Transcript Independent Newspapers, PLC

Independent Newspapers, PLC
1998 Full Year Results
24th March 1999
All numbers in Euro
Introduction
Liam P. Healy
Group Chief Executive
Independent Newspapers, PLC
United Kingdom
Ireland
Portugal
Mexico
Australia
South Africa
New Zealand
Introduction
UK
• A broadly based international
media group
Ireland
• Interests in newspapers,
magazines, outdoor
Portugal
advertising and electronic media
Mexico
• No. 1 newspaper publisher in 3 of our 5 key country
markets
Australia
• Publish 160 titles a week
over 15 million copies
Southselling
Africa
New Zealand
• Owner of the flagship Independent title in the UK
Introduction
• Largest regional newspaper, radio
and outdoor
UK
Ireland
operator in Australasia
Portugal
• Joint owner (with
TCI) of Ireland’s 2nd largest
cable
Mexico operator
• Currently bidding for Ireland’s largest cable
operator (Cablelink)
Australia
• Strategic migration into
new
electronic media
South
Africa
platforms
New Zealand
Independent Newspapers, PLC
Earnings Per Share €
(Fully diluted before exceptionals &
goodwill amortisation)
30
25.36 24.56
25
20.39
20
17.75
15.16
15
10
5
0
'94
'95
'96
'97
'98
5 Year C.A.G.R.
• Turnover
• Operating Profit
• Pre-tax Profit
• Earnings Per Share
• Dividends Per Share
+29%
+31%
+21%
+13%
+16%
Highlights
James J. Parkinson
Group Finance Director
Highlights
• Adverse currency movements
• Weakness in southern hemisphere (NZ and SA)
economies
• Buoyant Irish economy
• Acquired 100% of flagship UK Independent titles
• Successful disposal of Sirocco
• All embracing restructuring to fundamentally lower
Group cost base
Headline Numbers
% Change
Constant
Currencies
% Change
Actual
799m
142m
+10.9%
+3.6%
+5.1%
-4.6%
1998
1997
% Change
20.9%
25.36c
9.90c
-3.2%
+15.4%
1998
€
Turnover
Operating Profit*
Operating Margin* 18.2%
EPS**
24.56c
DPS
11.43c
* continuing operations, excluding exceptionals
** fully diluted, excluding exceptionals and amortisation of goodwill
Overview
Turnover by Market - 1998
Total : € 936m*
Turnover by Business
UK
14%
Other
2%
New
Zealand
24%
Ireland
32%
South
Africa
20%
• Outdoor Advertising
4%
• Electronic Media
4%
• Publishing
Australia
8%
* Including Group share of joint ventures and associates
92%
Overview
Operating Profit by Market - 1998
Total : € 145m *
Operating Profit by Business
Ireland
40%
Other
2%
New
Zealand
31%
South
Africa
18%
• Outdoor Advertising
4%
• Electronic Media
5%
• Publishing
91%
Australia
9%
* Excluding exceptional items but including Group share of joint ventures and associates
Summary Balance Sheet
1998
€m
1997
€m
1,121
225
141
1,167
249
149
28
9
(82)
(17)
(568)
(533)
Total Shareholders’ Funds
865
1,024
Interest cover (EBITDA/Interest)
3.5x
4.4x
Fixed Assets
Intangible
Tangible
Financial
Working Capital
Provisions & Long-Term Creditors
Net Debt
Summary Cash Flow
Operating profit
Restructuring costs
Share of Associates & JV’s Results
Depreciation & Amortisation
EBITDA
Operating cash flow
Operating cash flow conversion (%)
1998
€m
90
54
144
(16)
34
162
1997
€m
143
9
152
(9)
33
176
129
144
80%
82%
Operating and Financial
Performance
Australia
Turnover
EBITDA
Operating Profit
Margin (%)
Exceptionals
* 100% of APN
1998*
€m
251.6
57.5
49.7
% Change
Constant
Currencies
+9%
+8%
+8%
1998*
1997*
19.8%
-
19.8%
-
% Change
Actual
-2%
-2%
-2%
Australia
Turnover Split *
Publishing
50%
Electronic Media
27%
Newspaper Turnover
Circulation
21% Advertising
79%
Outdoor
23%
*100% of APN
Australia
• Australia’s largest regional daily newspaper publisher
• Over 65% of Australia’s outdoor advertising market
• Over 25% of the Australian radio market
• Solid EBIT growth in regional newspapers (6%)
• Double-digit EBIT growth in Outdoor (10%) and
Broadcasting (15%)
• Broadcasting - significant market share gains
Australia
• Outdoor - 11 major contract wins in 1998
• Launch of APN Digital
• Compound annual growth in PBT (15%), Net
Profits (17%) and EPS (11%) since listing in 1992
• Strongest growth in normalised EPS over last 5
years of any of the 8 largest media companies in
Australia
New Zealand
Turnover
EBITDA
Operating Profit
Margin (%)
Exceptionals
1998*
€m
208.4
58.6
45.2
% Change
Constant
Currencies
-2%
-1%
-3%
1998*
1997*
21.7%
(1.1)
22.0%
(0.2)
*excluding discontinued operations
% Change
Actual
-15%
-14%
-16%
New Zealand
Turnover Split*
Publishing
Commercial
Printing
23%
93%
Newspaper Turnover
Advertising
Circulation 78%
22%
Electronic Media
7%
*including Group share of joint ventures and associates
New Zealand
• New Zealand’s largest publisher
• The New Zealand Herald - Auckland’s only daily paper
- with 57% of total national newspaper market
• No. 1 radio operator: 53 radio stations with over 50%
market share
• No. 1 regional publisher: 9 paid-for regional daily
titles with a market share 58%
• No. 1 commercial printing group and major magazine
publisher
New Zealand
• 1998 economic recession galvanised new management
team to totally restructure group cost base
• Group headcount reduced in 1998 by more than 200
• Launch of Herald’s real estate tabloid to drive market
share
• Herald’s circulation stabilised with new initiatives
• Launch of searchable classified website
• 1999 - NZ economy showing signs of growth
United Kingdom
Turnover
EBITDA
Operating Profit
1998*
€m
142.9
(1.8)
(3.1)
1998*
Margin (%)
Exceptionals
-2.2%
(1.3)
*based on 100% of UK operations
% Change
Constant
Currencies
+1%
+80%
+73%
1997*
-8.1%
(0.4)
% Change
Actual
+8.1%
+79%
+71%
United Kingdom
Turnover Split *
Publishing
99%
Magazines
14%
Advertising
Circulation 68%
32%
Electronic Media
1%
* based on 100% of UK operations
Newspaper Turnover
United Kingdom
• Significant UK player in national press, regional
press and magazines
• Flagship title for Group
• Control of UK Independent titles from March 1998
• Major award winner in 1998 - the first time in 10
years
United Kingdom
• Circulation turnaround
• Independent losses significantly reduced
• Operating margins for regional press and
magazines at top end of UK peer group
• Fast growing Internet site
Ireland
Turnover
EBITDA
Operating Profit
Margin (%)
Exceptionals
1998
€m
%
Change
278.8
62.2
56.7
+12%
+7%
+6%
1998
1997
20.3%
(2.6)
21.4%
(5.2)
Ireland
Turnover Split*
Publishing
93%
Newspaper Turnover
Circulation
44% Advertising
56%
Electronic Media
7%
*including Group share of joint ventures and associates
Ireland
• Largest publisher in Ireland, 51% market share
(ABC)
• No 1 in all 5 newspaper categories:
Quality Daily, Popular Daily, Quality Sunday,
Popular Sunday and Evening
• 1998 circulations:
–
–
–
–
–
Irish Independent
The Star
Sunday Independent
Sunday World
Evening Herald
Circulation Change
162,716
1.6%
90,263
1.5%
309,913
(5.2%)
308,754
0.52%
106,989
(4.9%)
• Over 53% advertising market share
Ireland
No. 1 regional newspaper publisher, 11 titles with
39% market share
Newspread - largest publishing distribution
company
IndoCom - directory/audiotext division, acquired
Switchcom
PHL subscribers over 150,000 and profitable
Restructuring / new printing plant
South Africa
Turnover
EBITDA
Operating Profit
Margin (%)
Exceptionals
1998*
€m
175.2
31.4
27.7
% Change
Constant
Currencies
+6%
+1%
+1%
1998*
1997*
15.8%
(0.6)
16.6%
(0.8)
*excluding discontinued operations
% Change
Actual
-6%
-10%
-10%
South Africa
Turnover Split *
Publishing
Newspaper Turnover
99%
Commercial
Printing
6%
Electronic Media
1%
*including Group share of joint ventures and associates
Advertising
Circulation 73%
27%
South Africa
• Largest newspaper publisher in South Africa
• Own 14 titles dominating the 3 major urban centres
• 54% of total newspaper readership
• Substantial and successful new products have
stabilised and grown circulations
– Business Report
– Personal Finance
– I-Technology
South Africa
• Operating margins increased from 8% in 1994
to 15.8% by 1998
• Restructuring of editorial provides synergies
• Partnership with Conde Nast
• New media developments: In-Touch
New Media Developments
New Media Developments
Independent Digital
• Consolidate and enhance Group’s new media
platforms
• Leverage newspaper USPs into the electronic
arena
• Exploring internet-related opportunities
enhanced e-commerce
internet-support call centres
fulfilment
telephony (GSM/ traditional/ TV)
New Media Developments
• International co-ordination of R & D, network and
brand alliances
In-Touch - South Africa
PHL / TCI / IndoCom- Ireland
ZD Net / Kompass - Australia
• Aim to be the No. 1 portal in our markets
• Media power to create internet brands
Strategy
Strategy
• Geographically diversified
• Tight focus on...
1. Core competencies
Publishing
Outdoor
Electronic Media
Strategy
2. Market leadership positions
3. Cost reduction
• Primary content provider across diverse media
platforms
• Deliver double-digit earnings growth
Opportunities and Outlook
Opportunities and Outlook
• Group performing to plan in Q1 1999
• Economic conditions in New Zealand improving
• Restructuring
– On schedule
– Substantial, detailed and aggressive multicountry rationalisations
– 10% headcount reduction
– Annual cost savings of € 28m by 2001
Opportunities - Market by Market Outlook
• Australia
– Continued sound economy
• GDP growth forecasted at 2% - 3% for 1999
• Aus $ strengthening
–
–
–
–
–
Organic growth across all divisions
Sydney 2000 - outdoor / radio
APN Digital
Strong start to 1999
Forecasting 7th consecutive year of profit
growth
Opportunities - Market by Market Outlook
• New Zealand
– Business confidence increasing
• Recession over
• GDP growth forecasted at 2% for 1999
– Solid start to 1999
– Substantial headcount reduction (already 200+)
to drive profit growth, particularly in 2nd half.
– America’s Cup / APEC Conference
Opportunities - Market by Market Outlook
• United Kingdom
– Economic contraction now appears unlikely
• GDP growth forecasted to show a marginal 0.5% 0.75% increase for 1999
– Good start to 1999
– New media: “I-NEWS”
– Independent titles
• Award-winning: “Editor of the Year”
• Latest ABCs confirm first yoy increase since 1996
• Turn-around: on track
Opportunities - Market by Market Outlook
• Ireland
– Continuing ‘Celtic Tiger’, with economic
growth forecasted at 7% for 1999
– Forecasting organic growth across all divisions
– Restructuring - towards new plant (Q4 2000)
– New media:
• • -
PHL/Cablelink
Switchcom
– Buoyant readership / circulations
Opportunities - Market by Market Outlook
• South Africa
– Offer to acquire 100% (March 1999)
– Economy stabilised
• GDP growth forecasted to be flat for 1999 and
increasing to 3% forecast for 2001
– Political stability
• June elections
– Significant restructuring initiatives across all 3
regions, on plan
– New media: Vodacom/ In-Touch developments
Conclusion
WE ARE COMMITTED TO DELIVERING
DOUBLE-DIGIT EARNINGS GROWTH
• Core operational strengths
• Restructuring
• Expansion
• Developments
– PHL / Cablelink
– Prudent new media strategy
– In-Touch/ Vodacom
Independent Newspapers, PLC