for personal use only - asx · ongoing progress with organic development: • added 129 new static...

FY15 Results Presentation28th August 2015

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AgendaFY15 Highlights

FY15 Financial Results

Growth Strategy

FY16 Outlook

Appendix

QMS Media Limited | 2015 Financial Year Results | 2

The Flinders | CnrFlinders & Swanston Sts, Melbourne

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Highlights


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Pro forma Revenue of $59.6 million.

Pro forma EBITDA of $4.7 million.

Pro forma NPATA of $2.6 million (excluding significant items).

Major acquisitions completed, one remaining site to be delivered H1 FY16.

Strong platform for growth established.

Delivered target of 21 landmark digital billboards at 30 June 2015.

On track to deliver FY16 forecast of an additional 12 landmark digital billboards.

Punt Road digital conversion already delivered, remaining 11 sites fully permitted.

7 of the remaining 11 sites expected to be operational by 31 December 2015.

All key financial metrics in line with or ahead of Prospectus forecast.

Digital Roll-Out on Target

IPO Acquisition completions on track.


FY15 HighlightsDelivered on our targets

The Punt | Richmond Station, Melbourne

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Successful listing on ASX in June 2015.

Completion of IPO acquisitions outlined in the Prospectus on track, integration progressing well.

Experienced and specialist management team in place to deliver growth.

Digital development strategy on track – 21 landmark digital billboards at 30 June 2015:

• Attractive, high-profile locations with long dwell times.

• Premium presentation quality.

• Long average lease tenure of over 13 years.

• Iconic digital landmarks in Melbourne, Brisbane and Adelaide.

Ongoing progress with organic development:

• Added 129 new static billboard sites.

• Secured rights to Gold Coast street furniture.

Key strategic contract wins in Asia Pacific:

• Bali International and Domestic airport terminals.

• Auckland Transport media services agreement (executed 26 August 2015).

Production operations optimised and contract wins secured.

Brand development and repositioning well accepted.


FY15 Operational HighlightsGrowth strategy on track as outlined in Prospectus

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The FlindersMelbourne, May 2015

The ValleyBrisbane, May 2015

The HindleyAdelaide, May 2015

Westgate FwyMelbourne, April 2015

CamberwellMelbourne, June 2015

FY15 Operational HighlightsNew Digital sites delivered to plan


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FY15 Financial Results


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June year end ($ million)

2015

Pro forma

Actual

2015

Pro forma

Forecast

Revenue 59.6 59.4

Cost of media sites and production (35.3) (36.6)

Gross profit 24.4 22.8

Operating expenses (19.7) (19.7)

EBITDA 4.7 3.1

D&A (4.0) (4.6)

EBIT (before significant items) 0.6 (1.5)

Significant items1 (5.3) (5.4)

EBIT (4.7) (6.9)

Interest (0.3) (0.4)

Tax 0.7 0.2

NPAT (4.3) (7.1)

NPATA (before significant items) 2.6 0.6

• All key financial metrics in line with or

ahead of Prospectus forecast.

• Gross profit benefited from capturing

previously outsourced margin within the

Group.

• Lower amortisation reflects move to

weighted average lease expiry.

• Significant items consistent with

Prospectus disclosure1.

1. See slide 27 in the Appendices for further details in significant items

FY15 Financial ResultsDelivered FY15 Prospectus forecast


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2015

Pro forma

Actual

2015

Pro forma

Forecast

Total number of landmark digital billboards 21 21

Total number of static billboards 237 237

Revenue

Landmark digital 7.1 7.0

Static 22.3 22.3

Street furniture 0.5 0.2

Retail 2.3 2.2

Transit 5.3 5.3

Total media revenue 37.5 37.1

Print production 22.1 22.2

Total revenue 59.6 59.4

% of total revenue - international 13.6% 14.5%

% of total media revenue - digital 18.8% 18.9%

% of Australian media revenue - digital 24.0% 22.1%

• Delivered digital and static billboards in line

with Prospectus:

• Digital revenue 24.0% of Australian

media revenue.

• Key revenue drivers broadly in line with

Prospectus:

• Strong 4Q in Street Furniture

reflecting new go-to-market strategy.

• Print Production result reflects timing

difference on a large order.

FY15 Financial ResultsBillboards & revenue delivered in line with Prospectus


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2015

Pro forma

Actual

2014

Pro forma

Actual

% Change

Revenue 59.6 44.1 35.1%

Cost of media sites and production (35.3) (24.8) 41.9%

Gross profit 24.4 19.4 25.7%

Operating expenses (19.7) (15.6) 26.3%

EBITDA 4.7 3.7 27.0%

D&A (4.0) (4.7) (12.8%)

EBIT (before significant items) 0.6 (1.0) (160.0%)

Significant items1 (5.3) 2.6 (303.8%)

EBIT (4.7) 1.6 (393.7%)

Interest (0.3) (0.3) 0.0%

Tax 0.7 (0.0) nmf

NPAT (4.3) 1.3 (430.8%)

NPATA (before significant items) 2.6 1.0 160.0%

• Revenue growth reflects expanded

platform and uplift from Digital.

• Decline in gross margin reflects change in

revenue mix.

• Growth in contribution from Digital and

now owned sites, which were previously

represented, to drive an improvement in

gross margin in FY16.

• Increase in operating expenses reflects

investment in development, operations

and sales infrastructure to support

growth.

1. See slide 27 in the Appendices for further details in significant items

FY15 Financial ResultsStrong uplift on FY14 financial performance


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2015

Pro forma

Actual

2014

Pro forma

Actual

Total number of landmark digital billboards 21 12

Total number of static billboards 237 108

Revenue

Landmark digital 7.1 3.0

Static 22.3 13.6

Street furniture 0.5 0.0

Retail 2.3 0.0

Transit 5.3 4.9

Total media revenue 37.5 21.6

Print production 22.1 22.6

Total revenue 59.6 44.1

% of total revenue - international 13.6% 18.4%

% of total media revenue - digital 18.8% 14.1%

% of Australian media revenue - digital 24.0% 21.0%

• Significant growth in landmark digital and

static billboards, reflecting organic growth

and inventory development.

• Digital revenue 24.0% of Australian media

revenue.

• Gold Coast Street Furniture platform and

Retail in New Zealand delivering strategic

footprint in key target markets.

FY15 Financial ResultsExpanded platform driving revenue growth


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2015

Statutory

Actual

Cash and cash equivalents 21.4

Trade and other receivables 9.9

Inventories 0.6

PP&E 19.0

Intangibles 31.5

Goodwill 61.9

Other assets 11.4

Total assets 155.7

Trade and other payables 10.3

Borrowings 3.1

Financial liabilities 21.6

Other liabilities 9.7

Total liabilities 44.7

Net assets 111.0

• Cash balance includes residual IPO proceeds to be

applied to remaining IPO Acquisitions.

• Financial liabilities relate to deferred consideration

associated with the IPO Acquisitions.

• $7.6m consideration for Drive By Media paid

post-balance date.

• Additional $5.7m due in FY16.

• Remaining $8.3m due in FY17-FY18.

• Cash reserves, operating cash flow and undrawn

bank facilities available to fund growth plans.

FY15 Financial ResultsBalance Sheet


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2015

Pro forma

Actual

2015

Pro forma

Forecast

EBITDA 4.7 3.1

Non-cash items in EBITDA 0.4 0.8

Change in working capital 0.0 (2.3)

Net free cash flow before capital expenditure 5.1 1.6

Capital expenditure (2.8) (6.1)

Net free cash flow before financing and tax 2.3 (4.5)

• CAPEX deferred through improved

payment terms.

• Very strong EBITDA conversion to

cash flow.

FY15 Financial ResultsCash Flow


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2015

Pro forma

Actual

Pro forma net cash flow 0.6

Acquisition costs (68.7)

Pro forma full year impact of acquisitions (6.1)

Proceeds from issue of shares 95.0

IPO transaction costs (5.9)

Net proceeds from issue of convertible notes 9.5

Repayment of related party payables (3.0)

Statutory net cash flow 21.4

• Pro forma adjustments reflect the

acquisition outflows & costs of the

IPO offset by the debt and equity

raising

FY15 Financial ResultsCash Flow Reconciliation


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Growth Strategy


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Building a platform of premium quality outdoor media assets, underpinned by a digital development strategy and complemented by strong market coverage in key geographical markets.

• New

developments

• Static to digital

conversions

• Focus on

expanding

quality national

footprint

DIGITAL DEVELOPMENT

• Leverage

existing assets /

concessions

• Securing new

contracts

• High quality

static

development

• Innovation

• Strategic

platforms

secured in

Indonesia and

New Zealand

• Potential for

significant digital

growth

• Leverage

existing

presence

• Disciplined

approach to

value-accretive

opportunities

• Focus on

complementary

businesses

ORGANIC DEVELOPMENT

ASIA PACIFIC ACQUISITIONS / ALLIANCES


Strategic PrioritiesF

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Key FY15 Achievements:

• 18 digital billboards added, including iconic digital landmarks in

premium metropolitan locations.

• Secured new ‘prize’ locations: The Crown, The Toorak.

• Digital represented 24% of Australian Media revenue.

FY16 Priorities:

• The Punt digital billboard switched on in August 2015.

• Secured permits for all remaining digital developments in FY16.

• 7 more sites scheduled to be operational by 31 December 2015.

• Continue to secure pipeline of sites to support Digital growth.

Future Opportunities:

• Significant opportunities from further conversions and

acquisitions across Billboards and Street Furniture.


Digital DevelopmentDigital rollout on track to deliver target of 33 billboards by the end of FY16

Planned Digital Billboards

Current Digital Billboards21

22

11

FY15 FY16

Digital Revenue

24% of Aust Media Revenue FY15

Currently >40% of H1 FY16

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Iconic digital development delivered – The Punt

The Punt | Richmond Station, Melbourne

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• Secured 6 new / redevelopment sites as part of VicTrack concession.

• Expanded sales representation:

• e.g. Manboom, Gold Coast Street Furniture, 24 Outdoor, and Drive By Media, plus Octopus Media

and Paramount Outdoor.

• New go-to-market strategy implemented for Gold Coast Street Furniture.

FY16 Priorities:

• Continue expansion and redevelopment of existing assets/concessions.

• Continue acquisition and upgrade of premium static billboards that complement the existing portfolio.

• Improve performance of acquired portfolios.

• Enhance systems to support asset management and digital content delivery.


Organic DevelopmentStrong track record in leveraging existing assets

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• Developed masterplan for multi-year Auckland Transport concession – signed August 2015.

• Won Bali Airport International and Domestic terminal concessions.

FY16 Priorities:

• Bali Airport upgrade and development to be complete within H1 FY16 – revenue to flow progressively from

September 2015.

• Auckland Transport agreement signed.

• Nine year term including options.

• Assets include: buses, rail and ferries, as well as major transport hubs including stations, interchanges

and city car parks.

• Ability to develop additional and upgrade existing assets.

• Revenue potential of aggregated existing assets realised over the next three years.

Future Opportunities:

• Leverage existing and secure new concessions.

QMS Media Limited | 2015 Financial Year Results |20

Asia PacificLeveraging the existing platform to deliver growth in attractive markets

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• Major acquisitions completed, one remaining site to be delivered H1 FY16:

• QMS APAC

• Octopus Media

• Paramount Outdoor

• Drive By Media

• Blue Media.

FY16 Priorities:

• Finalise integration of IPO Acquisitions.

• Target attractive assets and portfolios that complement existing platform.

• Focus on expanding footprint.

• Expansion of sales representation and partnerships.

• Disciplined approach to acquisitions.


Acquisitions / AlliancesStrengthening position in strategic markets

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FY16 Outlook


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• QMS remains well placed to deliver strong revenue and earnings growth in FY16:

• IPO acquisitions completed, integration with the QMS platform is well progressed.

• Landmark digital expected to underpin growth:

• Full year contribution from landmark digital billboards delivered in FY15.

• Roll-out remains on track to deliver 12 new billboards in FY16 (1 delivered, 11 permitted).

• Contribution from new contracts in Australia and Asia Pacific:

• Auckland Transport and Bali Airport concessions.

• Four new contract wins in Production.

• H1 FY16 revenue forecast to be approximately $41 million.

• Strong start to FY16, with 70% of forecast H1 FY16 Australian media revenue already committed.

• H1 FY16 EBITDA forecast to be approximately $9.5 million.

• H2 FY16 revenue and earnings will benefit from full period impact of new digital screens and uplifts from

Auckland Transport and Bali Airport concessions.

• We remain confident in the business’ growth opportunities, and confirm the dividend policy outlined in the

Prospectus:

• Target payout ratio of 30% - 50% of NPAT.

• No interim dividend in 1H FY16, expect inaugural final dividend in respect of FY16.


FY16 OutlookF

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Appendix


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Business Snapshot

LANDMARK DIGITAL BILLBOARDS

• High profile metro

locations across

Sydney, Melbourne,

Brisbane, Adelaide,

Gold Coast

• Long dwell time

• Maximum audience

exposure

• Premium quality

• Greater than market

average tenure

• Iconic Digital:

• Melbourne Square

• The Flinders

• The Nepean

• The Gabba

• The Valley

• The Hindley

STATIC BILLBOARDS

• Broad metro market

coverage

• Premium quality

assets

• Variety of

formats/sizes

• Greater than market

average tenure

• Future digital

expansion opportunity

• Key concessions:

• VicTrack

• Eastlink

• M2 Motorway

STREET FURNITURE

• Exclusive coverage of

the Gold Coast

• Broadcast and/or

target audience

delivery

• Future digital

expansion opportunity

RETAIL

• Strong New Zealand

footprint

• Proximity targeting


• Westfield

• AMP

• Kiwi

• Range of

independent

shopping centres

TRANSIT

• High profile assets

• Domestic and

International

audiences

• Exclusive Auckland

Transport concession

across multiple transit

formats


• Auckland Transport

• Jakarta Soekarno

Hatta International

Airport

• Bali Ngurah Rai

International Airport

• Medan Kualanamu

International Airport

QMS Media is one of Australia’s leading outdoor advertising companies, with a high quality and growing portfolio of premium long tenure, high yield assets. With a strong presence in the Australian market, QMS is well placed to leverage growth across the Asia Pacific region through its presence in Indonesia and New Zealand.


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Advertiser demand-led development of landmark assets in high

profile metro locations. Conversion of select prime static

billboards to digital – opportunity to increase yield.

Demand driven digital outdoor focus

Business Snapshot

Expand existing market coverage throughout Indonesia and New

Zealand to become dominant regional operator. Footprint

expansion strategy to support the growing demand from regional

advertisers to spend through single source supplier.

Established platform to support Asia Pacific expansion

Long standing relationships with key media agencies and

advertisers in all markets nationally and internationally.

Strong agency & client relationships

QMS implements a selective, strategic digital and static outdoor

site acquisition and development program to complement its

existing portfolio of sites.

Premium portfolio of Australian outdoor assets

QMS’ assets and concessions are contracted under long-term

lease agreements, with an average contract term of more than

13 years remaining on its existing asset portfolio.

Long term tenure

Executive management team each has at least 10 years outdoor

advertising management experience. Highly credentialed in the

commercialisation, development, operation and management of

a variety of outdoor advertising assets.

Specialist management team


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Significant items



2014

Pro forma

Actual

2015

Pro forma

Actual

2015

Pro forma

Forecast

Impairments1 (4.5) (4.6)

Debt forgiveness2 2.6

Provision for bad debts3 (0.8) (0.8)

Significant Items 2.6 (5.3) (5.4)

1. As disclosed in the Prospectus, the $4.5 million impairment in FY2015 was primarily related to a

write down of machinery and equipment in the MMTB business, which formed part of the QMS

APAC Acquisition. These have been classified as significant items as they are one-off in nature and

relate to individual businesses pre-QMS Media’s ownership

2. The debt forgiveness in FY2014 relates to a loan from a related party of Plexity, the holding

company of the Octopus Media outdoor advertising assets.

3. The provision for bad debt expense in FY2015 relates to a loan made to a customer of QMS APAC,

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FY2015

Pro forma

Actual

FY2015

Pro forma

Forecast

Pro forma NPAT (4.3) (7.1)

Pro forma full year impact of acquisitions 5.2 6.8

IPO and acquisition transaction costs (2.8) (0.9)

Convertible notes expense (3.0) (3.0)

Statutory NPAT (4.9) (4.2)

• IPO and acquisition costs reflect higher

transaction costs than forecast and the

expensing of costs in FY15 Pro forma

Actual.

FY15 Financial ResultsStatutory to pro forma reconciliation


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QMS Media Limited’s Financial statements for the period ended 30th June 2015 are presented in accordance with

Australian Accounting Standards.

The company has chosen to include certain “non-financial IFRS” financial information. The Directors believe this non-

IFRS financial information provides useful information to users in measuring financial performance, and allow investors to

compare the performance of the business to the pro forma financial information outlined in the Prospectus.

Non-IFRS and pro forma measures have not been subject to review or audit.

Glossary:

EBIT: earnings before interest and tax

EBITDA: earnings before interest, tax, depreciation and amortisation

EBITA: earnings before interest and amortisation

NPATA: net profit after tax before acquired amortisation, non-cash interest expense and significant items net of tax to

NPAT (after minorities)


Important noticeF

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This document is issued by QMS Media Limited ACN 603 037 341 (“QMS”) to provide summary information about QMS and its associated entities and their activities as

known by QMS at the date of this document. The information contained in this document is of general background and does not purport to be complete.

The information set out in this document does not constitute or purport to be a securities or other recommendation by QMS or any other person and has been prepared

without taking into account the objectives, financial situation or needs of any recipient or other person. The information in this document does not constitute financial

product advice (nor investment, taxation or legal advice). This document presents financial information on both a statutory basis (prepared in accordance with Australian

Accounting Standards that comply with International Financial Reporting Standards) as well as information provided on a non-IFRS basis. The distribution of this

presentation including in jurisdictions outside of Australia may be restricted by law. Any person who receives this presentation must seek advice on and observe any such

restrictions. This presentation is not, and does not constitute, an offer to sell or the solicitation, invitation or recommendation to purchase any securities in any jurisdiction

and neither this presentation nor anything contained herein shall form the basis of any contract or commitment. This presentation may not be distributed or released,

directly or indirectly, in the United States.

QMS does not represent or warrant that this document is complete or that it contains all material information about QMS or that a prospective investor may require in

evaluating a possible investment in QMS. Nothing contained in this document nor any information made available to you is, or shall be relied upon as, a promise,

representation, warranty or guarantee, whether as to the past, present or the future.

To the maximum extent permitted by law, QMS, its respective officers, employees, related bodies corporate, affiliates, agents or advisers expressly disclaims any and all

liability (including without limitation for negligence) for any statements, representations or warranties or in relation to the accuracy or completeness of the information,

statements, opinions or matters, express or implied, contained in, arising out of or derived from, or for omissions from, this document including, without limitation, any

financial information, any estimates or projections and any other financial information derived therefrom. In particular, this document does not constitute, and shall not be

relied upon as, a promise, representation, warranty or guarantee as to the past, present or the future performance or activities of QMS.

This document contains certain forward-looking statements and opinion (including forecast financial information) which are provided as a general guide only and should

not be relied on as an indication or guarantee of future performance which involves known and unknown risks, uncertainties and other factors, many of which are outside

the control of QMS. Past performance is not necessarily a guide to future performance and no statement, representation or warranty is made by any person as to the

likelihood of achievement or reasonableness of any forward looking statements, forecast financial information or other forecast.

All figures in this document are in Australian dollars (AUD) unless stated otherwise. The information in this document remains subject to change without notice.

This presentation should be read in conjunction with QMS periodic and continuous disclosure announcements lodged with ASX, which are available at www.asx.com.au


Important notice and disclaimerF

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Thank You

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