FY2014 Financial Results 15 October 2014

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Bruce Allison
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1 FY2014 Financial Results 15 October 2014

2 Group FY2014 financial highlights FY2014 S$ 000 FY2013 S$ 000 Change % Operating Revenue 1,215,184 1,239,452 (2.0) Operating Profit # 348, ,288 (5.5) Fair value gain on investment properties 109, ,407 (2.1) Investment Income 48,215 13,971 NM Gain on partial divestment of 701Search* 52,863 - NM Profit after taxation 470, , Net Profit attributable to shareholders 404, ,954 (6.2) # This represents the recurring earnings of the media, property and other businesses. NM: Not meaningful * 701Search is the holding company for the Group s regional online classified business. During the financial year, the Group entered into a strategic partnership agreement which provided for partial sale of stake in 701Search to Telenor. 2

3 Group FY2014 financial highlights Operating Revenue FY2014 S$ 000 FY2013 S$ 000 Change % Newspaper and Magazine 931, ,220 (6.0) Property 204, , Others 78,513 50, Newspaper and Magazine Advertisement revenue fell S$51.3m (6.8%) Circulation revenue fell S$9.7m (4.9%) Property Higher rental income from Paragon and The Clementi Mall 1,215,184 1,239,452 (2.0) Others Higher revenue boosted by contributions from exhibitions, sgcarmart (acquired in April 2013) and radio business. 3

4 Group FY2014 financial highlights Profit/(Loss) before taxation FY2014 S$ 000 FY2013 S$ 000 Change % Note Newspaper and Magazine 246, ,340 (16.0) (a) Property 239, , (b) Treasury and Investment 30,419 11,385 NM (c) Others 12,194 (38,043) NM (d) 528, , NM: Not meaningful (a) Decline in profit of the Newspaper and Magazine business was mainly attributable to lower advertisement revenue. (b) Operating profit, before finance costs and fair value gain on investment properties, rose S$7.0m (5.0%) to S$148.4m in line with higher revenue. (c) Treasury performance, before including financing cost previously allocated to the Property segment prior to REIT refinancing in July 2013, was lifted by increased dividend and interest income, higher profit on sale of investments and lower impairment charges on portfolio investments. (d) The Others segment turned into a profit with the gain on partial divestment of 701Search. In addition, the local online classified, radio and exhibitions businesses registered better performance in the financial year. 4

Group FY2014 highlights Operating Revenue Composition (S$1,215.2m) Newspaper and Magazine Advertisement Revenue Composition (S$705.9m) 16.9% 9.7% 14.8% 15.3% 58.1% 26.

5 Group FY2014 highlights Operating Revenue Composition (S$1,215.2m) Newspaper and Magazine Advertisement Revenue Composition (S$705.9m) 16.9% 9.7% 14.8% 15.3% 58.1% 26.9% 58.3% Advertisements (Newspaper & Magazine) Circulation Rental & Services Others Display Classified * Magazines & Others * Classified includes Recruitment and Notices 5

6 Ad revenue slowed as property and transport sectors continued to face headwind 5.0% Newspaper Ad Revenue Y-O-Y Growth (%) 0.0% -5.0% -1.7% -2.9% -10.0% -5.9% -7.0% -7.3% -7.9% -7.8% -9.8% -9.1% -10.3% -10.3% -10.2% -7.1% -8.0% -7.4% -15.0% 1QFY14 2QFY14 3QFY14 4QFY14 FY14 Display Classified* Total * Classified includes Recruitment and Notices 6

7 Thousands Growth in circulation copies led by robust digital sales Daily Average Newspaper Circulation The Straits Times/ The Sunday Times The Business Times The New Paper/ The New Paper Sunday Lianhe Zaobao Lianhe Wanbao Shin Min Daily News Berita Harian/ Berita Minggu Tamil Murasu/ Tamil Murasu Sunday FY14 FY14 (Digital) FY13 FY13 (Digital) 7

8 Group FY2014 highlights Cost Composition (S$882.1m) 21.3% 42.5% 14.0% 6.2% 7.4% 8.6% Staff Cost Newsprint Premises Cost Depreciation Other Materials, Production & Distribution Costs Other Operating Expenses 8

9 A leaner workforce as the Group restructures and transforms FY2014 FY2013 Change % Headcount as at end-august 4,204 4,339 (3.1) Staff Costs (S$'000) 374, , Staff costs were up S$24.9m mainly due to salary increments, higher bonus costs including a oneoff special bonus for prior year (S$10.4m) arising from REIT profit and incentive to drive growth. 9

10 Near-term newsprint prices expected to soften 700 Average Newsprint Charge-Out Price & Monthly Consumption 12, , , ,057 7,856 8,416 8,147 9, , QFY14 2QFY14 3QFY14 4QFY14 7,000 LHS - Prices (US$) RHS - Ave Mthly Consumption (MT) 10

11 S$'m Healthy operating margins Recurring Earnings # and Operating Margin^ FY2010 FY2011 FY2012 FY2013 FY % 35.0% 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% Profit before investment income (S$'m) Sky@eleven profits (S$'m) Operating Margin^ # This represents the recurring earnings of the media, property and other businesses. ^ Computed based on recurring earnings excluding Sky@eleven. 11

Property segment maintains its steady growth Paragon The

and The Clementi Mall (69%) Market value for Paragon (Freehold)

7b and S$571m respectively Will be the largest suburban

12 Property segment maintains its steady growth Paragon The Clementi Mall The Seletar Mall Net Property Income (NPI) rose 5% to S$148.4m Rental reversions of 8.5% for SPH REIT portfolio Healthy NPI margins for Paragon (76%) and The Clementi Mall (69%) Market value for Paragon (Freehold) and The Clementi Mall at S$2.7b and S$571m respectively Will be the largest suburban lifestyle hub in the North-East Targeted to open in November 2014 Unit price rose from IPO at S$0.90 to S$1.065 as at financial year end 12

Group investible fund Group Investible Fund (S$1.9b) 14.6% 28.4% Conservative stance maintained on investment allocation, focused on capital preservation 37.4% 19.

13 Group investible fund Group Investible Fund (S$1.9b) 14.6% 28.4% Conservative stance maintained on investment allocation, focused on capital preservation 37.4% 19.6% Returns are expected to be commensurate with low riskreturn profile to mitigate against volatility Equities Bonds Investment Funds (As at August 31, 2014) Cash and deposits About S$300m managed for final dividend payment and New Media fund 13

Strong growth in traffic for Online Classified business Top online

million 1 Largest classified website in Vietnam, with monthly page views

2 classified website in Indonesia, with monthly page views above 700

14 Strong growth in traffic for Online Classified business Top online classified website in Malaysia, with monthly page views exceeding 700 million 1 Largest classified website in Vietnam, with monthly page views close to 500 million 1 No. 2 classified website in Indonesia, with monthly page views above 700 million 1 No. 2 classified website in the Philippines, with monthly page views of 270 million 1 Data source: 1 Xiti, August

15 Declared dividend per share of 21cents 7 cents interim, 14 cents final (cents) % 96.2% 90.2% 107.8% 80.4% # ^ 2014 Interim & Final Div (LHS) Div Payout Ratio* (RHS) 110% 100% 90% 80% 70% 60% * Computed based on Group recurring earnings net of SPH REIT s non-controlling interest (S$315m) # FY2010 included profits from the Group s Sky@Eleven development ^ Excludes special dividend of 18 cents paid pursuant to the establishment of SPH REIT 15 15

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1H FY14 Financial Results 11 April 2014

1H FY14 Financial Results 11 April 2014 Group 1H FY14 financial highlights 1H FY14 S$ 000 1H FY13 S$ 000 Change % Operating Revenue 607,239 604,275 0.5 Operating Profit # 170,368 198,947 (14.4) Net (loss)/income