Sky presentation to NZX Retail Investor Webinar

© SKY 2021
NZX Retail Investor
Presentation
8 March 2022

© SKY 2021
NZX Retail Investor Webinar
8 September 2022
Disclaimer
2
This presentation has been prepared by Sky Network Television Limited and its group of companies (“the Company”) for informational purposes. This disclaimer applies to this document and
the verbal or written comments of any person presenting it.
Information in this presentation has been prepared by the Company with due care and attention. However, neither the Company nor any of its directors, employees, shareholders nor any
other person give any warranties or representation (express or implied) as the to accuracy or completeness of this information. To the maximum extent permitted by law, none of the
Company, its directors, employees, shareholders or any other person shall have any liability whatsoever to any person for anyloss (including, without limitation, arising from any fault or
negligence) arising from this presentation or any information supplied in connection with it.
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 ofrisks, and uncertainties, including material adverse events, significant one-off expenses and other unforeseeable circumstances.
There is no assurance that results contemplated in any of these projections and forward-looking statements will be realised, nor is there any assurance that the expectations, estimates and
assumptions underpinning those projections or forward-looking statements are reasonable. 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 or to provide you with further information about theCompany.
The Company has used the non-GAAP financial measures of Free Cash Flow and EBITDA when discussing financial performance, as the directors and management believe that these
measures provide useful information on the underlying performance of the Company. Free Cash Flow is defined by the Company asnet cash from operating activities, less net cash used in
investing activities less payments for lease liability principal. EBITDA is defined by the Company as earnings before income tax, interest expense, depreciation, amortisationand impairment,
unrealisedgains and losses on currency and interest rate swaps. You should not consider this in isolation from, or as a substitute for, the information provided in the unaudited consolidated
financial statements for the six months ended 31 December 2021, or the audited consolidated financial statements for the year ended 30 June 2020, which are available at:
https://www.sky.co.nz/investor-centre/results-and-reports.
The information in this presentation is of a general nature and does not constitute financial product advice, investment advice or any recommendation. The presentation does not constitute an
offer to sell, or a solicitation of an offer to buy, any security and may not be relied upon in connection with the purchase or sale of any security. Nothing in this presentation constitutes legal,
financial, tax or other advice.
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© SKY 2021
NZX Retail Investor Webinar
8 September 2022
Nurture and grow
our Sky Box and
Streaming
customers
Our Strategy
Be the preferred
partner for
rightsholders,
content creators
and distributors
Grow revenues
and reduce
operating costs
Be a place where
our crew are
empowered to
do their best
work
Our Customers
CONTENTFINANCIALPEOPLE
We connect New Zealanders with the sport and
entertainment they love, in ways that work for them,
right across the country
WHAT
MATTERS
MOST:
CUSTOMERS
WHAT DO
WE DO:
WHAT
WE’RE
FOCUSING
ON:
THE “BEDROCK”
OF OUR BUSINESS:
Rapid and sustained execution,
and enabling our people to
succeed
Being an efficient, adaptive
and profitable business
1
2
3
4
12
3
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Sky at a glance –our
competitive advantage
Significant Sky Box customer base
-Reliable satellite delivery able to reach 100%
of New Zealanders
-High tenure and average revenue
Established and growing Streaming business in
both Entertainment and Sport
Strong content offering and aggregator
position in the New Zealand market
Talented and passionate customer focused
crew executing at pace on opportunities
Strong balance sheet position
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Keycontent runway secured
-Over 530 global and local partners
-Disciplined content strategy
-Strong partnership approach
-World class sports production
-Sky Originals creating local stories
Sky at a glance –our
content advantage
-Focusing on maximising significant
depth and value of content rights
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Customer relationships continuing to rise
-Sky Box customer base is stabilising
-Strong growth in streaming customers
Sky has reached a
positive inflection point
540
532
565
555
545
50
44
2
196
251
352
393
431
9
9
8
7
7
154
-
795
990
927
955
984
H1 FY20H2 FY20H1 FY21H2 FY21H1 FY22
SKY CUSTOMERS
Sky Box DirectSky Box ResellerStreamingCommercialLightbox Wholesale
-Stabilising Sky Box customers and
growing Streaming
TOTAL CUSTOMER
RELATIONSHIPS
+ 6%YOY
STREAMING
CUSTOMERS
1
+23%YOY
SKY BOX
CUSTOMERS
-3.8%YOY
1
Streaming customer groups comprise Neon, Sky Sport Now, RugbyPass subscriptions and Retransmission.
2
Lightbox
acquisition completed 31 Jan 2020.
2
1
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Customer relationships continuing to rise
Returned to revenuegrowth
-Sky Box revenue stabilizing
-Significant growth in Streaming
-Supported Commercial customers
through Covid
-[Opportunities to grow Advertising]
Sky has reached a
positive inflection point
26
19
22
22
23
H1 FY20H2 FY20H1 FY21H2 FY21H1 FY22
ADVERTISING ($m)
27
19
20
24
23
0
10
7
4
4
H1 FY20H2 FY20H1 FY21H2 FY21H1 FY22
COMMERCIAL ($m)
COVID Discounts
25
34
36
37
48
0.0
10.0
20.0
30.0
40.0
0
20
40
H1 FY20H2 FY20H1 FY21H2 FY21H1 FY22
STREAMING
2
($m)
13%
6%
6%
299
283
271
261
262
H1 FY20H2 FY20H1 FY21H2 FY21H1 FY22
SKY BOX
1
($m)
71%
of total
Revenue
-Delivering core revenue growth
1
Sky Box revenue includes an initial contribution from Sky Broadband.
2
Streaming revenue includes Neon, Sky Sport
Now, Rugby Pass subscriptions and Vodafone Retransmission. Note: Total Revenue includes Other Revenue of $15m.
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Customer relationships continuing to rise
Returned to revenue growth
Significantpermanentcost reductions
-Laser focus on cost reduction as we
step into higher rights costs
-Transformational cost reset across all
operating and capex lines in FY22
-Further permanent savings to come in
FY23
Sky has reached a
positive inflection point
-Achieving $40 -$45m in additional
savings in FY22
$m
Original FY22 guidance
1
25 August 2021
Revised FY22 guidance
1
7 December 2021
Revenue715 -745725 -745
EBITDA115 -130150 -160
NPAT17.5 –27.540 –48
Capex50 -6045 -50
1
Based on the Company’s best estimates of the realisable savings which are subject to delivery, and no adverse change
in operating conditions, including future economic impacts flowing from Covid-19, or any extraordinary items or
accounting changes (e.g.the potential impact of SaaS). Guidance excludes the impact from any expected gain on sale
of Sky’s Mt Wellington properties.
Guidance upgrade provided December 2021:
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Customer relationships continuing to rise
Returned to revenue growth
Significant permanent cost reductions
Returning to paying dividends from FY22
following:
-improved and sustainable performance,
including faster return to sustainable
free cash flows
-increased medium-term certainty over
the majority of key content rights
Sky has reached a
positive inflection point
1
Free Cash Flow is defined as net cash from operating activities, less net cash used in investing activities less
payments for lease liability principal.
Sky’s Board expects to resume paying dividends
commencing with a final dividend in September
2022, consistent with this dividend policy
To distribute between 50% and 80% of
Free Cash Flow
1
(excluding one-off items)
-Sky’s Dividend Policy:
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Customer relationships continuing to rise
Returned to revenue growth
Significant permanent cost reductions
Returning to paying dividends from FY22
Balance sheet strength providing
opportunity to explore investment options
-Strong cash balance and with property
sale proceeds expected in March
Sky has reached a
positive inflection point
-to accelerate the growth of the business
-generate new revenue streams
-deliver improved returns for shareholders
A further update on capital management will be
provided at Sky’s investor day in June 2022
Any decisions on capital structure, including details
of any potential capital return, will be subject to
market conditions and any other strategic
opportunities that may arise
-Management and the Board are
continuing to assess opportunities
to invest capital
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Sky’s next-generation Box is on target to
be in customer homes in mid-2022
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Key content runway secured providing increased certainty
Customer relationships continuing to rise
Returned to revenuegrowth for the first time in some time
Significant permanentcost reductions in FY22 with more to
come
Returning to paying dividends from FY22 following a faster
return to sustainable free cash flows
Balance sheet strength providing opportunity to explore
investment opportunities
Executing at pace on the
opportunities ahead of us
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