a CEO of Martin’s calibre and international experience now leading
Sky. He is implementing an ambitious programme of change and innovation, and he has an
unrelenting focus on returning the business to growth. It’s been very pleasing to see the
significant progress made by the team in the first seven months of Martin’s tenure.
Whilst the Board is committed to generating value for all shareholders, building a successful
enduring business in times of change is a long term rather than short term endeavour. In
addition to providing governance to the company, the directors see their principal role as
providing guidance and robust challenge on the strategic direction developed by
management, and then holding management to account to deliver agreed objectives and
outcomes.
The Board has had to make some difficult decisions in the last 6 months, including the
goodwill and technology project write-offs, and the decision to suspend dividends. We
recognise that we are asking you, as owners of the business, to support an ambitious
turnaround plan, and to accept that we need first to invest to reposition the business for future
growth. This is a responsibility we take very seriously.
We will leave plenty of time at the end for your questions, but I also believe that our
presentation today will start to build your confidence in the changed strategic direction of the
business and the capability of the refreshed leadership team to deliver on this.
[Remarks from Martin Stewart]
[Resolutions to be voted on]
Before I close the meeting, I would like to acknowledge the significant contribution of Peter
Macourt to our company. Peter was appointed chairman of the board in August 2002, and his
long service and commitment to Sky is remarkable and very much appreciated. Peter has
spent most of his career in the media and entertainment sectors, and he has made a
substantial contribution to Sky during his 17 years as chair. On behalf of current and
previous board members and all Sky staff and shareholders I sincerely thank him for his
contribution to Sky.

Conclusion of meeting
Ladies and gentlemen, that concludes the formal part of our meeting, and I declare the
meeting closed.
Thank you for attending Sky’s 2019 Annual General Meeting today, and thank you for your
continued support as a Sky shareholder.
Your Board, leadership team and Sky staff are passionate about this business and are highly
focused on the task ahead. We look forward to updating you as we execute on our strategy to
transform the business and deliver on the promises that we have outlined today.
Ends.

---

Sky New Zealand
PO Box 9059
Newmarket
Auckland 1149
New Zealand

10 Panorama Road
Mt W ellington
Auckland 1060
New Zealand

T. +64 9 579 9999

sky.co.nz










SKY AGM – CHIEF EXECUTIVE’S ADDRESS
for immediate release, 17
th
October 2019



Attached is the Chief Executive’s address and slide presentation for SKY’s AGM to be held at
10.30am today at The Generator, 12 Madden Street, Auckland.

ENDS

For further information, please contact:
Sophie Moloney
Chief Legal Officer and Company Secretary
Sky Network Television Limited
(09) 579 9999
Sophie.moloney@skytv.co.nz

Sky AGM 17 October 2019
Martin Stewart, Chief Executive
Prepared remarks

I am delighted to be here and to address you at my first Sky AGM.
I set myself some priorities when I joined Sky, and the first one was to build an outstanding
leadership team. I think we have managed to achieve that, and I’m pleased to introduce you
to the great team who will take Sky into the future.
Financial overview
You will have seen the Results from our announcements in August, so today I will simply
provide a short recap.
The important context is that the world is changing, and so are we. We’re transforming and
building a new business.
And the Results demonstrate that we’re heading in the right direction.
The adjusted results were better than the guidance we provided in February. Given the
disrupted market that we are operating in, adjusted earnings of $97.4 million was a solid
result.
We have returned to growth by embracing streaming. It was pleasing to report a 16% growth
in streaming and commercial revenues.
You will have seen that we made the decision to write off $670 million of the goodwill asset on
our balance sheet. This is a non-cash adjustment and those of you who have followed our
business for a while will know that it came about as a result of the INL transaction some 14
years ago.
We made some other key decisions in the last six months, like the decision to stop the IVP
Project in order to focus our attention on streaming. This resulted in a $38m write-off, but
we’re confident that our refocused technology plans will allow us to achieve our wider
ambitions.
Also, in accordance with normal audit practice we reviewed our considerable content portfolio
and concluded that certain shows will not provide value in the future. We therefore decided to
write off the $6 million carrying value of those shows.

We are making changes to our organisation as part of our transformation to become more
adaptable and responsive, and some of that has resulted in redundancy and consultancy
costs of $5 million.
We are continuing to observe good cost control as we rebalance to a streaming future. In the
last financial year our capex was slightly below the 5-year average.
We also strengthened our balance sheet, reducing debt levels by a further $43m during the
year, with $88m drawn down against our banking facility at June 30
th
.
Since then, we have acquired RugbyPass for US$40m with US$10m paid for from our
banking facility, USD$20m paid for by way of new share issue and the remaining US$10m
only to be paid after an earn-out period and achievement of agreed KPIs.
As Philip outlined, we are asking our shareholders to invest in our growth and as a result did
not declare a final dividend to go with the fully imputed interim dividend of 7.5 cents per share.
As we look to transform your business, we do anticipate some higher operating costs as we
invest to reinvigorate our brand, connect with customers and reshape our organisation to be
fitter, faster and more responsive to the needs of our customers and partners.
Strategy overview
This leads me on to our strategic direction.
Our ambition is for Sky to be in the hands of every New Zealander.
Our strategy is to grow the business by accelerating our focus on streaming services while
continuing to super-serve all Sky customers.
A new approach was needed in order to achieve that growth, and there are four things that
we relentlessly focus on:
1. Our Customers
First and most important is our customers. By being clear on our customer promise, and
delivering on it every time to build trust and confidence in our brand. This is a never-ending
task.
2. Our Content
Through trusted partnerships and our own original content, we deliver the best sport and
entertainment content to New Zealanders.

In a world where more and more content is being produced, it is unrealistic to expect us to
gain all of the rights, but we are using our deep understanding of what New Zealanders want
to watch to deliver the content that matters most.
3. Our People
We are making changes where they are needed, and we’re focused on the culture, capability
and capacity of our people to thrive and succeed.
4. Our Products
Delivering great content to our customers on all available platforms and devices is the key to
our future.
Underpinning that work are some important principles:
- We are investing in the right areas – we know we need to ‘invest to grow’, but we are
also very focused on prudent expenditure and prioritising the right projects
- We are genuinely open to wholesaling and partnering
- We are ambitiously looking at adjacent markets and new revenue streams to keep
prices as low as possible for customers and to make us less reliant on any single
content or product.

Priorities for the next 12 months
We have some clear priorities for the next 12 months:
- Keep delivering on our promise to customers: We will deliver our content to our
customers on whatever platforms and devices they want, when they want it. Around
Sky we use the term ‘love the base’ a lot – we are relentlessly focused on improving
our customers’ experiences with Sky, at all levels. We’ve already done things like
removing the HD fee, increasing the number of HD channels, and making it easier for
customers to ‘self-serve’ if they prefer digital customer care. We’re investing more in
consumer insights and research to truly hear our customers’ voice, and finding better
ways to recognise and reward customer loyalty.

- Extend our lead as New Zealand’s premier streaming provider: Our streaming
services are a core focus. Sky Sport Now and NEON are in market now and the
teams responsible for marketing and delivering them have very clear performance
targets. We have also established a dedicated and highly-skilled team who are
developing some exciting new initiatives in the digital space. I know there’s a lot of
talk about streaming at the moment, and there’s no question it is the future. Sky is
determined to retain our position as the premier New Zealand service for streaming

sport and entertainment content. We will be revealing more about our Sky Digital
programme in the coming months.

- Win the rights that matter: It’s been a big week in this regard, not only with the
revolutionary SANZAAR rights deal but also our securing of top international cricket
events through our deal with the ICC. I was also pleased to announce the Sevens,
NZ Open golf and Cricket Australia deals in the last few weeks. There are more to
come, and we will continue to be focused on securing the rights that matter to our
customers and that make long term sense for our shareholders. I remind you that
we approach all of these negotiations from a position of strength – we have the
largest paying subscriber base in New Zealand, we’re the only player that can reach
every kiwi across streaming, DTH and free-to-air, we have world-leading production
and broadcast capability, and a team that knows how to ensure high quality, high
reliability delivery.

I realise that might sound a bit sport-centric, and it’s not meant to. Securing the
entertainment rights that matter to our customers is just as important to us. We will
be making some changes to our family offer in the next couple of months, including a
new Sky Movies Family channel and the introduction of award-winning children’s
channel CBeebies from the BBC. We offer our customers the best content from
many of the world’s leading studios, and we have great new deals to announce very
soon.

- Build on our commitment to local content: Tex outlined some of the things we
are already doing on Prime, and in the coming months you will see more from Sky
and Prime in the originals and local space. Telling New Zealand stories and
reflecting our culture is a key differentiator for a local business like Sky in the
competition against the global players.

- Continue evolving and simplifying our business: we need to keep innovating and
evolving, and to do that we need to be a simpler, faster, flatter, more collaborative
and data-driven organisation.

- Keep delivering on our Home of Sport commitment: we are about the whole
game, and that means supporting all levels of kiwi sport. That’s why you’ve seen us
increase our support for women’s teams, including some like the White Sox and Tall
Ferns who have struggled to attract funding, and why we’re actively involved at
community and grassroots sport levels as well as the high performance end. We
have some superb local sport initiatives to share with you in the near future. Our
sport partners know they can rely on us to nurture and showcase their sports at all
levels.

That ‘whole game’ commitment to New Zealand Rugby was a key part of our successful bid.
As I said at the announcement this week, our shared commitment to growing the game is part
of the deeper new partnership that is focused on creating value for both New Zealand Rugby
and for Sky.
Our pitch to New Zealand Rugby talked about us being ‘Stronger Together’, and that is true of
the Sky team too. We are working at pace and making considerable changes, but we are
doing it as a team who have come together to re-energise Sky for the future. We are
committed to growth and to transforming Sky into a long-term sustainable multi-media, multi-
platform entertainment business that balances the needs of our customers and the desires of
our content partners, and delivers on behalf of our shareholders.
End.

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Sky Annual General Meeting
17 October 2019
© Sky Network Television Limited -AnnualGeneral Meeting, October 2019

Sky Board of Directors
Philip Bowman
Chairman
Martin Stewart
Chief Executive and Director
Derek Handley
Director
Joan Withers
Director
Peter Macourt
Director
Mike Darcey
Director
Susan Paterson ONZM
Director
Geraldine McBride
Director
2

Agenda
•Philip Bowman, Chair:
•Review of the past year
•Martin Stewart, CEO:
•Financial Results
•Strategic Direction
•Achievements since February
•Questions from the floor
•Formal Business:
•Ordinary Resolutions
•Special Resolution
•Close of meeting, refreshments
3

Review of 2019

Key focus: our customers
1.Leverage the best of modern technology, particularly streaming services,
to deliver our content in ways that meet or exceed customer
expectations
2.Retain the rights that matter
3.Pursue partnerships: to be in the hands of all New Zealanders
4.Pursue alternate revenue streams
5

Martin Stewart, CEO
7

Sky’s Leadership Team
8
Martin Stewart
Chief Executive And Director
Steve Bayliss
Chief Marketing Officer
Justin Tomlinson
Advisor for Digital Products &
Technology
Chris Major
Director Of External Affairs
Chaz Savage
Chief Revenue Officer
Blair Woodbury
Chief Financial Officer
TexTeixeira
Director of Sport, Broadcast
and Entertainment
Sophie Moloney
Chief Legal, People &
Partnerships Officer
PrabhuSingh
Director of Technology

The world is changing and we’re transforming our business
9
Challenging year, however,
FY19 Performance Better
than Guidance
•Adjusted earnings exceeded guidance at $97.4m
•Growth in streaming subscribers greater than loss in DTH
•16% growth in streaming and commercial revenues
One Off Accounting Items
•$670m goodwill impairment charge -non-cash and
doesn’t impact bank covenants
•$38m IVP write-off reflecting focus on streaming
•$6m content write-off
•$5m redundancies and strategic consultancy in FY19
Rebalancing to streaming
future
•Observed good cost control
•FY19 capex below 5 year average

The world is changing and we’re transforming our business
10
Strengthened our balance
sheet
•Reduced debt levels by a further $43m
•$88m drawn down against banking facility at 30 June
•Acquired RugbyPassfor US$40m, $10m from banking
facility and $20m in new share issue (and further $10m
after earn-out period)
Investing to grow•No final dividend (interim dividend of 7.5 cents per share)

Our strategy isto grow our business by
accelerating our focus on streaming services while
continuing to super-serve all Sky customers
Our ambition isfor Sky to be in the hands of
every New Zealander
Strategic Direction

Strategic Pillars for Growth
12
Doing right by our
people by focusing
on our capability,
capacity, culture and
community
Through trusted
partnerships and
our own original
content, we deliver
great sport and
entertainment
content to
New Zealanders
Delivering great
content to our
customers on all
available platforms
and devices
That means premium
quality broadcasting
across all platforms,
with a laser focus on
satisfying all our
customers’ needs
Our contentOur peopleOur productsOur customers
Being clear on our
customer promise
and delivering on it
every time to rebuild
trust and confidence
in our brand
A truly customer and
data led business

Strategic Direction
•Investing in the right areas –‘invest to grow’, but with prudent
expenditure and prioritising the right projects
•Genuinely open to wholesaling and partnering
•Ambitiously looking at adjacent markets and new revenue
streams
13

Priorities for the next 12 months
Keep delivering on our promise to customers:
•All platforms and devices
•‘Love the base’
Extend our lead as New Zealand’s premier streaming provider:
•Sky Sport Now –12 HD channels of sport
•Neon, with enhancements and new pricing
•Sky Go
•Developments to come in the Sky Digital space
14

Priorities for the next 12 months
Win the rights that matter:
•Revolutionary SANZAAR rights deal
•Top tier international cricket events with ICC
Our position of strength:
•Largest paying subscriber base in New Zealand
•Only player that can reach every kiwi across streaming, satellite and
free-to-air
•World-leading production and broadcast
•A team that knows how to ensure high quality, high reliability delivery
•Recent deals: Rugby Sevens, NZ Open golf, Cricket Australia
15

Priorities for the next 12 months
Win the rights that matter –entertainment:
•We offer our customers the best content from many of the world’s
leading studios
•New Sky Movies Family channel
•Award-winning children’s channel CBeebiesfrom the BBC
16

Priorities for the next 12 months
-Build on our commitment to local content
-Continue evolving and simplifying our business
•The Whole Game –all levels of kiwi sport
•Our sport partners know they can rely on us to nurture and
showcase their sports at all levels
-Keep delivering on our Home of Sport commitment:
17

Your questions
Shareholders and proxies may ask
questions
Please use the microphone, and
provide your name

Voting on Resolutions

Ordinary Resolutions
1.That the Board be authorised to fix the auditors’ remuneration
20

Ordinary Resolutions
2.That Martin Stewart be re-elected as a director of the Company
21

Ordinary Resolutions
3.That Philip Bowman be re-elected as a director of the Company
22

Ordinary Resolutions
4.That Joan Withers be re-elected as a director of the Company
23

Ordinary Resolutions
5.That the Company issue to Martin Stewart 800,000 share rights in the
Company on the terms and conditions set out in the explanatory notes
24

Ordinary Resolutions
6.That the prior issue of 25,085,408 shares by the Company to
RugbyPassInvestors, LLC on the terms and conditions described in the
explanatory notes is approved and ratified
25

Special Resolutions
7.That Shareholders approve the SANZAAR Rights Transaction as
described in the explanatory notes on terms acceptable to the Board
and authorise the Directors and Company’s senior executive to take all
actions and do all things including negotiating terms and executing all
documents and agreements necessary or desirable in connection with
the SANZAAR Rights Transaction
26

Special Resolutions
8.That the existing constitution of the Company be revoked and a new
constitution, in the form referred to in the explanatory notes, be adopted
with effect from the close of the meeting
27