Gannett Company Overview

Transcription

1 Gannett Company Overview August 2015

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. Any forward-looking statements should be evaluated in light of these important risk factors. The Company is not responsible for updating or revising any forwardlooking 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, which is available through the investor relations portion of our website.

3 Profile Company Name Gannett Co., Inc. Incorporation Delaware President and CEO Robert J. Dickey Headquarters McLean, VA Employees 19, Revenues $3.2 billion Ticker Symbol GCI

4 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 has 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 95 million unique visitors access content from USA TODAY and Gannett s local media organizations, putting the company squarely in the Top 10 U.S. news and information category. U.S. newspapers add an additional audience of 9 million readers every weekday.

5 INVESTMENT HIGHLIGHTS Strong Financial Profile $727 million 2Q revenues at 13.3% Adjusted EBITDA margin Achieved $178 million total quarterly digital revenues, 24% of total revenues. Cost reduction estimated at $67 million to be achieved by first half of Well-Positioned to Make Accretive Acquisitions Completed the acquisition of the remaining 59.4% in the Texas-New Mexico Newspaper Partnership. Completed the acquisition of Romanes Media Group in the UK. Transactions expected to contribute annual revenues of approximately $100 million over the next twelve months. High Liquidity Available for Return of Capital to Shareholders Generated pre-tax gain on equity investment of $21.8 million High level of stable cash flow. Free Cash Flows of $120 million for first half of 2015 before prespin pension contributions Dividend of $0.16 per share, $0.64 per share annualized Undrawn $500 million revolver plus $62 million cash on hand Share buyback program of $150 million

6 Second Quarter Financial Highlights Q Q B/(W) Revenues, as reported $ $ % Businesses exited in prior year (12.0) - Effects of FX (10.6) - Revenue before impact of exited businesses and FX % Businesses acquired in Q (9.3) - Total Revenues, as adjusted $ $ % Adjusted EBITDA $ 97.0 $ % Adjusted EBITDA % 13.3% 15.7% -2.4%

7 LOCAL NEWSPAPERS IN STABLE MID-SIZED MARKETS THROUGHOUT THE U.S. 92 daily local markets Well positioned in mid-size and smaller markets Geographical diversity a core strength Rebalancing resources towards differentiated relevant local reporting

8 ATTRACTIVE LOCAL CIRCULATION AND ADVERTISING REVENUE PROFILE Circulation Revenue Local Market Circulation* Full access including digital only subscription revenue provides Gannett a more stable revenue base Other 1.8% Single Copy 16.4% Full Access Including Digital Only 81.8% 2.4M Full Access including Digital Only Subscriptions 70% of Subscribers are either on EZ Pay or Annual Payments Full Access including Digital Only Subscription Revenue up 1.1% YTD Advertising & Marketing Services Revenue Local Market Advertising* Local Digital Advertising makes up 28.3% of Local Account revenue Local accounts offer stronger protection from secular pressures National Major National Retail Major Accounts Retail Accounts 21% 22% Local 79% Local Digital Advertising up 0.5% YoY in LTM Local Digital Retail Advertising (excluding Classified) up 7.6% YoY in LTM *Excludes Texas New Mexico Newspapers Partnership

9 LARGE AND GROWING GLOBAL DIGITAL REVENUE BASE $704 $709 35% since 2012 Implemented All Access content subscription model in 2012 Digital Revenues (millions) $523 $676 ~30 million unique domestic visitors LTM Q Large user base accessing content via desktops, smartphones and tablets ~2 million downloads of local newspaper Digital Revenues by Category Other 3% Advertising 61% apps Diversified digital revenues Circulation 36%

10 USA TODAY: A POWERFUL AND UNIQUE NATIONAL BRAND Daily Average Circulation (MM) 2 Jun 12 Jun 13 Jun 14 Jun % since 2012 #1 publication with total daily circulation of 4 million Average cross-platform page views of more than 1.0 billion per month Valuable brand leveraged across various businesses 50,000 USA TODAY Sports Media Group 22+ million downloads of USA TODAY's award-winning app 37,500 25,000 12, % since 2012 Quality content delivered on multiple platforms drive visitors and engagement 0 Q Q Q Q Unique Visitors Sports continue to be a driver of growth for USA Today 1 Source: comscore Media Metrix 2 Source: Alliance for Audited Media

11 LEADING COMMUNITY NEWSPAPER PUBLISHER IN THE U.K. Robust and Growing Digital Revenues and Audience Digital Growth ( m) Accelerating % since 2012 Top regional community news provider in the U.K daily paid-for titles 150+ weekly print products, magazines and trade publications LTM Q Digital Audience (Average Monthly Browsers - Millions) % since 2012 Well-positioned in mid-size and smaller markets Network of websites including s1, a leading employment website in Scotland, and other digital products Total average print readership of 6 million every week ~22 million monthly unique visitors to Newsquest digital platforms Industry leading margins 1 Source: Omniture Web Analytics (Newsquest data) Jun 2015

12 COMMITTED TO RETURNING CAPITAL TO SHAREHOLDERS Disciplined Capital Policy Illustrative Free Cash Flow Allocation Allocating capital to create value Direct returns to shareholders In millions of dollars ($ in millions) 2014 Investment in the business Strategic and accretive acquisitions Repayment of debt, if any Gannett will initially pay an annual cash dividend of $0.64 / share and commence 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 26% of 2014A EBITDA Share repurchases attractive at current share price level Free Cash Flow $274 Less: Dividends 73 1 Less: Repurchases 50 1 Excess Annual Cash Flow Available for Accretive Investments / Further Return of Capital $151 Significant available liquidity for accretive acquisitions or further returns of capital to shareholders 1 Expected

13 SUBSTANTIAL UNTAPPED CONSOLIDATION OPPORTUNITY Fragmented market provides consolidation opportunities at attractive multiples Daily Circulation by Company 1 Digital First Media 8% Gannett 12% News Corp. 6% Tribune Publishing 5% Gannett plans to acquire more local markets to add scale and increase its national footprint Other includes ~200 companies with over 2,000 titles Other 45% McClatchy 5% New York Times 4% Advance 3% BH Media 3% Acquisitions bring significant top line and bottom line synergy opportunities Lee 3% Hearst 2% New Media 2% Total daily circulation: 41 million Source: BIA; PWC Global entertainment and media outlook ¹ BIA data of newspaper companies with daily circulation in excess of 10,000

14 ATTRACTIVE ACQUISITION OPPORTUNITIES THROUGHOUT THE COUNTRY Targeting markets between 0.5M and 3M population Additional targeted characteristics include university presence, state capital, diversified economy and ability to consolidate around market

15 MULTIPLE MARKET CONSOLIDATION SYNERGIES Consolidate back-office and infrastructure GPS Manage production and distribution more efficiently than most independents and smaller chains Design Studios Bring efficiencies to acquired sites by taking in design and copy editing NSSC/CCC/Finance Hubs Take financial operations into our consolidated shared service centers USA TODAY Local Edition - Leverage improved subscriber value proposition through pricing Leverage Company-Wide Content and Resources Local Sales Expertise Elevate the skill of local sales staffs by providing world-class training and research out of our regional sales organization National Sales Team Increase advertising through existing national relationships, and streamline advertising at acquired sites Digital Platform Apply our digital platform to new properties Content Tap into content from across our entire footprint Consumer Marketing Leverage the investments made in consumer sales capabilities to improve sales at acquired sites G/O Provide digital marketing services to acquired sites

16 Appendix

17 Adjusted EBITDA

18 Second Quarter Financial Highlights