2012 PRELIMINARY RESULTS & FINANCIAL RESTRUCTURING

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1 INDEPENDENT NEWS & MEDIA PLC 2012 PRELIMINARY RESULTS & FINANCIAL RESTRUCTURING 26 April INM PLC inmplc.com Page 1

2 DEBT RESTRUCTURE - OVERVIEW Agreement reached on Debt Restructure will put the Group on a secure financial footing with a sustainable debt level and an appropriate debt amortisation profile (following the implementation of all stages) Sale of INM South Africa for R2 billion (before expenses) net proceeds to be used to pay down bank debt Debt Restructure gives the Group the flexibility to: Reposition itself to embrace opportunities in the digital arena; Deliver further significant cost reductions; and Continue to invest in its core print titles 2013 INM PLC inmplc.com Page 2

3 DETAILS OF DEBT RESTRUCTURE On full implementation: Will reduce the Group s core debt to 118m with 8m of other facilities and credit lines - Provides for a Capital Raise to repay 40m of Debt Restructure the Group s 4 ROI defined benefit pension schemes Extends the maturity of the Group s debt for 5 years to 1 April 2018 Results in a projected Net Debt to EBITDA level of approximately 3 times, in line with the Group s stated strategic leverage target Allows the Group embrace opportunities in the digital arena Allows the Group deliver further significant cost reductions Allows the Group continue to invest in its core print titles 2013 INM PLC inmplc.com Page 3

4 DEBT RESTRUCTURE SEQUENCE OF STAGES South African Competition Commission Approval Submission of Section 50 funding proposal to Irish Pension Board 31 December 2013 deadline for raising new funds Release of INMSA Disposal Proceeds Successful Pension Restructuring Capital Raising Facility A 150m 150m 118m Facility B 50m 50m Nil Facility C Other Facilities Conversion/ Write off Lender Equity INM s existing facilities continue in operation, however, any cash interest is limited to that payable on 150m 116m or balance following receipt of INMSA proceeds including 10m* of proceeds held in escrow 116m or 10m* (balance of INMSA disposal proceeds to be released) if INM exercises its option to equitise the balance 8m 8m 8m 0m 106m plus any accrued PIK interest if INM exercises its option 0% 70% if INM exercises its option Nil or 10m* if the balance of INMSA disposal proceeds have not been released 138m (after payment of 40m and equitisation of 10m of debt) plus any accrued PIK interest Shares representing the greater of 10m or 11% of INM s equity value at the time of issue *Earliest release of 10m INMSA disposal proceeds held in escrow (for any potential warranty claims) is 12 months from completion but it can be held for up to 24 months 2013 INM PLC inmplc.com Page 4

5 NEXT STEPS Competition Commission clearance and shareholder approval for the sale of INM South Africa Agree with the Trustees a Section 50 proposal to be submitted to the Irish Pensions Board current deadline for submission is 30 June 2013 Prior to 31 December 2013, implement a 40m Capital Raise to enable a further debt pay-down and to reduce core debt to 118m with 8m of other facilities and credit lines 2013 INM PLC inmplc.com Page 5

6 PRELIMINARY RESULTS FOR 2012 Financial & Operating Highlights Revenue of 539.7m, down 3.3% (2.1% in constant currency) Operating Profit of 59.7m, down 15.8m on 2011 delivering an operating margin of 11.1% Despite inflationary cost increases in South Africa (5.7%) and excluding the yoy impact of GrabOne and IHD, Operating Costs reduced by 9.2m Digital growth continues, with Revenues up 21.4% Net Exceptional Charge of 273.7m mainly driven by non-cash impairments and headcount restructuring 2013 INM PLC inmplc.com Page 6

7 PRELIMINARY RESULTS FOR SUMMARY FY Financial Summary Euro millions D% Revenue (3.3%) Operating Costs (480.0) (482.5) 0.5% EBIT* (20.9%) Operating Margin (%) 11.1% 13.5% (240 bps) * Before exceptional items INSERT DIGITAL IMAGE 2013 INM PLC inmplc.com Page 7

FY 2012 REVENUE BY CATEGORY FY 2012 - Revenue by Category Euro

7%) Circulation 156.1 162.2 (3.8%) Other * 171.6 171.1 0.

3%) * Other represents Distribution, Contract Print and

29% Adv/ Digital 39% Total Revenues impacted by: o Continued

4% (in cfx) ahead of last year o o o Reduced circulation

Reduced Wholesale Revenues from lower 3 rd party circulation

8 FY 2012 REVENUE BY CATEGORY FY Revenue by Category Euro millions D% Advertising/ Digital (5.7%) Circulation (3.8%) Other * % TOTAL REVENUE (3.3%) * Other represents Distribution, Contract Print and Education Split of Revenues FY 2012 Other * 32% Circ. 29% Adv/ Digital 39% Total Revenues impacted by: o Continued advertising decline in Ireland, with South Africa 1.4% (in cfx) ahead of last year o o o Reduced circulation volumes partly offset by some selective cover price increases Reduced Wholesale Revenues from lower 3 rd party circulation sales Other revenue increase driven by the purchase of IHD, partially offset by reduced Print Revenues 2013 INM PLC inmplc.com Page 8

FY 2012 ADVERTISING REVENUE ADVERTISING REVENUE By Region - Euro millions 2012 2011 D% Island of Ireland

9 FY 2012 ADVERTISING REVENUE ADVERTISING REVENUE By Region - Euro millions D% Island of Ireland (9.0%) South Africa (3.0%) Total GROUP (5.7%) Group advertising revenue down 5.7% In Island of Ireland, Display revenues were impacted by reduced spend in the retail, travel and finance categories In South Africa, revenues 1.4% ahead of last year (in cfx), direct retail and features up on 2011, with classified (particularly recruitment, property and legal notices) and National/brand advertising volumes remaining under pressure Digital revenue growth in excess of 21% 2013 INM PLC inmplc.com Page 9

FY 2012 CIRCULATION REVENUE/ AUDIENCE CIRCULATION REVENUES By Region - Euro millions 2012 2011 D% Island of Ireland 112.5 115.

Africa Advertising* >53% >43% >33% Circulation** >49% >44% >31% Readership*** >55% >44% >26% * Company Estimate ** ABC (2012)

10 FY 2012 CIRCULATION REVENUE/ AUDIENCE CIRCULATION REVENUES By Region - Euro millions D% Island of Ireland (2.8%) South Africa (6.1%) Total GROUP (3.8%) AUDIENCE ANALYSIS Market Share Dublin Belfast S. Africa Advertising* >53% >43% >33% Circulation** >49% >44% >31% Readership*** >55% >44% >26% * Company Estimate ** ABC (2012) *** JNRS (2012)/ NI TGI (2012)/ AMPS (2012/2011) Market shares maintained or increased across most metrics 2013 INM PLC inmplc.com Page 10

PRODUCT INNOVATION EXAMPLES Irish Independent Day & Night now produced

fitness magazine Continued part-works in the Irish Independent Sunday

Telegraph moved to morning edition Belfast Telegraph strengthened its

11 PRODUCT INNOVATION EXAMPLES Irish Independent Day & Night now produced in glossy quarter-fold Irish Independent Fit Magazine: new glossy fitness magazine Continued part-works in the Irish Independent Sunday Independent Living section upgraded to a Compact magazine Belfast Telegraph moved to morning edition Belfast Telegraph strengthened its GAA coverage with appointment of leading GAA reporter 2013 INM PLC inmplc.com Page 11

DIGITAL FY 2012 Digital Euro millions 2012 2011 D% Island of Ireland 8.3 7.1 16.9% South Africa 3.1 2.3 34.8% Total GROUP 11.4 9.4 21.

1 read online news publishing site Implemented a new publishing platform delivers significant new functionality and in early 2013, successful redesign of suite of editorial

12 DIGITAL FY 2012 Digital Euro millions D% Island of Ireland % South Africa % Total GROUP % Total YoY audience and traffic growth: Unique Users +31% Page Impressions +9% independent.ie ranked by comscore as No.1 read online news publishing site Implemented a new publishing platform delivers significant new functionality and in early 2013, successful redesign of suite of editorial websites in Ireland carsireland.ie attained clear #2 position in ROI car market Continue to hold #1 position in NI in jobs market, with nijobfinder.co.uk and the property market, with propertynews.com Continued roll-out of mobile apps in South Africa 2013 INM PLC inmplc.com Page 12

DIGITAL AGENDA FOR 2013 Full digital editorial integration

(H2 initiative) Further development of subscription-based mobile apps

13 DIGITAL AGENDA FOR 2013 Full digital editorial integration Investigating e-commerce link-ups with retail partners Metered Paywall (H2 initiative) Further development of subscription-based mobile apps GrabOne - now has a presence in 7 distinct markets - continue to roll out Escapes and Store CarsIreland.ie - continued dealer acquisition Kerry Galway Limerick/ Shannon Cork Belfast Dublin South East 2013 INM PLC inmplc.com Page 13

FY2012 COST MANAGEMENT Despite inflationary cost pushes in South Africa (5.

20% 1% 11% 2% 24% 11% 10% 4% 9% 8% Newsprint & Ink Salaries Editorial

Costs Excluding the full year impact of GrabOne and IHD, costs decreased by 7.

5%), despite inflationary cost pushes of 5.7% Common costs reduced by 2.

14 FY2012 COST MANAGEMENT Despite inflationary cost pushes in South Africa (5.7%) and excluding the full year impact of GrabOne and IHD, total costs decreased by 9.2m Salaries only up 0.1%, despite significant wage inflation in South Africa FY 2012 COST BREAKDOWN 20% 1% 11% 2% 24% 11% 10% 4% 9% 8% Newsprint & Ink Salaries Editorial Production Marketing Distribution Other Depreciation Wholesaling Central Costs Excluding the full year impact of GrabOne and IHD, costs decreased by 7.8m in the Island of Ireland Costs in South Africa increased by 0.8m (0.5%), despite inflationary cost pushes of 5.7% Common costs reduced by 2.2m (28.6%), mainly driven by the closure of Head Office in Citywest, closure of London office and not back-filling COO role 2013 INM PLC inmplc.com Page 14

15 FY 2012 INCOME STATEMENT Year ended 31 December 2012 Year ended 31 December 2011 Before Before Exceptional Exceptional Exceptional Exceptional Euro millions Items Items Total Items Items Total Revenue Operating Profit 59.7 (140.5) (80.8) 75.5 (89.5) (14.0) Share of results of associates & joint ventures 13.9 (150.9) (137.0) 20.1 (36.1) (16.0) Net Finance Charges (35.4) (1.7) (37.1) (33.6) - (33.6) Profit/ (Loss) Before Tax 38.2 (293.1) (254.9) 62.0 (125.6) (63.6) Taxation (Charge)/Credit (9.4) (8.2) Profit/ (Loss) from Continuing Operations 28.8 (273.7) (244.9) 53.8 (94.8) (41.0) Non-controlling interests Attributable to Equity holders of the parent 28.9 (273.7) (244.8) 54.2 (94.8) (40.6) Basic & Diluted EPS (cent) 5.3c (44.5c) 9.8c (7.4c) Revenue of 539.7m, down 3.3% (down 2.1% in cfx) Operating profit of 59.7m, down 20.9% (down 17.7% in cfx) Net finance charges up on last year, due to increased PIK interest. Exceptional finance charge of 1.7m mainly relates to bank amendment fees Exceptional charge primarily relates to a non-cash impairment on assets in APN (NZ & Australia), Irish Print division, and Belfast Publishing 2013 INM PLC inmplc.com Page 15

FY 2012 SEGMENTAL REPORTING D Euro Euro millions 2012 2011 ( ) % FY 2012 EBIT SPLIT

8) 1.1 0.3% EBIT 38.2 45.6 (7.4) (16.2%) South Africa Revenues 184.8 194.6 (9.8) (5.

2%) Sub-Total EBIT: 65.2 83.2 (18.0) (21.6%) S.

5 (15.8) (20.9%) Island of Ireland operating costs reduced by 0.

16 FY 2012 SEGMENTAL REPORTING D Euro Euro millions ( ) % FY 2012 EBIT SPLIT Island of Ireland Revenues (8.5) (2.3%) Operating Costs (316.7) (317.8) % EBIT (7.4) (16.2%) South Africa Revenues (9.8) (5.0%) Operating Costs (157.8) (157.0) (0.8) (0.5%) EBIT (10.6) (28.2%) Sub-Total EBIT: (18.0) (21.6%) S. Africa 41% Ireland 59% Less Common Costs (5.5) (7.7) % GROUP EBIT (15.8) (20.9%) Island of Ireland operating costs reduced by 0.3%, despite full year impact of GrabOne and IHD South Africa operating costs, increased by only 0.5%, despite significant inflationary cost pushes Common costs reduced by 2.2m or 28.6%, mainly driven by the closure of Head Office in Citywest, closure of London office and not back-filling COO role 2013 INM PLC inmplc.com Page 16

17 FY 2012 EXCEPTIONAL ITEMS Euro millions Subs. Assoc. Total Impairment of Assets (118.9) (165.2) (284.1) Restructuring (15.8) (3.5) (19.3) Costs associated with financing arrangements (5.8) - (5.8) Disposal gain by APN Sub-total (140.5) (150.9) (291.4) Exceptional finance costs (1.7) - (1.7) Net Taxation Credit (122.8) (150.9) (273.7) Split as follows: Cash (25.0) Non-Cash (248.7) (273.7) 248.7m of the total Exceptional Items of 273.7m are non-cash Exceptional Items Subsidiary impairment of assets of 118.9m, is mainly made up of: a 66.8m non-cash impairment on property, plant and equipment in the Island of Ireland a 50.4m non-cash impairment on intangible assets in the Island of Ireland Restructuring charge of 15.8m relates to over 200 redundancies in the Island of Ireland and South Africa, primarily in H Associate s (APN) impairment of assets of 165.2m relates to a 135.8m non-cash impairment on its NZ & Australian mastheads, a 5.4m non-cash deemed disposal loss and a 24.0m goodwill write off on the Group s investment in APN Associate s (APN) disposal gain arose on the disposal of its 50% interest in APN Outdoor The Net Tax Credit arose on the impairment of PPE in the Island of Ireland 2013 INM PLC inmplc.com Page 17

18 APN NEWS & MEDIA - AUSTRALASIA FY 2012 APN News & Media Limited INM Share Euro millions NPAT (pre-exceptionals) Exceptionals (150.5) (32.1) Net Loss After Tax (post Exceptionals) (138.1) (14.6) Cash Dividends Received by INM Exceptional charge mainly relates to a non-cash impairment charge on APN s Australian and New Zealand publishing assets APN paid an interim dividend of A$0.015 in September 2012 no final dividend declared for 2012 Results in line with market guidance Weak publishing results were partially offset by good radio and outdoor results In H1 2012, APN successfully formed a new Outdoor JV with Quadrant Private Equity net proceeds received by APN of A$174m used to reduce debt In early 2013, Chairman, CEO and 3 non-executive directors resigned Peter Cosgrove has been appointed Chairman and a search firm has been appointed to identify a CEO and additional directors good progress being made Paul Connolly appointed to Board in October INM PLC inmplc.com Page 18

19 FY 2012 CASH FLOW Euro millions Group EBIT Depreciation & Amortisation Dividends Received EBITDA (incl. Dividends) Working Capital & Provisions (6.7) (10.1) Capex (6.1) (6.9) Net Interest Paid (31.2) (29.4) Tax Paid (8.2) (12.8) Ongoing Free Cash Flow Cash Exceptionals (20.6) (5.6) Disposals (net of Investments) FX/Other (3.6) (1.9) Net Debt Decrease EBITDA (incl. Dividends received) of 80.7m Continued focus on Working Capital leads to an improved position Capex maintained at below Depreciation and no significant Capex required in the medium term Cash exceptionals mainly relate to Restructuring in the business which has resulted in over 200 redundancies, mainly in H and exceptional finance costs relating to our Debt Restructuring 2013 INM PLC inmplc.com Page 19

20 BALANCE SHEET 31-Dec 31-Dec Euro millions D Intangible Assets (54.0) Tangible Assets (70.5) Investment in Associates & JVs (146.1) Other Net Assets/ Liabilities 1.2 (22.7) 23.9 Retirement Benefit Obligations (190.2) (147.0) (43.2) Defined Benefit Pension - Deficit (168.4) (122.4) (46.0) SA Medical Aid Liability (21.8) (24.6) 2.8 Net Debt (422.4) (426.8) 4.4 (308.3) (22.8) (285.5) Intangible and Tangible Asset reductions mainly reflect non-cash impairments Reduction in Investment in Associates & JV s reflects INM booking its share of APN s noncash impairment Increase in Defined Benefit Pension deficit primarily reflects lower bond yields 2013 INM PLC inmplc.com Page 20

21 2013 AGENDA/CONCLUSION 2013 AGENDA Competition Commission clearance and shareholder approval for the sale of INM South Africa Agree with Trustees a Section 50 proposal to be submitted to the Irish Pensions Board current deadline for submission is 30 June 2013 Accelerated roll-out of our Digital strategy on the Island of Ireland Building on 2012 initiatives, deliver further and necessary cost reductions targeting full year benefit of 26m Prior to 31 December 2013, implement a 40m Capital Raise to enable a further debt pay-down and to reduce core debt to 118m with 8m of other facilities and credit lines 2013 INM PLC inmplc.com Page 21

22 2013 AGENDA/CONCLUSION CONCLUSION THIS DEBT RESTRUCTURE WILL... Reduce core debt to 118m with 8m of other facilities and credit lines Achieve the Group s stated strategic leverage target of a Net Debt to EBITDA ratio of approx. 3 times Extend the maturity of the Group s debt for 5 years to 1 April 2018 Secure an appropriate and stable capital structure and debt amortisation profile for the Group No amortisations for the first 2 years Reasonable amortisation profile in years 3 to 5 Appropriate covenant headroom Provide the Group with the requisite funding to Continue to invest in the digital arena and to invest in its core print titles Enable the Group to deliver further and necessary cost reductions, building on 2012 initiatives and targeting a full year benefit of 26m 2013 INM PLC inmplc.com Page 22

INDEPENDENT NEWS & MEDIA PLC 2012 INTERIM RESULTS. 31 August INM PLC inmplc.com Page 1

INDEPENDENT NEWS & MEDIA PLC 2012 INTERIM RESULTS 31 August 2012 2012 INM PLC inmplc.com Page 1 INTERIM RESULTS FOR 2012 OVERVIEW EBIT of 25.4m, down 9.1m versus H1 2011, reflecting tough trading conditions