INDEPENDENT NEWS & MEDIA PLC 2011 PRELIMINARY RESULTS

Transcription

1 INDEPENDENT NEWS & MEDIA PLC 2011 PRELIMINARY RESULTS 2012 INM PLC Page 1

2 PRELIMINARY RESULTS FOR 2011 OVERVIEW EBIT of 75.5m in line with market guidance Results reflect continuing economic challenges in both of our key markets Unemployment and austerity measures continue to materially impact consumer activity in the Island of Ireland Advertising in 2011 remained negative throughout the year Digital growth despite weak consumer markets Acquisition of International House, building education platform Focus on maximising cash returns from Asset Base Aggressive cost reduction, whilst retaining market leadership Further reduction in Net Debt 2012 INM PLC Page 2

3 PRELIMINARY RESULTS FOR SUMMARY FY Financial Summary Euro millions % %** Revenue (68.4) (10.9%) (5.6%) Operating Costs (482.5) (543.8) % 4.2% EBIT* (7.1) (8.6%) Operating Margin (%) 13.5% 13.2% 30 bps Earnings per share (cents)* (0.4) (3.9%) Net Debt % * Before exceptional items Underlying**Revenues down 5.6% Underlying Operating Costs down 21.6m, (4.2%) despite CPI/ significant newsprint price increases and Digital investments Operating Margin of 13.5% up 30bps on 2010 Net Debt reduced by 46.8m (9.9%) ** Underlying - where used in this presentation is in Constant Currency, excluding London Independent (disposed in April 2010) and compares 52 weeks in both periods 2012 INM PLC Page 3

4 PRELIMINARY RESULTS FOR 2011 BY CLASS OF BUSINESS FY Underlying Revenue by Classification Island South Euro millions of Ireland Africa Total Advertising/ Digital (11.2%) (2.1%) (6.2%) Circulation (2.8%) (0.5%) (2.2%) Other * (8.8%) (2.5%) (7.9%) TOTAL REVENUE (7.7%) (1.7%) (5.6%) * Other represents Distribution, Contract Print and Education Split of Revenues 2011 Other 30% Advertising / Digital 41% Circulation 29% Total Revenues impacted by: o Continued Advertising contractions across all sectors particularly in Island of Ireland o o o Soft circulation volumes largely offset by selective cover price increases Reduced Wholesale Revenues from lower 3 rd party circulation sales Reduced Print from closure of Cape Town print facilities and lower 3 rd party print orders 2012 INM PLC Page 4

5 ADVERTISING TRENDS FOR % Group Underlying Advertising Revenue by Week (2011 vs 2010) Constant FX 5% 0% % Variance yoy -5% -10% -15% -20% -25% -30% Trend line 2011 advertising performance was negative YoY Advertising trended more positively towards year-end weeks were ahead of 2010 (8 of which occurred in H2) 2012 INM PLC Page 5

6 ADVERTISING BY REGION Island of Ireland Half-on-Half Advertising Trends Island of Ireland YoY Advertising by Week (2011 v 2010) 0% -5% -10% -15% -20% -25% -30% -35% H1'08 H2'08 H1'09 H2'09 H1'10 H2'10 H1'11 H2'11 10% 5% 0% -5% -10% -15% -20% -25% -30% 2011 Underlying decline of 11.2% -40% -35% South Africa Half-on-Half Advertising Trends 2010 FIFA 4% World Cup 2% -1% -3% -5% -7% -9% -11% -13% H1'08 H2'08 H1'09 H2'09 H1'10 H2'10 H1'11 H2'11 South Africa YoY Advertising by Week (2011 v 2010) 70% 60% 50% 40% 30% 20% 10% 0% -10% -20% -30% 2011 Underlying decline of 2.1% 2012 INM PLC Page 6

7 CIRCULATION/ AUDIENCE UNDERLYING CIRCULATION REVENUE 2011 By Region m % Island of Ireland (2.8%) South Africa 48.3 (0.5%) Total GROUP (2.2%) AUDIENCE ANALYSIS Market Share Dublin Belfast S. Africa Advertising* >52% > 45% > 34% Circulation** > 49% > 45% > 31% Readership*** > 56% > 43% > 25% * Company Estimate ** ABC (2011) *** JNRS (2011)/ NI TGI (2011)/ AMPS (2011) 2012 INM PLC Page 7

8 OPERATING COST MOVEMENTS Operating Cost Waterfall 2010 to Down 61m Base Newsprint Price Increases CPI/ Other Increases Digital Investments London Independent - disposed Currency FX Consummable Savings Payroll Savings Other Savings INM PLC Page 8

9 2011 COST MANAGEMENT FY 2011 UNDERLYING COST BREAKDOWN 2% 13% 20% 2% 12% 10% Newsprint & Ink Editorial Marketing Other Wholesaling 4% 5% 8% 24% Salaries Production Distribution Depreciation Central Costs Continued strong cost focus, underlying costs down 21.6m (4.2%) With exception of Newsprint & Ink, and Distribution - savings across all categories Salary costs decreased by 1.1% despite wage inflation in SA of c. 6%; since year-end voluntary pay cut for Senior Managers FY 2011 UNDERLYING OPERATING COST VARIANCE BY CATEGORY (in order of magnitude) (Positive = Decrease) 'm % Salaries % Wholesaling % Newsprint & Ink (4.1) (7.1%) Other % Distribution 0.0 (0.1%) Editorial % Production % Marketing % Depreciation % Central Costs % Underlying YoY Cost Movement/ Decrease % Underlying Costs in Island of Ireland down 6.7% Underlying Costs in South Africa only up 1.7% Wholesaling costs have reduced in line with reduced revenue Newsprint costs up by only 7.1% despite significant price increases (c. 30%) in Island of Ireland 2012 INM PLC Page 9

10 DIGITAL FY 2011 Digital - Underlying Revenue % of Euro millions % Ad Rev Island of Ireland % 7.1% South Africa % 1.8% Revenue % 4.1% 9.6% underlying Revenue growth on the back of good audience and traffic growth Digital Revenues now over 4% of total Advertising, with Ireland Digital accounting for over 7% of total Irish Advertising Digital User Stats in millions Page Impressions (LHS) Unique Users (RHS) Cost increases calibrated with revenue growth Classified pillars remain very weak (i.e. Property/ Recruitment) but strong growth in all publishing portals Bolt-on acquisitions/developments in 2011: Findajob/ Stepstone (Ire); Mypricingguru (SA); Vuvuplaza (SA); Cars Ireland (Ire) Rapid growth in GrabOne with further investment in INM PLC Page 10

11 DIGITAL - GRABONE 150, , ,000 75,000 50,000 25,000 - May Jun Jul Aug Sep Oct Nov Dec Euro millions Coupons Sold since launch Total Saving for Irish Consumers GrabOne launched in May 2011 rapid expansion Offers Daily Coupons/Escapes Largest Irish-owned provider now in 7 regions nationwide #1 value proposition for SME s #1 Social Media presence in online coupon market 1 coupon sold every 2 minutes since launch Most popular categories: Health & Beauty Food & Beverage Accommodation Galway September 2011 Kerry 2012 Limerick 2012 North West 2012 Cork June 2011 Belfast August 2011 Dublin May 2011 South East May Jun Jul Aug Sep Oct Nov Dec 2012 INM PLC Page 11

12 2011 INCOME STATEMENT FY 2011 Income Statement Year ended 31-Dec-2011 Year ended 31-Dec-2010 Before Before Exceptional Exceptional Exceptional Exceptional Euro millions Items Items Total Items Items Total Revenue Operating Profit 75.5 (96.1) (20.6) 82.6 (32.7) 49.9 Share of results of associates & JVs: - Share of APN 17.5 (28.2) (10.7) Other JVs and Associates 2.6 (1.3) Net Finance Charges (33.6) - (33.6) (48.2) - (48.2) Profit/ (Loss) Before Tax 62.0 (125.6) (63.6) 59.9 (6.9) 53.0 Taxation (Charge)/Credit (8.2) (8.6) Profit/ (Loss) After Tax 53.8 (94.8) (41.0) Non-controlling interests Attributable to Equity holders of the parent 54.2 (94.8) (40.6) Basic & Diluted EPS (cent) 9.8c (7.4c) 10.2c 10.6c Note: Share of APN Results reclassified in 2010 for comparative purposes (as per Segmental Report) Revenue in 2010 includes 4 months of London Independent Operating Profit in 2011 of 75.5m, within guidance range of 74m - 78m Net Finance Charges down 14.6m due to reduced Debt and repayment in full of expensive PIK Note Adjusted EPS of 9.8c 2012 INM PLC Page 12

13 2011 SEGMENTAL REPORTING FY 2011 Segment Result* Euro millions Var % Island of Ireland Revenues (35.7) (8.9%) Operating Costs (317.8) (345.2) % EBIT (8.3) (15.4%) South Africa Revenues (11.6) (5.6%) Operating Costs (157.0) (162.7) % EBIT (5.9) (13.6%) UK - disposed of April 2010 Revenues (21.1) n/a Operating Costs 0.0 (26.4) 26.4 n/a EBIT 0.0 (5.3) 5.3 n/a Sub-Total EBIT: (8.9) (9.7%) Less Common Costs (7.7) (9.5) % GROUP EBIT (7.1) (8.6%) * Before exceptional items Despite challenging economic conditions, the Group earned 75.5m EBIT, split:- S. Africa 45% Island of Ireland 55% Island of Ireland Operating costs down 27.4m, despite effective 30% newsprint price increase Costs in South Africa down 5.7m despite underlying CPI increases of c. 6% 2012 INM PLC Page 13

14 APN NEWS & MEDIA - AUSTRALASIA FY 2011 APN News & Media Limited INM Share Euro millions NPAT (pre-exceptionals) Net (Loss)/ Profit After Tax (post exceptionals) (10.7) 48.4 Cash Dividends Received by INM* * excludes Final dividend of A$0.05, declared 23/02/12 and payable 30/03/12 Final dividend per share of A$0.05 declared payable end-march INM s portion equates to 7.6m INM s 30.4% equity stake in APN News & Media is worth c. 140m, based on current share price Results in line with guidance, reflecting weaker revenue climate, especially in NZ Exceptional charge relates primarily to non-cash impairment charge in respect of New Zealand mastheads booked in H Australian/ NZ publishing results impacted by Queensland floods/ Christchurch earthquake Strong Outdoor result EBIT +31% - new JV announced (post year-end) with Quadrant Private Equity generating gross cash proceeds of A$190m, providing APN with cash to fund a range of growth opportunities Growth in Radio revenue and market share in both NZ and Australia Increased investment in Digital and strong leadership/ growth of Grabone 2012 INM PLC Page 14

15 2011 CASH FLOW FY 2011 Cash Flow Euro millions Group EBIT Depreciation & Amortisation Dividends Received EBITDA (incl. Dividends) Working Capital & Provisions (10.1) (16.5) Capex (6.9) (7.6) Net Interest Paid (29.4) (43.3) Tax Paid (excl. Tax on Disposals) (11.7) (11.7) Cash Exceptionals (5.6) (22.5) Disposals/ (Investments) Tax Paid on Disposals (1.1) (11.5) Share Placement FX Movement/ Other (1.9) 0.3 EBITDA (incl. Dividends received) of 102.2m Capex maintained at below Depreciation and no significant Capex required in the near term Proceeds from disposal of assets in 2011 of 11.3m, mainly surplus property Net Debt Reduced by 46.8m Priority continues to be Debt paydown, with all Free Cash Flow applied to Net Debt reduction Net Debt Movement INM PLC Page 15

16 2011 BALANCE SHEET FY 2011 Balance Sheet 31-Dec 31-Dec Euro millions Intangible Assets (101.3) Tangible Assets (8.1) Investment in Associates & JVs (23.3) Other Net Assets/ Liabilities (22.7) (48.7) 26.0 Retirement Benefit Obligations (147.0) (132.0) (15.0) Defined Benefit Pension - Liability (122.4) (95.9) (26.5) SA Medical Aid Liability (24.6) (36.1) 11.5 Net Debt (426.8) (473.6) 46.8 Total Net (Liabilities)/Assets (22.8) 52.1 (74.9) Intangible Asset reduction mainly reflects non-cash impairment of masthead valuations due to economic recession Increase in Pension Fund liability reflects lower bond yields and is before application for Section 50 (still awaiting policy clarification) Net Debt reduced by 46.8m to 426.8m at year-end INM PLC Page 16

17 2011 NET DEBT/ CAPITAL MANAGEMENT Net Debt (Euro millions) Net Debt reduced by 46.8m and by over m over past 3 years Net Debt (LHS) Amortisations (RHS) Maximisation of Free Cash Flow and continued deleveraging: o FY 2011 EBITDA of 102.2m o Low Capex requirements o Proceeds from disposal of surplus property Fully complied with all financial covenants in Debt repayments ahead of plan Credit Ratios Net Debt/ EBITDA* 4.2x 4.3x 5.3x EBITDA*/ Interest Cover 3.0x 2.3x 2.5x Covenants reset to provide significant headroom Expect to refinance well in advance of May 2014 Debt maturity * including Dividends received 2012 INM PLC Page 17

18 DELIVERING ON STRATEGIC & FINANCIAL OBJECTIVES WHAT WE COMMITTED TO STATUS COMMENT Revenue growth Economic recovery has yet to materialise. Operating Cost Reductions Underlying Operating Costs down 21.6m (despite input cost increases) Sell or Close other Lossmaking Businesses Maintain/ Increase share Grow Digital Operations Irish Daily Star Sunday (Closed Jan 2011); Sunday Tribune (Closed Feb 2011); YourLocal.ie (Sold Dec 2011) Despite macro-conditions, INM titles have commanding lead in respective markets, with all titles profitable (against generally loss-making competitors) Underlying revenue growth of 9.6% in 2011; NPD/ Investments in GrabOne.ie, CarsIreland.ie, Vuvuplaza.co.za and Mypricingguru.co.za; Launch of new Irish jobs site (Findajob.ie) in an alliance with Europe s largest online recruiter, Stepstone. Digital Revenue now 4.1% of Total Advertising Diversify revenue streams Growth of Digital (organic/ investment), plus Education (acquisition of IHD) Restructure DB Pension Fund Awaiting policy clarification before submission of Section 50 application Sell non-income generating assets, and police capex to prioritise Debt pay down Actioned a print outsourcing programme in SA, ensuring no capex investment expected in SA in the future and disposal of surplus properties Debt Pay Down Net Debt reduced by 46.8m in INM PLC Page 18

19 BUSINESS DRIVERS & OUTLOOK Strategic Objectives consistently being pursued 2012 macro-economic factors to remain very subdued, particularly Ireland o Expect that advertising will still be negative YoY marginally improving against easier comps in H2 o Product initiatives to bolster market share o Digital growth to continue o Further diversification in revenues (Education/ Digital) Continued cost reduction o Costs will be flat/down o Newsprint price escalation has abated Maximise Free Cash Flow for continuing Debt reduction 2012 INM PLC Page 19