independent news & media plc 2000 full year results 21st march, 2001 all figures in euros unless...
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INDEPENDENT NEWS & MEDIA PLC2000 Full Year Results
21st March, 2001
All figures in Euros unless otherwise stated
• Strong performances in all markets
• Underlying circulations / readerships positive
• New €60m full-colour Irish production facility operational
• Successful integration of the Belfast Telegraph Group
• Chorus launches Ireland’s first Digital service
• iTouch exceeds 1st year targets, after successful IPO
• €1 bn 5-year syndicated facility over-subscribed
2000 HIGHLIGHTS
Turnover by ActivityPublishing 82%Electronic 9%Outdoor Advertising 9%
GROUP PROFILE
Europe8%
UK12%
Ireland24%
Board4%
USA25%
Sir Anthony O'Reilly
27%
Listing Information• Leading international media group with 5 main geographic markets • PLC listed on the Dublin, London and New Zealand Stock Exchanges• Market Capitalisation: €1.5 bn (IR£1.2 bn)• Shareholder Profile:
2000 FULL YEAR RESULTS
* Continuing activities before exceptionals** Before exceptional items and amortisation
(as restated)
2000 1999 Change€m €m %
Turnover 1,342.5 1,168.4 14.9%
Operating Profit * 224.1 187.4 19.6%
Profit Before Tax 155.3 137.7 12.8%
Net Profit 81.3 65.4 24.3%
EPS ** 16.01 14.49 10.5%
DPS 7.50 6.66 12.6%
Weighted shares outstanding (m) 514.4 505.8
Operating Margin * 16.3% 15.6%
HEADLINE NUMBERS
(as restated)
31 Dec. 2000 31 Dec. 1999€m €m
Fixed Assets * 2,584 2,092
Other Net Assets/ (Liabilities) 56 (16)
Net Debt (1,500) (868)
Total Shareholders' Funds 1,140 1,208
Interest Cover (EBITDA/ Interest) 3.7x 4.6x
Net Debt to EBITDA 5.7x 3.9x
* Including the revalued elements of mastheads
SUMMARY BALANCE SHEET
(as restated)
2000 1999 Change€m €m %
OPERATING PROFIT 204.8 185.6 10.3%
Share of Associates & JVs 10.8 (5.8) 286.2%
Depreciation & Amortisation 47.3 41.8 13.2%
EBITDA 262.9 221.6 18.6%
Working Capital Movements (19.3) (22.7) 15.0%
OPERATING CASH FLOW * 243.6 198.9 22.5%
Operating Cash Flow Conversion * 93% 90% 3.2%
* Excluding restructuring payments
SUMMARY CASH FLOWS
Turnover by Market -- 2000Total: €1,342.5m
GROUP TURNOVER BY MARKET
South Africa14%
Ireland25%
Australia24%
New Zealand21%
United Kingdom16%
GROUP PROFITS BY MARKET
Operating Profit by Market -- 2000Total: €224.1m
South Africa10%
Ireland29%
Australia31%
New Zealand24%
United Kingdom6%
7.027.58
8.88
5.36
4.15
10.20
12.68
14.49
16.01
12.28
4.00
5.50
7.00
8.50
10.00
11.50
13.00
14.50
16.00
'91 '92 '93 '94 '95 '96 '97 '98 '99 '00
10 Year C.A.G.R.• Turnover + 24%• Operating Profit * + 31%• Pre-Tax Profit + 36%• Earnings Per Share + 16%• Dividends Per Share + 16%
Earnings per Share (€)(Fully diluted before exceptionals & goodwill amortisation)
10 YEAR PERFORMANCE
* Excluding exceptional items
OPERATIONS REVIEW
1%
19%
18%
62%
Publishing Printing Radio New Media
• No. 1 newspaper publisherNew Zealand Herald 210,436 (+0.3%)57% national daily market shareReadership up 5.9% on last year
• No. 1 regional newspaper publisher8 paid for dailies/ 34 non-dailies
• No. 1 commercial / magazine printer
• No. 1 radio operator (66 stations)
• No. 1 security printer (web/ plastics)
• Turnover by Activity
€ millions 2000 1999 Change
Turnover 282.4 253.3 11.5%
EBITDA * 72.0 66.5 8.3%
Operating Profit * 55.4 49.9 11.0%
Operating Margin * 19.6% 19.7%* Excluding exceptional items
• Exceptionally strong Q1 - America’s Cup
• Increased market share & tight cost control
• Strong performance from Regional division
• 48% Radio share and 55% audience reach
• Trans-Tasman expansion of Security Printing
COMPANY PROFILE
2000 PERFORMANCE DRIVERS
NEW ZEALAND
• Economic indicators positive:- forecast economic growth for 2001 +2.5%- forecast inflation falling to +1.1%- forecast interest rates falling to 5.9%
• Herald to benefit from full year cover price increase and lower distribution costs
• Business Herald re-launch attracting new brand advertisers
• Newsprint prices / supply fixed for 2001
• Full year impact of Security Printing’s Australian acquisitions and potential to expand Asian export market
• Exports from regional New Zealand remain very buoyant
2001 PROSPECTS
Wilson & Horton
• Good revenue growth in 1st half & strong cost control in 2nd half
• Exceptional performance from outdoor - strong occupancies and yields
• Full year of Shared Services benefits
• Broad base of activities
• No. 1 regional publisher in Australia
Queensland and Northern NSW, comprising 14 paid dailies/ +50 non-dailies
• No. 1 outdoor advertising company
Supersites, transit, billboards and street furniture with 65% coverage
• No. 1 radio operator with 11 metro-politan stations with 4.5m listeners
• JV in Pan TV’s World Movies177,000 subscribers
• Turnover by Activity1%21%
36%
42%
Publishing Outdoor Radio New Media
AUSTRALIACOMPANY PROFILE
2000 PERFORMANCE DRIVERS
€ millions 2000 1999 Change
Turnover 325.1 275.7 17.9%
EBITDA * 87.0 75.0 16.0%
Operating Profit * 71.9 63.1 13.9%
Operating Margin * 22.1% 22.9%* Excluding exceptional items
• Economic indicators positive:- Forecast economic growth for 2001 +2.0%- Forecast inflation continuing at subdued levels of 3.0%- Forecast interest rates falling to 5.0%
• Forecast advertising industry growth rates for 2001:Publishing + 3%Broadcasting + 4%Outdoor + 5%
• Low Australian dollar boosting exports and Regional markets• Asian outdoor expansion to deliver immediate profits
APN News & Media
2001 PROSPECTS
• Good growth in circulation - ALL titles upCompetitors generally down
• Increasing readership market share (68%)• Increasing advertising market share
Display market share up to 41%Classified market share up to 50%
• Cost increases held at half the inflation rate• Conde Nast magazine JV above expectations
• No. 1 newspaper publisher / printerThe Star 163,746 (+0.6%)Saturday Star 135,936 (+0.3%)Sunday Independent 40,875 (+1.0%)Cape Argus 77,418 (+0.2%)Weekend Argus 108,474 (+0.2%)Cape Times 48,690(+0.2%)Daily News 65,476(+1.7%)Independent on Saturday 73,668(+0.8%)Sunday Tribune 108,339(+1.8%)
All other titles reported circulation increases
• Turnover by Activity
SOUTH AFRICACOMPANY PROFILE
1%11%
88%
Publishing Printing New Media
2000 PERFORMANCE DRIVERS
€ millions 2000 1999 Change
Turnover 189.1 177.3 6.7%
EBITDA * 28.7 26.6 7.9%
Operating Profit * 24.3 22.2 9.5%
Operating Margin * 12.9% 12.5%* Excluding exceptional items
• Economic indicators positive:- Forecast economic growth for 2001 +3.5%- Forecast inflation falling to +7.0%- Forecast interest rates falling marginally to 14.0%
• Forecast advertising industry growth rates for 2001:
- Newspapers + 8.5%
• Newsprint prices/ supply fixed for 2001
• On-going focus on extending strong circulation and advertising market positions
• Continued positive impact of reduced cost base following successful restructuring in 1999 and tight cost focus in 2000
Independent News & Media (SA)
2001 PROSPECTS
• NationalsHighest circulation level & market share
(9.6%) since 1997 Good growth in advertising (up 12%)New premises with significant cost savings
• RegionalsMargins at top-end of industryCirculation stabilised following market decline
• MagazinesAdvertising growth & market share maintained
• No. 4 quality broadsheet newspaper publisher
The Independent240,000Independent on Sunday 270,000
• No. 1 newspaper publisher in Northern Ireland
• No. 2 paid-for regional newspaper publisher in Greater London area
• No. 1 recruitment magazine publisher
• No. 1 educational courses publisher
• Turnover by Activity1%
10%
18%
14% 57%
Nationals Regionals MagazinesBelfast New Media
UNITED KINGDOMCOMPANY PROFILE
2000 PERFORMANCE DRIVERS
€ millions 2000 1999 Change
Turnover 210.0 151.6 38.5%
EBITDA * 16.1 (3.3)
Operating Profit * 12.4 (5.1)
Operating Margin * 5.9% -3.4%* Excluding exceptional items
1%15%
84%
Publishing Printing New Media
• Acquired from Trinity Mirror in August 2000 for STG£292m
• Earnings enhancing in 1st year
• No. 1 newspaper publisherBelfast Telegraph 112,000Sunday Life 95,000
• No. 1 contract printer2 Goss Metroliners (double-width)
• Turnover by Business Type
• Unique metropolitan franchise
• Excellent track recordProven management / editorial team
• Advertising growth despite overall UK slowdown
Strong recruitment advertising enabling significant yield increases
• Successful re-formatting of The Belfast Telegraph and Sunday Life
Halted decline in circulationEnabled cover price increase
• New product development
• Group editorial resource
• Enhanced printing resource
BELFAST TELEGRAPHCOMPANY PROFILE
FUTURE PROSPECTS
• Economic indicators positive:- Forecast economic growth for 2001 +2.0% to 2.5%- Forecast inflation falling to +2.4%- Forecast interest rates 5.75% and possibly lower
• Forecast newspaper advertising industry growth rates for 2001:- Nationals + 3.2%- Regionals + 1.0%
• Full year impact of Belfast Telegraph acquisition
• New centralised London operations and termination of out-sourced services
Independent News & Media (UK)
2001 PROSPECTS
23%1%
76%
Publishing Distribution New Media
• Growing circulation & readershipMarket share of 51% (including imports)
• Strong growth in advertisingRevenue up 19%
• Successful transition / implementation of €60m Citywest development
• No. 1 newspaper publisherIrish Independent 168,200The Star 95,171Evening Herald 101,200Sunday World 314,022Sunday Independent 308,600
• No. 1 regional newspaper publisher11 titles with weekly circulation of 107,499
• No. 1 newspaper / magazine wholesaler
• Turnover by Business Type
IRELAND€ millions 2000 1999 Change
Turnover 335.9 310.5 8.2%
EBITDA * 74.1 66.4 11.6%
Operating Profit * 66.4 59.4 11.8%
Operating Margin * 19.8% 19.1%* Excluding exceptional items
COMPANY PROFILE
2000 PERFORMANCE DRIVERS
• Economic indicators positive:- Forecast economic growth for 2001 +8.0%- Forecast inflation falling to +4.0%- Forecast interest rates 4.25%
• Successful commissioning / operation of €60m Citywest development with full benefits achieved
lower production headcountcolour out-sourcing eliminatedexplosive growth in colour volumes/ yieldreduction in newsprint usage
• Chorus - digital services roll-out
Independent News & Media (Ire)
2001 PROSPECTS
NEW MEDIA REVIEW
…becoming Ireland's first fully integrated digital TV/ Telecoms network operator
Ireland's 2nd largest cable/ TV transmission operator - jointly owned (50:50) by INM and Liberty Media (USA) - 264,000 subscribers (54% Cable/ 46% MDS) - 555,000 homes passed (60% of all homes in Ireland) - exclusive licence franchise areasLaunched Ireland's first Digital TV Service - Nov. 2000Launched first Digital TV MDS Service - worldwide - Nov. 2000
€ 360m syndicated loan secured August 2000, facilitating: - broadband, high-speed network build - full multi-media bundled Digital TV, Internet & telephonyNTL network: Roll-Out on holdCo-Owner with INM of Unison ISP
DETAILS
Chorus (Ire)
e-Hype
e-Basic• define strategic arenas• systems automation• cover downside
- manage classified migration
- enforce copyright/ regulatory
e-Xecution• brand extension @ marginal cost• marketing cross-promotion• limit cash investment (Ads for
Equity)
• strip away the Hype• don’t “bet the bank”• leverage content & marketing
€ Millions 2000 1999Turnover 7.7 0.4Operating Losses (10.0) (2.1)
Group Web Stats: No. of Web Sites 48 34 Page Impressions / month 100m 34m
Total Investment to DateValue of Quoted InvestmentHeadcount
€78m
€110m203
DIGITAL e-VOLUTION
business 2 business
mobile information
education / databases
broadband - digital TV - telephony
internet - portals
INDEPENDENT DIGITAL
news sitessportclassifiedentertainmentfinancialtravele-commerce
• Geographically diversified - with tight focus on core competencies
• Unique brand leadership positions - dominant in 4 out of 5 markets
• Highly cash generative business
• Clear strategy for operating margin enhancements
• All divisions performing well
• “Hype-Less” new media strategy
• Increasing value of our Irish cable / telephony business
SUMMARY
• Belfast Telegraph acquisition - EPS enhancing• Citywest development further enhancing Irish performance• Track record of unbeatable shareholder return
€1,000 invested in 1973
C.A.G.R.
+ 23%
SHAREHOLDER RETURN – Since 1973
SUMMARY
€336,000
• Core businesses performing well
• Too early for current year forecasts because of uncertainty in global markets
• Focus on cost containment
• Group well positioned for future growth
OUTLOOK
INDEPENDENT NEWS & MEDIA PLC