Gannett Jefferies Media and Communications Conference

Transcription

1 Gannett Jefferies Media and Communications Conference February 24, 2016

2 Forward-Looking Statements Certain statements in this presentation may be forward looking in nature or constitute forwardlooking statements as defined in the Private Securities Litigation Reform Act of The words believe, expect, estimate, could, should, intend, may, plan, seek, anticipate, project and similar expressions, among others, generally identify forward-looking statements, which speak only as of the date the statements were made. The matters discussed in these forward-looking statements are subject to a number of risks, trends and uncertainties that could cause actual results to differ materially from those projected, anticipated or implied in the forwardlooking statements. A number of those risks, trends and uncertainties are discussed in the Company s filings with the U.S. Securities and Exchange Commission, including the Company s registration statement on Form 10-K. Any forward-looking statements should be evaluated in light of these important risk factors. The Company is not responsible for updating or revising any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. This presentation also contains a discussion of certain non-gaap financial measures that the Company presents in order to allow investors and analysts to measure, analyze and compare its financial condition and results of operations in a meaningful and consistent manner. A reconciliation of these non-gaap financial measures to the most directly comparable GAAP measures can be found in the Company s registration statement on Form 10-K, which is available through the investor relations portion of our website.

3 MANAGEMENT TEAM ON SITE TODAY Robert J. Dickey President and Chief Executive Officer Served as President of Parent's U.S. Community Publishing, formerly Newspaper Division, since February 2008 Previously, Mr. Dickey served as Senior Group President, Pacific Group and Chairman of Phoenix Newspapers, Inc. from ; President and Publisher of The Desert Sun, Palm Springs, CA, from ; and Group Vice President of the Pacific Group, from Serves on the board of the National Newspaper Association and was Chairman of the Board from March 2014 through March 2015 Alison K. Engel Senior Vice President Chief Financial Officer and Treasurer Served as Vice President of Finance of Parent since January 2015 Previously, Ms. Engel served as Senior Vice President, Chief Financial Officer and Treasurer of A. H. Belo Corporation, from December 2007 through November 2014 From 2003 through January 2008, she held various senior positions with Belo Corp., serving as its Vice President and Corporate Controller from January 2006 to January 2008 and as its Director/Accounting Operations and Corporate Controller from February 2005 to December 2006 Michael P. Dickerson Vice President of Investor Relations & Real Estate Joined in June Previously, Mr. Dickerson served as Vice President of Finance and Business Development for Babcock & Wilcox Nuclear Energy, Inc. (April 2013 May 2015); and Vice President and Investor Relations Officer for Babcock & Wilcox (NYSE: BWC), June 2010 April Previously served as Vice President of Finance, Investor Relations and Corporate Development for General Cable Corporation, (NYSE: BGC) March 2004 June Member of Senior Roundtable for National Investor Relations Institute, American Institute of Certified Public Accountants, and the Ohio Society of Certified Public Accountants Phone: (703)

4 Profile Company Name Gannett Co., Inc. Incorporation Delaware President and CEO Robert J. Dickey Headquarters McLean, VA Employees 18, Revenues $2.9 billion Ticker Symbol GCI

5 LEADING MEDIA AND MARKETING COMPANY Gannett is a leading media and marketing company with unparalleled local-to-national reach, successfully connecting consumers, communities and businesses. Gannett owns USA TODAY, 92 strong local media organizations in 33 states and Guam, and more than 160 local news brands in the U.K. Each month more than 100 million unique visitors access content from USA TODAY and Gannett s local media organizations, making the company a powerhouse in the U.S. news and information category.

6 INVESTMENT HIGHLIGHTS Strong Financial Profile $739 million Q4 revenues at 17.0% Adjusted EBITDA margin Achieved $165 million total quarterly digital revenues, 100 million unique domestic digital visitors Cost reduction estimated at $67 million to be achieved by first half of 2016 Well-Positioned to Make Accretive Acquisitions Announced the acquisition of Journal Media Group for $280 million, roughly 3.3x post-synergy adjusted EBITDA multiple Completed the acquisitions of the remaining 59.4% in the Texas-New Mexico Newspaper Partnership and Romanes Media Group in the UK in the second quarter. Integrations ahead of schedule National digital advertising trends improving, increased 32% in Q4 High Liquidity Available for Return of Capital to Shareholders High level of stable cash flow. Free Cash Flow of $56 million for fourth quarter of 2015 Dividend of $0.16 per share, $0.64 per share annualized Undrawn $500 million revolver plus $197 million cash on hand Share buyback program of $150 million

7 Fourth Quarter Financial Highlights In millions $ Q Q B/(W) Revenues, as reported $ $ % Operations exited in prior year (9.1) - Effects of FX Reclassification of certain customer credits Prospective accounting for third party digital revenue Revenue before impact of acquired businesses % Businesses acquired in Q (26.3) - Revenues, as adjusted $ $ % Adjusted EBITDA $ $ $28.0 Adjusted EBITDA % 17.0% 19.1% - 2.1%

8 Gannett Merger with Journal Media Group Financial Highlights $450 million in annual revenues In millions of dollars First full-year adjusted EBITDA of approximately $60 million Post-synergy multiple of 3.3X Immediately EPS accretive: approximately $ $0.15 per share in the first full year and $ $0.25 in the second year. Strategic Highlights Adds 15 dailies and 18 weeklies in 14 local markets, in nine states; includes key markets such as Milwaukee, WI and Memphis and Knoxville, TN. Adds daily and Sunday circulation of approximately 675,000 and 950,000, respectively. Leverages Gannett s existing industry-leading content and national USA TODAY brand, enables the integration of Journal Media Group properties onto Gannett s Digital Platform, and delivers additional scale for National-to-local strategy.

9 COMMITTED TO RETURNING CAPITAL TO SHAREHOLDERS Disciplined Capital Policy Illustrative Free Cash Flow Allocation Allocating capital to create value In millions of dollars Direct returns to shareholders Investment in the business Strategic and accretive acquisitions Repayment of debt, if any Gannett is paying an annual cash dividend of $0.64 / share and approved a $150MM share repurchase program, to be used over a 3-year period Declared $0.16 quarterly dividend per share Total annual expected dividends and share repurchases represents 32% of 2015A EBITDA ($ in millions) Free Cash Flow (2015)* $280 Less: Dividends 73 1 Less: Repurchases 50 1 Excess Annual Cash Flow Available for Accretive Investments / Further Return of Capital $157 Significant available liquidity for accretive acquisitions and further returns of capital to shareholders * Before impact of $100 million one-time pre-spin pension contribution 1 Assumption for a full calendar year

10 2016 Guidance without consideration for pending JMG acquisition Revenues and Earnings Revenue trends will improve in 2016 compared to 2015, driven by growth in digital. In millions of dollars Advertising revenues expected to be -5% to -7% range. Circulation revenues expected to be -2% to -4% range. EBITDA margins will remain under pressure in short term, increasing throughout the year impacted by incremental stand-alone company costs, earnings impact of lower revenues, higher non-cash pension costs, lower contributions from CareerBuilder, partially offset by ongoing efficiency actions and growth in digital revenues. Other Items Capital expenditures of $50 million to $60 million. Depreciation and amortization of approximately $110 million Effective tax rate of 31% to 33% Domestic pension contributions of $25 million Recurring non-cash non-cash pension expense expected to increase $12 million (lower 2015 asset returns than long-term assumption, lower long-term asset growth assumption, new mortality tables)

11 Appendix

12 Adjusted EBITDA

13 Adjusted EPS