Transcript INDEPENDENT NEWS & MEDIA PLC

INDEPENDENT NEWS & MEDIA PLC
Interim Results
September 6th, 2000
LEADING MEDIA BRANDS
Republic of Ireland
• No. 1 National Publisher
Portugal
• No. 1 Regional Publisher
• No. 1 Newspaper
Publisher
• No. 1 Newspaper/ Magazine Distributor
• No. 2 Cable Operator
United Kingdom
Hong Kong
•The Independent, Independent on Sunday
• No. 2 Transit
Advertiser
•No. 1 Publisher in Northern Ireland
•No. 1 Recruitment Magazine Publisher
•No. 1 Paid-For Regional Publisher in London
New Zealand
• No. 1 National Publisher
• No. 1 Regional Publisher
• No. 1 Radio Operator
• No. 1 Commercial/
Security Printer
South Africa
•No. 1 Publisher
Australia
•No. 1 Regional Publisher
•No. 2 Radio Operator
•No. 1 Outdoor Operator
LEADING MEDIA BRANDS
• Dominant Media Company in 4 of 5 Markets
• Market Share > 50%
• Over 200 Newspaper Titles
• Over 48m Readers per Week
• Largest Radio/ Outdoor Advertising Operator in Australasia
• Fast-growing New Media Division
HIGHLIGHTS 2000
• Strong Operating Performances from all Divisions
– Advertising market share advances
– Circulation market share advances
• Growth in Core Operating Margins
• Significant New Media Developments
Subsequent to Half Year
• Successfully Acquired Belfast Telegraph Group
- Financed out of Euro 1bn Syndicated Bank Facility
HEADLINE NUMBERS
2000
Euro'm
1999
Euro'm
Turnover
629.4
525.7
19.7%
Operating Profit *
101.2
82.6
22.5%
Profit Before Tax
74.5
61.0
22.1%
Net Profit
38.5
32.8
17.4%
EPS **
8.33c
7.04c
18.3%
DPS
2.50c
2.22c
12.6%
514.5
501.5
Weighted shares outstanding (m)
* Continuing activities before exceptionals
** Before exceptional items and amortisation
Change
%
SUMMARY BALANCE SHEET
30 June
2000
Euro'm
30 June
1999
Euro'm
2,120
2,046
49
26
Net Debt **
(967)
(850)
Total Shareholders' Funds
1,202
1,222
Interest Cover (EBITDA/ Interest)
4.7x
4.6x
Net Debt to EBITDA
3.8x
3.9x
Fixed Assets *
Other Net Assets
* Including the revalued elements of mastheads
SUMMARY CASH FLOWS
2000
Euro'm
OPERATING PROFIT
Share of Associates & JVs
Depreciation & Amortisation
101.2
(0.7)
24.1
1999
Euro'm
Change
%
82.6
22.5%
(1.3)
18.7
-46.2%
28.9%
EBITDA
124.6
100.0
24.6%
Working Capital Movements
(10.6)
(13.4)
-20.9%
OPERATING CASH FLOW *
114.0
86.6
31.6%
Operating Cash Flow Conversion *
* Excluding restructuring payments
91%
87%
5.6%
SEGMENTAL PROFILE
Turnover by Market – H1 2000
Total: Euro 629.4m
South Africa
15%
Ireland
25%
UK
13%
New
Zealand
22%
Australia
EBIT by Market – H1 2000
Total: Euro 101.2m
25%
Ireland
South Africa 9%
New Zealand
24%
Australia
31%
36%
5 YEAR PERFORMANCE – GROSS ASSETS
Gross Assets * (Euro’m)
C.A.G.R. + 28%
3,000
2,500
2,000
1,642
2,437
2,488
1999
2000
1,818
1,500
1,000
935
500
0
1996
* including mastheads
1997
1998
5 YEAR PERFORMANCE – TURNOVER
Group Turnover (Euro’m)
C.A.G.R. + 28%
700.0
629.4
600.0
525.7
500.0
367.2
400.0
300.0
396.5
231.7
200.0
100.0
0.0
1996
1997
1998
1999
2000
5 YEAR PERFORMANCE – OPERATING PROFIT
Operating Profit (Euro’m)
C.A.G.R. + 30%
120.0
101.2
100.0
82.6
80.0
65.2
70.5
60.0
40.0
35.1
20.0
0.0
1996
1997
1998
1999
2000
5 YEAR PERFORMANCE – EARNINGS PER SHARE
Earnings per Share (cents)
C.A.G.R. + 17%
(Fully diluted before exceptionals & goodwill amortisation)
9.00
8.33
8.00
7.04
7.00
6.29
6.00
5.00
5.16
4.45
4.00
3.00
2.00
1.00
0.00
1996
1997
1998
1999
2000
5 YEAR PERFORMANCE – DIVIDENDS PER SHARE
Dividends per Share (cents)
C.A.G.R. + 14%
3.00
2.50
2.50
2.22
1.91
2.00
1.50
1.46
1.65
1.00
0.50
0.00
1996
1997
1998
1999
2000
DIVISIONAL PERFORMANCES
NEW ZEALAND
Euro Millions
Turnover
EBITDA
OPERATING PROFIT
Operating Margin
2000
1999
140.0
34.1
25.4
18.1%
104.1
28.5
20.2
19.4%
Turnover by Activity
1%
9%
19%
71%
Publishing
Performance Drivers
Turnover
EBIT
+ 34.5%
+ 25.7%
Commentary:
First time consolidation of TRN - radio - impacts on
operating margin. Underlying margins increase.
Increased market shares & disciplined cost control.
NZ Herald wins major editorial awards.
Harnessing online our valuable newspaper brand.
Economic growth forecast at 2% to 3%.
Printing
New Media
Radio
Publishing
Circulation Market Share up to 41.5%
1 National: New Zealand Herald
8 Daily Regionals/ 30 communities
Growth in NZ Herald circulations
Total weekly circulation volumes up 1.7% to 1.3m
Total Advertising Market Share up to 9.9%
Newspaper - NZ Herald
National market share up to 68.5%
Classified market share up to 53.5%
Recruitment market share up to 83%
Magazines
Woman's Weekly: 110,000 copies per week
Listener: 85,000 copies per week
NEW ZEALAND
Commercial Print
Largest Commercial Printer
8 dedicated divisions, covering all market segments
Security Plastics excellent performance from New
Zealand drivers licence contract & expansion
into Australia
Radio
Largest Radio Operator (55 stations)
Market share expanded to 51%; reach to 57%
EBIT more than doubled
1.5m listeners & strong survey results
Continued benefits of rationalisation
New Media
NZ Herald site award winner
7.2m page impressions/ month
UBD online directories & mapping launched
AUSTRALIA
Euro Millions
Turnover
EBITDA
OPERATING PROFIT
Operating Margin
2000
1999
159.5
40.6
32.0
20.1%
127.3
29.7
25.1
19.7%
Turnover by Activity
48%
24%
1%
27%
Publishing
Performance Drivers
Turnover
EBIT
+ 25.3%
+ 27.5%
Commentary:
Double-digit growth from all operating divisions.
Regionals - cost savings from shared services.
Outdoor - continued strong EBIT growth.
Radio - good result in a strong market.
Expect 8th successive full year of profit growth.
Outdoor
New Media
Radio
Publishing
Largest Regional Publisher
14 paid-for dailies; 50+ non-dailies
Paid-for circulations up 0.3%
Paid-for penetration approx. 60%
Successful integration of Gympie Times
Advertising Revenue Growth
Classified revenue up 9%
National/chain revenue up 39%
Local revenue up 10%
Shared Services Centre
AUSTRALIA
Radio
Largest Operator in Australasia
Market share of 25% in Australia
Listeners + 4m with strong ratings
Buoyant radio market
World Movies: 167,000 subscribers
Outdoor
Largest Outdoor Operator: 60%+ share
All 4 divisions advanced strongly: EBIT + 85%
Mainstream medium
Increased share of advertising dollar
Successful launch of Cody & Buspak in Asia
Buspak & Adshel rolled out in New Zealand
New Media
No. 1 regional classified website - checkout.com.au
No.1 commercial radio website - 961.com.au
Soprano (25% stake) signed a major contract with
Telstra
PeakHour stake increased to 15%
Investment in TIAG (51% stake)
SOUTH AFRICA
Euro Millions
Turnover
EBITDA
OPERATING PROFIT
Operating Margin
2000
1999
92.3
12.0
9.5
10.3%
83.3
10.6
8.9
10.7%
1%
99%
Publishing
Performance Drivers
Turnover
EBIT
Turnover by Activity
+ 10.8%
+ 6.7%
Commentary:
Expenditure well controlled, benefitting from the
successful restructuring.
Positive Balance of Trade.
Reserve Bank up-beat on economic growth.
Group well placed to take advantage of up-turn.
New Media
Publishing
Circulation
Metropolitan market share up to 65%
14 leading titles:
All titles ABC (circulation) up in H1 2000
All daily competitors showing circulation declines
Strong readership results H1 2000
Market share up to 68%
Advertising market share maintained
Classified market share up 4.4% to 50%
Display market share up to 36%
SOUTH AFRICA
Magazines
Joint venture with Conde Nast Magazines
House & Garden profitable - in its 2nd year
GQ building on last year's successful launch
New Media
iTouch successfully exported from SA
iol.co.za website - Africa's most visited news
site with 4.7m page impressions per month
UNITED KINGDOM
Euro Millions
2000
1999
Turnover
EBITDA
OPERATING PROFIT
84.2
1.0
0.1
71.4
(2.3)
(3.0)
Turnover by Activity
18%
2%
62%
18%
Nationals
Performance Drivers
Regionals
Magazines
New Media
Nationals
Turnover
Losses eliminated
+ 17.9%
Commentary:
Nationals - 3 year turnaround on plan.
Regionals - Performing to expectations.
Magazines - Highly competitive environment.
New Media - Strong performance.
Total circulation market share up to 9.5%
Total advertising market share up to 19.0%
- Strong advertising revenues - up 21% H1 2000
Move to new offices in 2nd half
Regionals
Advertising revenue up 7%
Further margin improvement
Magazines
Advertising revenue up 7%, principally as a result
of new product development
UNITED KINGDOM - NEW MEDIA
independenceavenue.com
lam-online.com
Key Statistics:
• Top 10 UK content Website
• 14 million combined page
impressions per month
for UK group
careerworld.net
independent.co.uk
mba-direct.com
executives-direct.com
londoncareers.net
H2 Developments:
• Belfasttelegraph.co.uk
• SME site
• Student site
• Joint sites with iTouch
• Classifieds online
BELFAST TELEGRAPH ACQUISITION
Publishing
Background
• Founded in 1870
• Northern Ireland’s leading daily
newspaper
• Acquired from Trinity Mirror in
July 2000
• Competitive bid process – 17
round & 5 2nd round bidders
• Belfast Telegraph circulation: 117,000
(Mon. – Sat.)
• Over 50% home delivered
• Sunday Life circulation: 95,000
1st
• Consideration of Stg£295m
• Other titles: Communities, Farm
Trader, Ads for Free
Printing
• Earnings enhancing in 1st year
• Substantial contract printer
• Moves IN&M into the top 10 UK
regional publishers
• 2 Goss Metroliners (double-width)
• Freehold premises
New Media
• No. 1 site with 4.5m page impressions
BELFAST TELEGRAPH ACQUISITION
Key Characteristics
Future Prospects
• Unique metropolitan franchise
• Significant revenue growth envisaged
• Excellent track record
• Double digit advertising growth
• Proven management/editorial
• New product development
team
• Strong growth prospects
• Dynamic new media resource
• The weekend opportunity
• Group editorial resource
• Economies of scale
• Enhanced printing resource
• Further expansion opportunities
IRELAND
Euro Millions
Turnover
EBITDA
OPERATING PROFIT
Operating Margin
2000
1999
153.4
40.8
37.4
24.4%
139.6
36.2
33.5
24.0%
Turnover by Activity
2%
23%
75%
Publishing
Performance Drivers
Turnover
EBIT
+ 9.9%
+ 11.6%
Commentary:
Continued strong growth across all divisions.
Market share gains in all categories.
All titles well positioned for new Euro 60m full colour
production facility.
Citywest project 1 month ahead of plan & on budget.
Distribution
New Media
Publishing
Circulation Market Share 52% (including imports)
No. 1 Publisher in each newspaper category
No. 1 Regional Publisher: 11 titles (40% share)
Buoyant circulations:
- Irish Independent 17 year high
- Total avge. volumes up 0.2% to 1.2m
Advertising Market Share up to 54%
Classified strong: market share advances
IRELAND
Citywest Production Facility
Euro 60m investment
Full colour facility: IndoMAN press (64pp colour)
Integrated Mailroom: Ferag (260pp/ inserts/ mag)
Substantial Cost Savings
Headcount halved to 63 operatives
Elimination of all colour pre-printing
Distribution
Leading newspaper & magazine wholesaler
New Media
Unison portal - via set top box for TV - launched
March launch: 30,000+ subscribers
PHL -- Irish Multi-channel over 250,000
subscribers
NEW MEDIA
Independent Digital
DIGITAL eVOLUTION
Euro Millions
2000
Turnover
Operating Losses
4.8
(6.8)
Total Investment to Date
Value of Quoted Investment
65
160
Statistics:
Group Web Sites
Group Page Impressions per month
50
61m
Digital Strategy/ Execution
Staged e-Volution: " A HYPE-LESS FUTURE"
1.
Understand/ enforce regulatory/ copyright issues
2.
Identified 5 Areas of Strategic Focus/ Execution
3.
Utilised Ads & Content for equity as "currency for investment"
4.
Leveraged our leading media assets/ brands in the online space
5.
Invested in appropriate technology to perform infomediary role across
all communication platforms
INDEPENDENT DIGITAL *
internet - portal
business 2 business
Australia
wap/ sms cellular
Ireland
United Kingdom
New Zealand
Ireland
Ireland
Australia
Australia
education
South Africa
Ireland
United Kingdom
* denotes country of origin/ not served markets
Ireland
telephony
Ireland
Northern Ireland
United Kingdom
Ireland
Ireland
CABLE DIVISION - PHL
Details
Ireland's 2nd largest cable/ TV transmission operator
- jointly owned (50:50) by INM and Liberty Media (USA)
- 250,000 subscribers
- 650,000 homes passed (60% of all homes in Ireland)
- exclusive licence franchise areas
Acquired CMI & Suir Nore in H1 2000
Launched Unison ISP in conjunction with INM
Awarded wireless local loop licences for broadband & narrowband
Euro 360m syndicated loan secured August 2000, facilitating:
- broadband, high-speed network build
- launch of full multi-media (bundled
Digital TV, Internet & telephony)
iTOUCH PLC
Background
1995:
1997:
1998:
1999:
2000:
Founded in Capetown by Wayne Pitout & Avi Azulai specialising in the
provision of packaged information content, corporate and commercial
services via fixed and mobile telephony.
Secured R&D contract with Vodacom - SA's largest mobile
network operator.
INM takes initial 20% stake.
INM builds stake to 70% (diluted to 50% post IPO).
iTouch services (including WAP portals) successfully launched in UK,
Ireland, Australia, New Zealand, South Africa and Israel.
- iTouch successfully brought to market (LSE) at Euro 320m valuation,
raising Euro 80m for business development / expansion.
Business Focus
-- Aggregate, package and transmit real-time information to cellular/ fixed
telephony consumers via WAP, SMS & IVR
-- Provide full interactivity via m & v-commerce
-- B2B Focus: Facilitating full-service Corporate Connectivity
-- Key Relationships: Independent News & Media PLC & Vodafone Group
HEADLINE NUMBERS
2000
Euro'm
1999
Euro'm
Turnover
629.4
525.7
19.7%
Operating Profit *
108.0
82.6
30.8%
Operating Profit **
101.2
82.6
22.5%
Profit Before Tax
74.5
61.0
22.1%
Net Profit
38.5
32.8
17.4%
EPS ***
8.33c
7.04c
18.3%
DPS
2.50c
2.22c
12.6%
514.5
501.5
Weighted shares outstanding (m)
* Before New Media losses
** Continuing activities before exceptionals
*** Before exceptional items and amortisation
Change
%
SUMMARY
• Track record of unbeatable shareholder return
• Geographically diversified - with tight focus on core competencies
• Unique brand leadership positions - dominant in 4 out of 5 markets
• All divisions advancing well on 1999
• Belfast Telegraph acquisition - EPS enhancing
• Citywest development to further enhance Irish performance
• “Hype-Less” new media strategy delivering quantifiable results
• Increasing value of our Irish cable/ telephony business
SHAREHOLDER RETURN – Since 1973
479,000
Euro 1,000 invested in 1973
C.A.G.R. + 25%
190,500
128,500
47,500
1,000
3,900
8,500
1973
1978
1983
1988
1993
1998
2000
INDEPENDENT NEWS & MEDIA PLC
Interim Results
September 6th, 2000