Transcript Document
INDEPENDENT NEWS & MEDIA PLC
2000 Full Year Results 21st March, 2001 All figures in Euros unless otherwise stated
2000 HIGHLIGHTS
• • Strong performances in all markets Underlying circulations / readerships positive • • New € 60m full-colour Irish production facility operational Successful integration of the Belfast Telegraph Group • Chorus launches Ireland’s first Digital service • iTouch exceeds 1st year targets, after successful IPO • € 1 bn 5-year syndicated facility over-subscribed
GROUP PROFILE
Listing Information • Leading international media group with 5 main geographic markets • PLC listed on the Dublin, London and New Zealand Stock Exchanges • Market Capitalisation: € 1.5 bn (IR£1.2 bn) • Shareholder Profile: Board 4% Europe 8% USA 25% UK 12% Sir Anthony O'Reilly 27% Ireland 24% Turnover by Activity Publishing Electronic Outdoor Advertising 82% 9% 9%
2000 FULL YEAR RESULTS
HEADLINE NUMBERS
Turnover Operating Profit * Profit Before Tax Net Profit EPS ** DPS Weighted shares outstanding (m) Operating Margin *
* Continuing activities before exceptionals ** Before exceptional items and amortisation
2000
€ m
1,342.5
224.1
155.3
81.3
16.01
7.50
514.4
16.3%
(as restated)
1999 Change
€ m
% 1,168.4
187.4
137.7
65.4
14.9% 19.6% 12.8% 24.3% 14.49
6.66
505.8
15.6% 10.5% 12.6%
SUMMARY BALANCE SHEET
(as restated)
31 Dec. 2000 31 Dec. 1999
€ m € m
Fixed Assets * Other Net Assets/ (Liabilities) Net Debt Total Shareholders' Funds 2,584 56 (1,500) 1,140 2,092 (16) (868) 1,208 Interest Cover (EBITDA/ Interest) Net Debt to EBITDA 3.7x
5.7x
4.6x
3.9x
* Including the revalued elements of mastheads
SUMMARY CASH FLOWS
OPERATING PROFIT Share of Associates & JVs Depreciation & Amortisation EBITDA Working Capital Movements OPERATING CASH FLOW * Operating Cash Flow Conversion * 2000
€ m
204.8
10.8
47.3
262.9
(19.3) 243.6
93%
(as restated)
1999 Change
€ m %
185.6 10.3% (5.8) 286.2% 41.8 13.2% 221.6 18.6% (22.7) 15.0% 198.9 22.5% 90% 3.2%
* Excluding restructuring payments
GROUP TURNOVER BY MARKET
Turnover by Market -- 2000 Total: € 1,342.5m
United Kingdom 16% South Africa 14% New Zealand 21% Ireland 25% Australia 24%
GROUP PROFITS BY MARKET
Operating Profit by Market -- 2000 Total: € 224.1m
United Kingdom 6% New Zealand 24% South Africa 10% Ireland 29% Australia 31%
10 YEAR PERFORMANCE
Earnings per Share ( € ) (Fully diluted before exceptionals & goodwill amortisation) 16.00
14.50
13.00
11.50
10.00
8.50
7.00
5.50
4.15
4.00
'91
5.36
'92
7.02
'93
7.58
'94
8.88
10.20
'95
12.68
'96 '97
12.28
'98
14.49
'99
16.01
'00 • • • • • 10 Year C.A.G.R.
Turnover Operating Profit * Pre-Tax Profit + 24% + 31% + 36% Earnings Per Share + 16% Dividends Per Share + 16% * Excluding exceptional items
OPERATIONS REVIEW
NEW ZEALAND
COMPANY PROFILE
• No. 1 newspaper publisher New Zealand Herald 210,436 (+0.3%) 57% national daily market share Readership up 5.9% on last year • No. 1 regional newspaper publisher 8 paid for dailies/ 34 non-dailies • No. 1 commercial / magazine printer • No. 1 radio operator (66 stations) • No. 1 security printer (web/ plastics) • Turnover by Activity 1% 18% 62% 19% Publishing Printing Radio New Media
€ millions 2000 1999 Change Turnover EBITDA * Operating Profit * 282.4
72.0
55.4
253.3
66.5
49.9
11.5% 8.3% 11.0% Operating Margin *
* Excluding exceptional items
19.6% 19.7% 2000 PERFORMANCE DRIVERS
• Exceptionally strong Q1 - America’s Cup • Increased market share & tight cost control • Strong performance from Regional division • 48% Radio share and 55% audience reach • Trans-Tasman expansion of Security Printing
Wilson & Horton
2001 PROSPECTS
• Economic indicators positive: forecast economic growth for 2001 +2.5% forecast inflation falling to +1.1% forecast interest rates falling to 5.9% • Herald to benefit from full year cover price increase and lower distribution costs • Business Herald re-launch attracting new brand advertisers • Newsprint prices / supply fixed for 2001 • Full year impact of Security Printing’s Australian acquisitions and potential to expand
Asian export market
• Exports from regional New Zealand remain very buoyant
AUSTRALIA
COMPANY PROFILE
• No. 1 regional publisher in Australia Queensland and Northern NSW, comprising 14 paid dailies/ +50 non-dailies • No. 1 outdoor advertising company Supersites, transit, billboards and street furniture with 65% coverage • No. 1 radio operator with 11 metro-
politan stations with 4.5m listeners
• JV in Pan TV’s World Movies 177,000 subscribers • Turnover by Activity 21% 1% 42% 36%
€ millions 2000 1999 Change Turnover EBITDA * Operating Profit * 325.1
87.0
71.9
275.7
75.0
63.1
17.9% 16.0% 13.9% Operating Margin * 22.1% 22.9%
* Excluding exceptional items
2000 PERFORMANCE DRIVERS
• Good revenue growth in 1
st control in 2 nd half half & strong cost
• Exceptional performance from outdoor -
strong occupancies and yields
• Full year of Shared Services benefits • Broad base of activities Publishing Outdoor Radio New Media
APN News & Media
2001 PROSPECTS
• Economic indicators positive: - Forecast economic growth for 2001 +2.0% - Forecast inflation continuing at subdued levels of 3.0% - Forecast interest rates falling to 5.0% • Forecast advertising industry growth rates for 2001: Publishing + 3% Broadcasting + 4% Outdoor + 5% • Low Australian dollar boosting exports and Regional markets • Asian outdoor expansion to deliver immediate profits
SOUTH AFRICA
COMPANY PROFILE
• No. 1 newspaper publisher / printer
The Star
163,746 (+0.6%)
Saturday Star Sunday Independent Cape Argus Weekend Argus Cape Times Daily News Independent on Saturday Sunday Tribune
135,936 (+0.3%) 40,875 (+1.0%) 77,418 (+0.2%) 108,474 (+0.2%) 48,690 (+0.2%) 65,476 (+1.7%) 73,668 (+0.8%) 108,339 (+1.8%) All other titles reported circulation increases • Turnover by Activity 11% 1%
€ millions 2000 1999 Change Turnover EBITDA * Operating Profit * 189.1
28.7
24.3
177.3
26.6
22.2
6.7% 7.9% 9.5% Operating Margin * 12.9% 12.5%
* Excluding exceptional items
2000 PERFORMANCE DRIVERS
• Good growth in circulation - ALL titles up Competitors generally down • Increasing readership market share (68%) • Increasing advertising market share Display market share up to 41% Classified market share up to 50% • Cost increases held at half the inflation rate • Conde Nast magazine JV above expectations Publishing 88% Printing New Media
Independent News & Media (SA)
2001 PROSPECTS
• Economic indicators positive: Forecast economic growth for 2001 +3.5% - Forecast inflation falling to +7.0% - Forecast interest rates falling marginally to 14 .
0% • Forecast advertising industry growth rates for 2001: Newspapers + 8.5% • Newsprint prices/ supply fixed for 2001 • On-going focus on extending strong circulation and advertising market positions • Continued positive impact of reduced cost base following successful restructuring in
1999 and tight cost focus in 2000
UNITED KINGDOM
COMPANY PROFILE
• No. 4 quality broadsheet newspaper
publisher
The Independent
240,000
Independent on Sunday
270,000 • No. 1 newspaper publisher in Northern
Ireland
• No. 2 paid-for regional newspaper
publisher in Greater London area
• No. 1 recruitment magazine publisher • No. 1 educational courses publisher • Turnover by Activity 18% 1% 10% 14% Nationals Belfast Regionals New Media 57% Magazines
€ millions 2000 1999 Change Turnover EBITDA * Operating Profit * 210.0
16.1
12.4
151.6
(3.3) (5.1) 38.5% Operating Margin * 5.9% -3.4%
* Excluding exceptional items
2000 PERFORMANCE DRIVERS
• Nationals Highest circulation level & market share (9.6%) since 1997 Good growth in advertising (up 12%) New premises with significant cost savings • Regionals Margins at top-end of industry Circulation stabilised following market decline • Magazines Advertising growth & market share maintained
BELFAST TELEGRAPH
COMPANY PROFILE
• Acquired from Trinity Mirror in August
2000 for STG£292m
• Earnings enhancing in 1
st year
• No. 1 newspaper publisher
Belfast Telegraph
112,000
Sunday Life
95,000 • No. 1 contract printer 2 Goss Metroliners (double-width) • Turnover by Business Type 15% 1% Publishing Printing 84% New Media
FUTURE PROSPECTS
• Unique metropolitan franchise • Excellent track record Proven management / editorial team • Advertising growth despite overall UK
slowdown
Strong recruitment advertising enabling significant yield increases • Successful re-formatting of The Belfast
Telegraph and Sunday Life
Halted decline in circulation Enabled cover price increase • New product development • Group editorial resource • Enhanced printing resource
Independent News & Media (UK)
2001 PROSPECTS
• Economic indicators positive: - Forecast economic growth for 2001 +2.0% to 2.5% - Forecast inflation falling to +2.4% - Forecast interest rates 5.75% and possibly lower • Forecast newspaper advertising industry growth rates for 2001: - Nationals - Regionals + 3.2% + 1.0% • Full year impact of Belfast Telegraph acquisition • New centralised London operations and termination of out-sourced services
IRELAND
COMPANY PROFILE
• No. 1 newspaper publisher
Irish Independent The Star Evening Herald Sunday World Sunday Independent
168,200 95,171 101,200 314,022 308,600 • No. 1 regional newspaper publisher 11 titles with weekly circulation of 107,499 • No. 1 newspaper / magazine wholesaler • Turnover by Business Type 1% 23%
€ millions 2000 1999 Change Turnover EBITDA * Operating Profit * 335.9
74.1
66.4
310.5
66.4
59.4
Operating Margin * 19.8% 19.1%
* Excluding exceptional items
2000 PERFORMANCE DRIVERS
• Growing circulation & readership Market share of 51% (including imports) • Strong growth in advertising Revenue up 19% • Successful transition / implementation of
€ 60m Citywest development 8.2% 11.6% 11.8%
Publishing Distribution 76% New Media
Independent News & Media (Ire)
2001 PROSPECTS
• Economic indicators positive: Forecast economic growth for 2001 +8.0% - Forecast inflation falling to +4.0% - Forecast interest rates 4.25% • Successful commissioning / operation of
€ 60m Citywest development with full benefits achieved
lower production headcount colour out-sourcing eliminated explosive growth in colour volumes/ yield reduction in newsprint usage • Chorus - digital services roll-out
NEW MEDIA REVIEW
DETAILS …becoming Ireland's first fully integrated digital TV/ Telecoms network operator Ireland's 2nd largest cable/ TV transmission operator
- jointly owned (50:50) by INM and Liberty Media (USA) - 264,000 subscribers (54% Cable/ 46% MDS) - 555,000 homes passed (60% of all homes in Ireland) - exclusive licence franchise areas
Launched Ireland's first Digital TV Service - Nov. 2000 Launched first Digital TV MDS Service - worldwide - Nov. 2000
€
360m syndicated loan secured August 2000, facilitating:
- broadband, high-speed network build - full multi-media bundled Digital TV, Internet & telephony
NTL network: Roll-Out on hold Co-Owner with INM of Unison ISP
Chorus (Ire)
DIGITAL e-VOLUTION
e-Hype
• strip away the Hype • don’t “bet the bank” • leverage content &
marketing
e-Basic
• define strategic arenas • systems automation • cover downside
- manage classified migration - enforce copyright/ regulatory € Millions Turnover Operating Losses
e-Xecution
• brand extension @ marginal cost • marketing cross-promotion • limit cash investment (Ads for
Equity) 2000 7.7
(10.0) 1999 0.4
(2.1) Group Web Stats: No. of Web Sites Page Impressions / month Total Investment to Date Value of Quoted Investment Headcount 48 100m € 78m € 110m 203 34 34m
INDEPENDENT DIGITAL
internet - portals news sites sport classified entertainment financial travel e-commerce business 2 business mobile information education / databases broadband - digital TV - telephony
SUMMARY
• • Geographically diversified - with tight focus on core competencies Unique brand leadership positions - dominant in 4 out of 5 markets • Highly cash generative business • Clear strategy for operating margin enhancements • All divisions performing well • “Hype-Less” new media strategy • Increasing value of our Irish cable / telephony business
SUMMARY
• • • Belfast Telegraph acquisition - EPS enhancing Citywest development further enhancing Irish performance Track record of unbeatable shareholder return
SHAREHOLDER RETURN – Since 1973
€336,000 C.A.G.R. + 23%
OUTLOOK
• Core businesses performing well • Too early for current year forecasts because of uncertainty in global markets • Focus on cost containment • Group well positioned for future growth