Transcript Independent Newspapers, PLC

INDEPENDENT NEWS & MEDIA PLC
1999 Interim Results
2nd September 1999
All numbers in Euros
1st Half Highlights
Headline Numbers
1999
Euros
Turnover
1998
Euros
Change
%
525.7m
396.5m
+32.6%
Operating Profit
82.6m
68.7m
+20.2%
Profit Before Tax
61.0m
41.5m
+47.0%
Net Profit
32.8m
25.9m
+26.6%
EPS
13.08c
10.44c
+25.3%
DPS
4.44c
3.81c
+16.5%
Turnover By Market
Turnover by Market - 1999
Total : Euro 555m *
UK
13%
New
Zealand
21%
Ireland
27%
Australia
23%
South
Africa
16%
* Including Group share of joint ventures and associates
Profit by Market
Operating Profit by Market - 1999
Total : Euro 83m *
Ireland
39%
Australia
28%
New
Zealand
23%
S.A.
10%
* Excluding exceptional items, but including Group share of joint ventures and associates
Summary Balance Sheet
Fixed Assets *
Other Net Assets
1999
Euro ‘m
2,046
1998
Euro ‘m
1,516
26
36
Net Debt
(850)
(645)
Total Shareholders’ Funds *
1,222
907
Interest cover (EBITDA/Interest)
4.6x
3.0x
Net Debt to EBITDA
3.9x
3.6x
* Including the revalued element of mastheads
Summary Cash Flow
1999
Euro ‘m
82.6
82.6
(1.3)
18.7
100.0
1998
Euro ‘m
68.7
3.4
72.1
(7.2)
16.4
81.3
Operating cash flow *
86.6
52.4
Operating cash flow conversion (%)
87%
65%
Operating profit
Restructuring costs
Share of Associates & JV’s Results
Depreciation & Amortisation
EBITDA
* excluding restructuring payments
Corporate Activity
• Acquired 100% of South African business
• Increased stake in Australia to 41%
• Issued 10 Year Euro200m Eurobond at 5.75%
• Change of name to reflect overall media focus
Key Operational Drivers
• Strong recovery in key currencies
• Returned to double-digit growth in Irish operations
• Recovery of New Zealand economy
• Strong performance from Australian operations
• Efficient treasury and tax management
• Group-wide restructuring successfully implemented
Restructuring
• 83% of total planned headcount reduction achieved
• Ireland - new print plant to be operational by Q4 2000
• New Zealand - Significant progress on all initiatives
• South Africa - Commercial initiatives almost complete
and the longer-term editorial initiatives underway
• Overall, on-track to achieve planned savings
Operating and Financial
Performance
Australia
Brisbane
Perth
Sydney
Adelaide
Canberra
Melbourne
Australia
1999
Euro ‘m
1998 *
Euro ‘m
Change
%
Turnover
127.3
122.1
+4.3%
EBITDA
29.7
26.8
+10.9%
Operating Profit
25.1
22.1
+13.9%
Margin (%)
19.7%
18.1%
Exceptionals
-
-
* including 100% of ARN
• Revenue split …
A
U
S
T
R
A
L
I
A
Publishing
25%
48%
27%
Outdoor
Electronic
• Double digit EBIT growth in all divisions
• Publishing - improved local revenues, cost initiatives
& circulation pick-up
• Electronic - Local revenue gains & cost reductions
• Outdoor - 46% EBIT growth
• Best 5 year EPS growth of 8 largest media companies
• Forecasting 7th year of net profit & dividend growth
New Zealand
Auckland
Wellington
Christchurch
New Zealand
1999
Euro ‘m
1998 *
Euro ‘m
Change
%
Turnover
104.1
106.3
-2.1%
EBITDA
28.5
29.0
-1.6%
Operating Profit
20.3
21.1
-4.0%
Margin (%)
19.5%
19.5%
Exceptionals
* based on continuing operations
-
(1.4)
N
E
W
Z
E
A
L
A
N
D
• Revenue split ...
8%
Publishing
92%
Electronic
• Strong performance in Quarter 2 1999
• NZ Herald - advertising market share gains
• Successful launch of Hawkes Bay Today
• Significant benefits from restructuring
• Strong performance from Radio operations
• Forecasted upswing for 2nd half
United Kingdom
London
United Kingdom
1999
Euro ‘m
1998 *
Euro ‘m
Change
%
Turnover
71.4
77.4
-7.7%
EBITDA
(2.3)
1.4
Operating Profit
(3.1)
0.5
Margin (%)
-4.4%
0.6%
Exceptionals
*based on 100% of UK operations
-
(0.9)
U
N
I
T
E
D
K
I
N
G
D
O
M
• Revenue split ...
Publishing
1%
99%
Electronic
• Good start to 1999
• Independent turnaround:
•Only UK broadsheet to record circulation growth
•Circulation share up to 9.5%
•Group editorial epicentre
•New Editor named Editor of the Year in March
• Regionals & Magazines: performing strongly in a
competitive marketplace
Ireland
Dublin
Limerick
Cork
Ireland
1999
Euro ‘m
1998
Euro ‘m
%
Change
Turnover
139.6
127.0
+9.9%
EBITDA
36.2
32.8 +10.5%
Operating Profit
33.5
30.3 +10.7%
Margin (%)
Exceptionals
24.0%
-
23.8%
(0.9)
• Revenue split ...
92%
I
R
E
L
A
N
D
8%
Publishing
Electronic
• Strong advertising growth and enhanced market
share
• All titles increased circulation (H1’99)
• Launch of Sunday colour magazine
• Value of cable business growing
• Continued economic growth forecast
• New printing plant on schedule
South Africa
Pretoria
Johannesburg
Kimberley
Durban
Cape Town
South Africa
1999
Euro ‘m
1998
Euro ‘m
Change
%
Turnover
83.3
98.4
-15.3%
EBITDA
10.6
13.9
-23.3%
8.8
12.0
-26.6%
Operating Profit
Margin (%)
Exceptionals
10.5%
-
12.2%
(0.6)
S
O
U
T
H
A
F
R
I
C
A
• Revenue split ...
Publishing
1%
99%
Electronic
• Circulation increase for The Star
• Readership increases across all titles in Gauteng and
KwaZulu Natal
• Significant benefits from restructuring
• Planned launch of GQ with Conde Nast
• Well positioned for the economic recovery
Independent Digital
Creatively led;
Commercially driven
Digital Mission
• We recognise the mobility of our 45 million daily
consumers, and will invest in digital technology to
perform the Infomediary role across all
communication channels
Digital Mission
• Independent Digital leverages the Group’s local,
national & international content as well as new
content produced and packaged specifically for
digital distribution
Digital Mission
• Our media investments will act as a potent signpost
to our digital activities, and accelerate our
ambition to become key global destination sites
Current Activities
• Significant investment to date
• Current global activity: 40+ sites
20m page impressions/month
• Broad coverage of key destination categories:
News
Current Affairs
Entertainment
Music
Recruitment
Merchandising
IT
Financial
Classifieds
Directories
Future Expansion
• E-commerce engines / e-commerce enabled sites
• Identifying the next e-categories and making strategic
investments
• Potential links with global entertainment player
• Potential links with global online auction player
• Business-to-business investments
Future Expansion
• Consumer and business ISPs
• Ads-for-equity investments produce equity
opportunities with significant potential upside
• Investment in global technology solutions that will
enhance our ability to reach new markets, including
areas such as copyright protection, database
technologies and e-commerce mechanisms
Telephony
• Independent Digital’s global rollout of InTouch as part
of 3rd generation SMS and WAP technology
– Banking
– Gaming
– Ticketing
– Trading
• Expansion of existing telephony activities into more
broad-based telecommunications, eg. call cards,
account-based residential, mobile services & SMEs
• Facilitates entry to internet telephony
Group Strategy & Outlook
Group Strategy
• Geographically diversified
• Tight focus on CORE competencies
• Brand market leadership positions
• Margin enhancements
• Primary content provider across diverse media
platforms
Targets
• Target 20%+ Operating Margins
• Migrate into revenue & profit enhancing New Media
opportunities
• Deliver double-digit earnings growth
• Enhance shareholder value
Outlook for 2nd Half
• Strong performance from New Zealand economy
• Strong performance from Irish economy
• Strong performance from Australian economy
• Recovery in South African economy
• Further circulation improvements in the UK
• Significant benefits from restructuring
• On-track for double-digit earnings growth
Independent News & Media PLC