INDEPENDENT NEWS & MEDIA PLC

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1 INDEPENDENT NEWS & MEDIA PLC 2013 PRELIMINARY RESULTS 13 March INM PLC inmplc.com Page 1

2 PRELIMINARY RESULTS OVERVIEW Strategic and Operating Highlights Successful completion of Financial Restructuring Net Debt reduced by 327.1m to 95.3m Net Debt to EBITDA multiple of 2.4x at year end Significant reduction in Group s annual interest costs to c. 6.5m in 2014 Debt maturity profile extended to 2018 Digital Substantial progress in growing online display capacity and implementing transformational digital strategy independent.ie remains No.1 news website* in Rep of Ireland with an average of 4.8m unique visitors (up 54% yoy), generating an average of 51.6m page impressions (up 35% yoy) Integration and strengthening of publishing and digital editorial teams to drive continued digital growth Successful launch of sundayworld.com, a 24/7 tabloid news website Significant investment in Digital planned for 2014 * Source: comscore 2014 INM PLC inmplc.com Page 2

3 PRELIMINARY RESULTS OVERVIEW contd. Strategic and Operating Highlights Profit enhancement initiatives: Successful implementation of Project Resolute targeted 26m profit enhancement programme delivered New profit enhancement programme, Project Quantum underway targeting further substantial cost savings and revenue enhancement Process for disposal of the Education businesses underway to focus on core business Search for new CEO underway 2014 INM PLC inmplc.com Page 3

PRELIMINARY RESULTS OVERVIEW contd. FY 2013 - Financial Summary for Continuing Group * Euro millions 2013 2012 % Revenue 322.4 345.1 (22.7) (6.6%) Operating Costs (289.7) (312.4) 22.7 7.3% EBIT** 32.

1 77.4% Revenue down 6.6% on 2012, with an improving H2 advertising revenue trend Operating Costs reduced by 22.7m (7.3%) to 289.7m EBIT** of 32.7m in line with last year Operating Margin of 10.

4 PRELIMINARY RESULTS OVERVIEW contd. FY Financial Summary for Continuing Group * Euro millions % Revenue (22.7) (6.6%) Operating Costs (289.7) (312.4) % EBIT** % Operating Margin (%) 10.1% 9.5% +60 bps Basic & Diluted EPS (cent) (pre-exceptionals) 3.0c 1.1c 1.9c 172.7% Basic & Diluted EPS (cent) 37.1c (50.3c) 87.4c N/A Net Debt % Revenue down 6.6% on 2012, with an improving H2 advertising revenue trend Operating Costs reduced by 22.7m (7.3%) to 289.7m EBIT** of 32.7m in line with last year Operating Margin of 10.1% - up 60bps on 2012 Net Debt reduced to 95.3m 2.4x EBITDA * Excludes Independent News & Media South Africa, which was disposed in 2013 and the Education Businesses, which are held for sale ** before Exceptionals 2014 INM PLC inmplc.com Page 4

5 COMPLETION OF DEBT RESTRUCTURING ALL 3 STEPS SUCCESSFULLY COMPLETED: 1. Sale of Independent News & Media South Africa for R2bn ( 150.7m) in August 2013 net proceeds applied to debt reduction 2. Restructuring of ROI Defined Benefit Schemes reduction in Group s pension deficit of 111.4m 3. Net equity issue of c. 40m through the issuance of 614.3m ordinary shares at 0.07 per share applied to debt reduction Net Debt reduced by 327.1m to 95.3m (including 24m of cash and 10m placed in escrow*) New debt deal significantly reduces the Group s annual interest cost and extends the Group s debt maturity profile to 2018 * To cover future potential warranty claims relating to sale of Independent News & Media South Africa 2014 INM PLC inmplc.com Page 5

6 KEY OPERATING HIGHLIGHTS IN 2013 Rep of Ireland Circulation Market Share ** National Titles Volumes* Absolute Share Mov't Readership*** Irish Independent 117, % UP 666,000 The Herald 56, % UP 303,000 Sunday Independent 229, % UP 962,000 Sunday World 208, % UP 740,000 Irish Independent continues to dominate quality daily market Sunday Independent remains biggest selling quality Sunday newspaper and continues to provide the largest regular audience on the island of Ireland across any advertising platform The Herald with 235,000 ** readers in Dublin makes it Dublin s most-read newspaper Sunday World continues to be the largest selling and most read tabloid on the island of Ireland The Belfast Telegraph Group continues to lead the way with multi-platform solutions Belfast Telegraph and Sunday Life in print and online reach 575,000^ people each week Continued product innovation, including a revamped Sunday Independent Business section and Seachtain in the Irish Independent * ABC July to Dec 2013; ** Based on circulation volumes and of their respective market; *** JNRS 2013; ^NI TGI INM PLC inmplc.com Page 6

FY 2013 REVENUE BY CATEGORY Euro millions 2013 2012 D% Print Advertising 73.1 82.6-11.5% Digital Advertising 9.3 8.3 12.0% Total Advertising 82.4 90.9-9.4% Circulation 107.5 112.5-4.4% Other * 132.

7 FY 2013 REVENUE BY CATEGORY Euro millions D% Print Advertising % Digital Advertising % Total Advertising % Circulation % Other * % Total Revenue % * Other represents Distribution & Contract Print Total Revenues impacted by: o Total Revenue down 6.6%, with an improving H2 advertising revenue trend o Digital revenues up 12.0% on last year o All advertising categories were down, except Property which showed good year-on-year growth o Circulation revenue reduction reflects volume declines with some modest cover price increases o Other category decline mainly due to the loss of a UK magazine printing contract and lower newspaper and magazine circulations resulting in lower Distribution revenue 2014 INM PLC inmplc.com Page 7

FY 2013 REVENUE PRINT ADVERTISING Print Advertising Euro millions 2013 2012 D% Full Year 73.1 82.6-11.5% H1 36.9 43.3-14.8% H2 36.2 39.3-7.

8 FY 2013 REVENUE PRINT ADVERTISING Print Advertising Euro millions D% Full Year % H % H % Print Advertising performance during the year continued to be variable, but improving trend in H2 and into 2014: H1 down 14.8% H2 down 7.9% FY down 11.5% YTD 2014 down 2.8% Island of Ireland YoY weekly Print Advertising variance INM PLC inmplc.com Page 8

YoY Growth FY 2013 REVENUE DIGITAL ADVERTISING Digital Advertising Euro millions 2013 2012 D% Full Year 9.3 8.3 12.0% H1 4.4 4.0 10.0% H2 4.9 4.3 14.

9 YoY Growth FY 2013 REVENUE DIGITAL ADVERTISING Digital Advertising Euro millions D% Full Year % H % H % Digital Advertising showed an improving trend throughout 2013 and into 2014: H1 up 10.0% H2 up 14.0% FY up 12.0% YTD 2014 up 14.6% Island of Ireland YoY weekly Digital Advertising variance INM PLC inmplc.com Page 9

FY 2013 REVENUE CIRCULATION, C. PRINT & W/SALE Euro millions 2013 2012 D% Circulation Revenues 107.5 112.5-4.4% Contract Print & Wholesaling 132.4 141.7-6.

4% on 2012 benefit of some modest price increases offsetting volume declines the Group s leading titles maintained and in some cases increased market share

10 FY 2013 REVENUE CIRCULATION, C. PRINT & W/SALE Euro millions D% Circulation Revenues % Contract Print & Wholesaling % Circulation revenue down 4.4% on 2012 benefit of some modest price increases offsetting volume declines the Group s leading titles maintained and in some cases increased market share Newspread continues to successfully execute its diversification strategy The decline in Contract Print & Wholesaling revenue is mainly due to the loss of a UK magazine printing contract and lower newspaper and magazine circulations resulting in lower Distribution revenue 2014 INM PLC inmplc.com Page 10

DIGITAL STRATEGY INM s Digital Strategy is to drive profitable growth by: Capitalising on its strength in creating best-in-class digital content Growing content & audience reach across new content

11 DIGITAL STRATEGY INM s Digital Strategy is to drive profitable growth by: Capitalising on its strength in creating best-in-class digital content Growing content & audience reach across new content verticals Continuing to be the leader in breaking news online Bringing new innovative advertising solutions to the market Amplifying brands across the independent.ie platform Ongoing growth of local, national & international online audiences & communities Superior customer engagement Audience-first newsroom Enhanced customer data to deliver more targeted solutions for advertisers 2014 INM PLC inmplc.com Page 11

12 DIGITAL KEY ACTIONS Key hires significant investment in people planned and underway to reposition the Group s digital proposition Ongoing enhancement of independent.ie improved user experience to drive more engagement Paid-for ipad App launch first ROI paid-for news App launched in December to test market. Reasonably positive results to date refining strategy based on response New mobile independent.ie App designed for smartphone and tablet consumption being launched next month Vertical approach to browser to drive reader engagement and improve advertising yields 2014 INM PLC inmplc.com Page 12

DIGITAL GRABONE Continues to grow with market share of c.19% - the clear No.

penetration has increased significantly, with over 25% of all transactions now

organically, through the addition of new products to the GrabOne portfolio

13 DIGITAL GRABONE Continues to grow with market share of c.19% - the clear No.1 Irish owned operator Recorded year-on-year revenue growth of 29% Mobile penetration has increased significantly, with over 25% of all transactions now coming via mobile devices Focus for 2014 is to increase GrabOne s market share organically, through the addition of new products to the GrabOne portfolio Kerry Galway Limerick/ Shannon Cork Belfast Dublin South East 2014 INM PLC inmplc.com Page 13

DIGITAL VERTICALS CarsIreland.ie continues to perform well and is delivering growth in both audience and number of registered car dealers the No.

14 DIGITAL VERTICALS CarsIreland.ie continues to perform well and is delivering growth in both audience and number of registered car dealers the No.2 in the ROI market During 2013, investment made in ClickandGo.com, a leading Irish travel site with a strategic alliance with Aer Lingus, offering holidays in Europe and the US Northern Ireland s leading online job portal nijobfinder.co.uk, recorded a strong start to 2014 with page impressions and unique visitors growing year on year (+10% and +35% respectively in February*) Northern Ireland s No.1 property website**, propertynews.com ahead of last year with page impressions and unique visitors up 11% and 8% respectively in February* nicarfinder.co.uk increased its online traffic page impressions and unique visitors increased by 46% and up 50% respectively in February* * Google Analytics (Feb 2014) ** ComScore (Dec 2013) 2014 INM PLC inmplc.com Page 14

15 PROJECT RESOLUTE/QUANTUM Project Resolute 26m programme complete 8m FY 2014 benefit mainly cost related Project Quantum targets further substantial cost savings/revenue benefits (approx. 9m in 2014, with further benefits targeted in 2015 & beyond) Resolute/Quantum benefits partly offset by substantial Digital investment in 2014 Big 2014 initiative is the substantial reduction in subbing/production costs in National titles Numerous other initiatives targeted 2014 INM PLC inmplc.com Page 15

16 APN NEWS & MEDIA - AUSTRALASIA FY APN News & Media Limited INM Share Euro millions NPAT (pre-exceptionals) Exceptionals (12.0) (162.7) Net Profit/(Loss) After Tax (post Exceptionals) 0.3 (150.3) APN s EBITDA was up 8% to A$162.8m, despite revenue from continuing operations down A$5.8m to A$817.2m APN s results reflect strong cost control by the publishing business, a good performance by the Radio business (with increased market share), a record result for Adshel, and the impact of the sale of non-core businesses Cash Dividends Received by INM Nil 9.9 Since year-end, there have been a number of developments in APN: Sale of APN Outdoor to Quadrant Private Equity completed for A$69 million Sale of e-commerce business brandsexclusive completed for A$2 million in cash and 8% of the equity in Aussie Commerce, one of Australia s leading e-commerce groups Sale of APN s wholly-owned New Zealand magazine titles to Bauer Media Group is expected to complete this month The acquisition of the remaining 50% of Australian Radio Network and The Radio Network from its US joint venture partner Clear Channel Communications Inc to be part-financed by a A$132 million equity issue INM will not be participating in this equity issue resulting in INM s stake in APN being reduced to c.18.6% 2014 INM PLC inmplc.com Page 16

17 FY 2013 INCOME STATEMENT Year ended 31 December 2013 Year ended 31 December 2012 Before Before Exceptional Exceptional Exceptional Exceptional Euro millions Items Items Total Items * Items * Total * Continuing Operations Revenue Operating Costs (289.7) 92.1 (197.6) (312.4) (131.1) (443.5) Operating Profit/(Loss) (131.1) (98.4) Share of results of associates & joint ventures 13.5 (12.4) (139.1) (125.6) Impairment of associates and joint ventures (24.0) (24.0) Net Finance Charges (20.7) (35.8) (7.5) (43.3) Profit/ (Loss) Before Tax (301.7) (291.3) Taxation Charge (8.2) (30.4) (38.6) (4.4) Profit/(Loss) from Continuing Operations (283.1) (277.1) Discontinued Operations ** (2.8) 18.6 Profit/(Loss) for the period (285.9) (258.5) Continuing Group - Basic & Diluted EPS (cent) 3.0c 37.1c 1.1c (50.3c) Revenue of 322.4m, down 22.7m (6.6%) on the prior year Significant cost reduction of 22.7m (7.3%) on the prior year Operating profit of 32.7m, in line with the prior year Finance charge of 20.7m reduction due to the restructuring of the Group s bank facilities Total exceptionals of 215.3m are analysed on slides 19 & 20 See Slide 18 for breakdown of Tax charge * Restated ** INMSA & Education s results for the period classified as Discontinued Operations 2014 INM PLC inmplc.com Page 17

18 FY 2013 TAX CHARGE Euro millions 2013 Normal (charge) Ireland tax (2.8) Deferred tax movement (1.0) UK Tax Rate Change (4.4) Tax Charge before exceptionals (8.2) Exceptional (charge)/credits Ireland tax credit 2.8 Pension Def. Tax Asset unwind (13.9) Belfast Def. Tax Asset unwind (19.3) Exceptional Tax Charge (30.4) Total tax charge (38.6) The total tax charge of 38.6m is all noncash no related cash payment Ireland Operating tax charge of 2.8m offset by exceptional tax credit of 2.8m on exceptional expenditure in Ireland Deferred tax movement of 1.0m primarily relates to utilisation of a deferred tax asset in Northern Ireland UK Tax Rate Change of 4.4m relates to a restatement of the opening UK deferred tax asset due to the reduction in the future UK Corporation tax rate (down to 20% in 2015) The Pension Deferred Tax Asset unwind of 13.9m is due to a restructuring of the significant ROI DB pension schemes The Belfast Deferred Tax Asset unwind of 19.3m is due to a reassessment of the probability of recoverability of the Deferred Tax Asset in Northern Ireland Tax paid of 3.0m (as per Cashflow) relates to INMSA, which is reflected in Discontinued Operations and consequently not in the tax charge above 2014 INM PLC inmplc.com Page 18

19 FY 2013 EXCEPTIONAL COSTS FY 2013 EXCEPTIONAL ITEMS - CONTINUING OPERATIONS Euro millions Continuing Operations Impairment of assets - (117.8) Restructuring credit/(charge) 92.1 (13.3) Exceptional finance credit/(charge) (7.5) Share of associates and joint ventures exceptional items (12.4) (139.1) Impairment of associates and joint ventures - (24.0) Net exceptional tax (charge)/credit (30.4) (283.1) Share of associates and joint ventures exceptional items of 12.4m relates to: APN non-cash impairment charges for brandsexclusive and APN Outdoor of 15.0m, offset by other items of 3.0m Star redundancies of 0.4m Net exceptional tax charge of 30.4m as explained on previous slide Restructuring credit of 92.1m relates to: pension restructuring gain of 111.4m a charge of 4.9m related to employee share issue a charge of 14.4m related to restructuring costs (mainly redundancy) Exceptional finance credit of 148.5m mainly relates to: a write off of the Group s bank facilities of 142.0m in relation to the debt restructuring a credit of back-end fees of 12.1m the cost of renegotiating the Group s financing arrangements of 5.6m 2014 INM PLC inmplc.com Page 19

20 FY 2013 EXCEPTIONAL COSTS contd. FY 2013 EXCEPTIONAL ITEMS - DISCONTINUED OPERATIONS Euro millions Discontinued Operations Gains/(losses) on sale of assets 27.6 (0.8) Impairment of assets - (0.3) Restructuring charges - (2.5) Exceptional finance cost (10.1) - Net exceptional tax credit (2.8) Total - Exceptional Costs (Continuing & Discontinuing) (285.9) Gains on sale of assets of 27.6m relates to the net gain of 28.0m on the disposal of the South African business, offset by costs of 0.4m related to the disposal of the Education businesses The exceptional finance cost of 10.1m relates to foreign exchange losses booked on a South African intergroup loan 2014 INM PLC inmplc.com Page 20

21 CASHFLOW Euro millions EBITDA Working Capital Retirement Benefit Obligations (3.1) (0.7) Provisions (7.1) (6.8) Cash Exceptionals (13.7) (20.6) Tax Paid (3.0) (8.2) Cash generated by operating activities Cashflows from investing activities Capex (6.6) (6.0) Dividends Received Interest Received Disposals of INMSA* Mov't on Restricted Cash** (10.0) Cashflows from financing activities Interest Paid (17.9) (32.1) Proceeds from Borrowings Repayments of Borrowings (174.3) (40.2) Issue of Equity (net of costs) Payments relating to finance lease liabilities - (0.3) Dividends paid to non-controlling interests - (0.1) Net increase in cash and cash equivalents and bank overdrafts in the year Balance at the beginning of the year FX (2.0) (1.0) Cash and cash equivalents and bank overdrafts at the end of the year Reduction in EBITDA mainly due to INMSA s operating profit only included for part of 2013 Reduced dividends received due to no APN dividends Movement in provisions mainly relates to unwind of legacy costs/onerous leases Cash exceptionals mainly relates to severance payments relating to Project Resolute and INMSA disposal costs Capex maintained at below depreciation Reduced interest payment due to restructuring of bank facilities going forward, annual interest charge expected to be approx. 6.5m pa (based on current interest rates) * Net of bank balance of 9.9m ** Relates to 10.0m held in Escrow in respect of warranties following the sale of the South African business 2014 INM PLC inmplc.com Page 21

22 m NET DEBT WATERFALL 422.4m ( 134.0m) ( 40.0m) ( 10.7m) ( 142.0m) ( 0.4m) 95.3m 2014 INM PLC inmplc.com Page 22

23 BALANCE SHEET 31-Dec 31-Dec Euro millions D Intangible Assets (77.5) Tangible Assets (11.1) Investment in Associates & JVs (18.4) Net Deferred Tax Assets (47.7) Assets/ Liabilities classified as held for sale Other Net Assets/ Liabilities (41.4) (60.3) 18.9 Retirement Benefit Obligations (60.6) (190.2) Net Debt (95.3) (422.4) (320.2) Decrease in Retirement Benefit Obligations of 129.6m mainly relates to restructuring of the main ROI pension schemes as part of Financial Restructuring Net Debt reduced by 327.1m due to successful completion of Debt Restructuring Assets and liabilities relating to Education Businesses disclosed as Assets/Liabilities classified as held for sale In general, variances driven by sale of South African business during the year Reduction in Investments in Associates & JVs primarily FX related (on APN investment) Decrease in Net Deferred Tax Assets of 47.7m primarily relates to a restructuring of the Group s significant ROI DB schemes, a reassessment of the recoverability of the Group s deferred tax asset and the disposal of INMSA 2014 INM PLC inmplc.com Page 23

Continue to roll out Group s Digital Strategy Deliver on Project Quantum

24 2014 AGENDA/CONCLUSION Stable financial position following financial restructuring Capitalise on return to growth of the Irish economy Continue to roll out Group s Digital Strategy Deliver on Project Quantum Recruit a new CEO Dispose of Education businesses 2014 INM PLC inmplc.com Page 24

INDEPENDENT NEWS & MEDIA PLC 2013 INTERIM RESULTS. 30 August INM PLC inmplc.com Page 1

INDEPENDENT NEWS & MEDIA PLC 2013 INTERIM RESULTS 30 August 2013 2013 INM PLC inmplc.com Page 1 INTERIM RESULTS OVERVIEW H1 2013 - Financial Summary for Continuing Group * Euro millions 2013 2012 % Revenue