F Y17 RE SUL T S T ue sda y 20 F e brua ry 2018 Age nda 2017 - - PowerPoint PPT Presentation

F Y17 RE SUL T S

T ue sda y 20 F e brua ry 2018

2017

• Hig hlig hts
• Re sults

2018

• Ob se rva tio ns

–

Out-o f-Ho me industry

–

APN Outdo o r

• Co ntra c t re ne wa ls
• F
• c us a nd o b je c tive s
• T

ra ding upda te

Age nda

• up L

2017 Highlights

2017 highlights

• 38 ne w e lite d ig ita l b illb o a rd s ro lle d o ut
• Sig nific a nt c o ntra c t re ne wa ls, e xpo sure fo r b o th 2018 a nd

2019 re d uc e d to sing le d ig its

• Xtra c kT

V vid e o ne two rk e xpa nsio n to Pe rth

• Ca mpa ig n re po rting syste ms
• Ca lib re NZ Aud ie nc e me a sure me nt syste m
• T

ra nsit F a c to r pro prie ta ry re se a rc h

DE L IVE RE D

2017 IN NUMBE RS ‘

’

Revenue 4% to $342.9m U nder lying E B I T DA (1) 4% to $90.3m U nder lying NPAT A (1) 2% to $53.0m Statutor y NPAT 9% to $44.0m (a fte r NRIs) U nder lying E PS (1) 3% to 30.0c ps F Y17 Dividends 1% to 19.2c ps (fully franked) L ever age 1.1x Und e rlying L T M E BIT DA

F Y17 r e sults

Re sults in line with g uida nc e

Inc ome state me nt (under

lying)

$ millio ns F Y17 F Y16 Cha ng e Re ve nue

342.9

330.9 4% Dire c t c o sts (1)

(209.2)

(203.3) 3%

Gr

• ss mar

gin 133.7

127.6 5% Gro ss Marg in

39.0%

38.6% Ove rhe a ds (1)

(43.4)

(40.9) 6%

Unde r lying E BIT DA (2) 90.3

86.7 4% E BI T DA Marg in

26.3%

26.2% De pre c ia tio n & a mo rtisa tio n

(15.2)

(12.8) 19%

Unde r lying E BIT (2) 75.1

73.9 2% Ne t inte re st e xpe nse

(3.8)

(2.9) 31% Bo rro wing c o sts a mo rtisa tio n

(0.4)

(0.3) 33% T a x e xpe nse

(20.9)

(21.5) (3%)

Unde r lying NPAT (2) 50.0

49.2 2% Amo rtisa tio n (a fte r ta x)

3.0

2.6 15%

Unde r lying NPAT A (2) 53.0

51.8 2% NPAT A Marg in

15.5%

15.7%

• 4% re ve nue impro ve me nt re sulting

in 4% Unde rlying E BI T DA g ro wth

• Gro ss ma rg in impro ve d to 39% with re nt

a s a % o f re ve nue sta b ilising

• Ove rhe a d s inc re a se d b y 6% d rive n b y

c o ntra c t re ne wal c o sts

• D&A re fle c ts inc re ase d c ape x spe nd and

asse t ac quisitio ns ac ro ss F Y16 a nd F Y17

• Inte re st re fle c ts full ye a r impa c t o f

inc re a se d le ve ra g e

Re ve nue by for mat

F Y17 F Y16 %

Comment Billb o a rds

176.7 160.8 10% Re sult b e ne fits fro m dig itisa tio n a nd full ye a r impa c t

• f a c q uisitio ns

T ra nsit

100.2 99.5 1% Stro ng re sult g ive n c urre nt la c k o f dig itisa tio n

• ppo rtunitie s

Airpo rts

40.6 43.8 (7%) L a rg e c lie nts re a llo c a ting mo ne y to o the r fo rma ts Ac tio n pla ns in pla c e to a ddre ss

Ra il

25.4 26.8 (5%) Xtra c kT V ne two rk c o mple te in F Y17 F Y16 re sult wa s a stro ng c o mpa ra tive

T

• tal re ve nue

342.9 330.9 4%

Cla ssic

214.3 216.9 (1%) Yie lds a nd o c c upa nc y ho lding (no rma lise d fo r dig ita l c o nve rsio ns)

Dig ita l

128.6 114.0 13% Dig ita l is 38% o f to ta l re ve nue o n 125 E lite Sc re e ns

T

• tal re ve nue

342.9 330.9 4%

Balanc e she e t

• 0.2

• tal asse ts

• tal liabilitie s

• Stro ng b a la nc e she e t to pursue g ro wth

initia tive s

• L
• we r ta x pro visio n d ue to timing o f

pa yme nts

• Wo rking c a pita l impa c te d b y timing –

95% c a sh re a lisa tio n e xpe c te d g o fo rwa rd run ra te

• Ne t d e b t inc re a se o f $14.9m re la te d to

c a pita l e xpe nd iture a nd wo rking c a pita l

• Ne w d e b t fa c ility o f $200m
• Ca sh a va ila b le a nd und ra wn d e b t
• f $75.1m

1.1x Ne t de b t / Unde rlying L T M E BI T DA

Cash flows and c ape x

• Ca sh c o nve rsio n ra tio o f 91%
• T

a x pa yme nts inc lud e fina l 2016 Austra lia n a nd NZ ta x o f ~ $13m

• T
• ta l c a pe x o f $29.3m in F

Y17 inc lud e s 38 ne w d ig ita l sc re e n b uild s

• 22 ne w d ig ita l sc re e ns in 2H17
• $4.2m o f no n-site c a pe x

$ millio ns F Y17 F Y16 Unde rlying E BI T DA(1) 90.3 86.7 No n-re c urring ite ms (3.8) (0.4) Wo rking c a pita l (4.6) 5.9 OCF b e fo re inte re st a nd ta x 81.9 92.2

Cash c o nve r sion r atio 91% 106%

Inte re st (3.4) (2.5) T a x pa yme nts (30.5) (23.4)

Ope r ating c ash flow 48.0 66.3 OCF % 53% 76%

Ne t de bt r

• ll for

wa r d

2018 obse rva tions a nd pla ns

‘

’

2018 obse r vations Out-of-Home industr y

• L
• ng te rm Ind ustry pro spe c ts re ma in ro b ust
• Aud ie nc e s c o ntinue to g ro w (1)
• Sig nific a nt g ro wth o ppo rtunity a s Out-o f-Ho me a c c o unts

fo r o nly 6% o f Austra lia n a d ve rtising ma rke t

• As a n ind ustry we ne e d to b e tte r se ll the o ppo rtunity o f

Out-o f-Ho me

• Cla ssic a nd d ig ita l inve nto ry b o th ha ve the ir pla c e in the

ma rke t

• Mo d e l a nd se lling o f d ig ita l b illbo a rd s ne e d s to b e

re c o nsid e re d

~6%

Of to ta l Austra lia n a dve rtising ma rke t

47%

Of Austra lia n ma rke t re ve nue is dig ita l (2)

6.0%

AUma rke t (2) g ro wth in 2017

18.0%

NZ ma rke t (3) g ro wth in 2017

2018 obse r vations APN Outdoor

Pre mium in qua lity, lo c a tio n a nd pre se nta tio n

2018 foc us and obje c tive s

• T

he b e st po rtfo lio o f a sse ts a c ro ss Austra lia a nd Ne w Ze a la nd

• Ple nty o f o ppo rtunitie s re ma in in o ur po rtfo lio

a nd o the r fo rma ts

• Ne e d to b e ‘ a ud ie nc e le d ’ ra the r tha n a sse t le d
• F
• c us o n winning b a c k ma rke t sha re
• L

e a n c o st o pe ra to r o ve r la st fe w ye a rs

• Inve sting in inno va tio n a nd te c hno lo g y to d rive

re ve nue

• Busine ss lo st impo rta nt mo me ntum in 2017,

pa rtic ula rly 2H17

• 4. Mome ntum
• 1. APO asse ts
• 2. Sale s
• 3. Costs

Stabilise , Re foc us, Win

F Y18 digital r

• llout pr
• gr

amme

F Y18 g uida nc e o f 20-25 E lite Sc re e ns a c ro ss Austra lia a nd Ne w Ze a la nd

(no te : pho to mo nta g e o f ne w site s unde r de ve lo pme nt)

Pr inc e s Hig hwa y, NSW T ulla ma r ine F r e e wa y, VIC Swa nston Str e e t, VIC Pa r ne ll, NZ Southe r n E xpr e sswa y, SA Sur fe r s Pa r a dise Blvd, QL D

Sydne y Buse s T ulla ma rine F re e wa y Xtra c kT V Vic to ria n Buse s PT A (We st Ra il) MT M Ade la ide b use s, tra ms & tra ins Que e nsla nd Ra il

Signific ant c ontr ac t r e ne wals

RE T AINE D

Yo ung & Ja c kso n Sydne y T ra ins

L

• w c ontr

ac t r e ne wal e xposur e ac r

• ss F

Y18 & F Y19

TR A N S F O R M A TI O N I N N O V A TI O N A C Q U I S I TI O N

Str ate gy going for war d

S mar te r I mpac t

A B R A N D R E F R E S H S A L E S - C E N T R I C F O C U S I M P R O V E D R E P O R T I N G

E X E C U T I V E M A N A G E M E N T R E S T R U C T U R E

T r ansfor mation

S mar te r I mpac t

Innovation

• Online surve y pla tfo rm
• 220,000 Austra lia n & Ne w Ze a la nd

c o nsume rs

• No w live
• L

e a ding da ta a na lytic s pla tfo rm

• Da ta se ts inc lude s: We stpa c , Wo rld

Sma rt, He lix Pe rso na s – Ro y Mo rg a n

• De e pe r a udie nc e insig hts
• Auto ma te d sa le s c a pa b ilitie s
• E

a sie r to pla n a nd b uy

Moving fr

• m asse t le d to audie nc e le d – Phase 1

Ac quisition and c ontr ac ts

• Re te ntio n first po lic y o n re ne wa ls
• F
• c us o n ne w te nd e rs a nd ma rke ts
• M&A hung e r fo r a d ja c e nt o ppo rtunitie s
• M&A hung e r fo r ne w o ppo rtunitie s

T r ading update

• Mitig a ting $7m E

BIT DA Ya rra T ra ms impa c t

• Ye a r-to -d a te tra d ing a t 20 F

e b rua ry 2018 is in line with the Co mpa ny’ s e xpe c ta tio ns

• Ve rsus the prio r c o rre spo nd ing pe rio d :
• 1H18 is up lo w sing le d ig its o n e a rly ind ic a tio ns
• E

xc lud ing Ya rra T ra ms:

• 1Q18 is up lo w sing le d ig its with g o o d visib ility
• 1H18 is up mid sing le d ig its o n e a rly ind ic a tio ns
• Re ve nue a nd E

BIT DA a re ske we d to the se c o nd ha lf o f the ye a r

• APO will b e inve sting ~$2m d uring F

Y18 in inno va tio n a nd ne w syste ms to suppo rt a n a ud ie nc e a nd c usto me r le d g o -to -ma rke t sa le s stra te g y

• Ove rhe a d g ro wth fo r F

Y18 is e xpe c te d to b e 6% - 8% re fle c ting a o ne o ff c o st b a se re se t to suppo rt g ro wth

• Dig ita l b illb o a rd c o nve rsio n ro llo ut c o ntinue s with 20 to 25 ne w d ig ita l

(E lite ) sc re e ns to b e c o mmissio ne d in F

• Y18. Ca pita l e xpe nd iture fo r F

Y18 is e xpe c te d to b e $25m to $30m

• L
• w c o ntra c t re ne wa l e xpo sure in F

Y18 a nd F Y19

Summar y

1. 2017 re sults de live re d to g uida nc e 2. 2018 ha s sta rte d we ll, lo w c o ntra c t re ne wa l e xpo sure fo r 2018 a nd 2019 3. Ne w a ppro a c h g o ing fo rwa rd:

• Building a c ulture o f hig h pe rfo rma nc e a nd sa le s drive n
• Re struc ture d e xe c utive te a m
• F

re sh le a de rship

• Stra te g ie s in pla c e to mo ve fro m a sse t le d to a udie nc e a nd c usto me r

le d

APPE NDICE S

Appe ndix A Re c onc iliation

• No n-re c urring ite ms:
• T

ra nsa c tio n c o sts re late to the te rmina te d me rg e r with o Oh!me d ia (Ma y 2017)

• CE

O re tire me nt c o sts inc luding asso c ia te d le g al and o the r re late d c o sts have be e n e xpe nse d in F Y17

• Po int o f sale busine ss re struc ture d at

printing fac ility – ne g lig ible o ng o ing E BI T DA impac t

• I

mpairme nt o f asse ts re late to inve stme nt asso c ia te d with Catc h te c hno lo g y tria l a nd inve stme nt in a sso c ia te

50.0 49.2 Me rg e r tra nsa c tio n c o sts

3.4

1.1 CE O re tire me nt

1.7

• Po int o f sa le b usine ss

0.9

• Impa irme nt o f a sse ts

2.2

• Gr
• ss non-r

ec ur r ing ite ms 8.2

1.1 T a x o n no n-re c urring ite ms

(2.2)

(0.3)

Ne t non-r e c ur r ing ite ms 6.0

0.8

Statutor y NPAT 44.0

48.4

Appe ndix B Costs

$ millio ns F Y17 F Y16 Chang e Re nt

139.8

134.7 4% Sa le s a nd ma rke ting

31.1

31.3 (1)% Othe r (1)

38.3

37.3 3%

Dir e c t c osts 209.2

203.3 3% Sta ff c o sts

27.1

26.7 1% Ma rke ting

2.7

2.4 13% Othe r (1)

13.6

11.8 15%

Ove r he ads (2) 43.4

40.9 6%

7 4 9 1 26 3 21 4 34 6 139 14 125

Appr

• ved

L ive T

• tal

Pe r th Ade la ide Me lbour ne Sydne y Br isba ne Re g iona l Que e nsla nd

2 2 2 3 1 1

T a ur a ng a Chr istc hur c h Dune din Auc kla nd Ha milton We lling ton

• tal

• tal

• tal

Appe ndix C Digital c ove r age (1)

13

26

F inanc ial infor mation notic e

APN Outdo o r’ s F ina nc ia l Sta te me nts fo r the ye a r e nde d 31 De c e mb e r 2017 a re pre se nte d in a c c o rda nc e with Austra lia n Ac c o unting Sta nda rds a nd inc lude c e rta in no n-I F RS fina nc ia l info rma tio n. T his info rma tio n ha s b e e n inc lude d to a llo w inve sto rs to re la te the pe rfo rma nc e o f the b usine ss to me a sure s use d b y ma na g e me nt a nd the Bo a rd to a sse ss pe rfo rma nc e a nd ma ke de c isio ns o n the a llo c a tio n o f re so urc e s. No n-I F RS a nd Unde rlying me a sure s ha ve no t b e e n sub je c t to a udit o r re vie w.

Glo ssa ry E BI T E a rning s b e fo re inte re st a nd ta x E BI T DA E a rning s b e fo re inte re st, ta x, de pre c ia tio n a nd a mo rtiza tio n L T M L a st twe lve mo nths NRI s No n re c urring ite ms NPAT Ne t pro fit a fte r ta x NPAT A Ne t pro fit a fte r ta x b e fo re a mo rtiza tio n Unde rlying E xc lude s no n-re c urring ite ms c ps Ce nts pe r sha re

Impor tant notic e & disc laime r

• T

• No re pre se nta tio n o r warranty, e xpre ss o r implie d, is ma de a s to the ac c urac y, a de q ua c y o r

• the ma ximum e xte nt pe rmitte d by law, APO, its sub sidia rie s a nd the ir re spe c tive dire c to rs, o ffic e rs,

• mitte d with this pre se nta tio n.
• No re c o mme nda tio n is ma de a s to ho w inve sto rs sho uld make a n inve stme nt de c isio n. I

• T

• the e xte nt tha t c e rta in

• nly a nd sho uld no t b e re lie d upo n a s a n indic atio n o r g uarante e o f future pe rfo rmanc e . F
• rward

• r e xa mple ,

• the r pe rso n, g ive s any re pre se nta tio n, a ssura nc e o r g uarante e that the o c c urre nc e o f the e ve nts