INTERIM RESULTS SKY NETWORK TELEVISION LIMITED INTERIM RESULTS DECEMBER 2018
JOHN FELLET CHIEF EXECUTIVE OFFICER Photosport.nz SKY Network Television Limited Interim Results 2019 2
REVENUE Millions 439.8 403.0 Dec-17 Dec-18 Photosport.nz SKY Network Television Limited Interim Results 2019 3 SKY Network Television Limited Annual General Meeting 2018 3
POSITIVE CHANGE IN SUBSCRIBER MOVEMENTS Dec-16 Dec-17 Dec-18-17,406-36,544-46,006 750,321 CUSTOMERS SKY Network Television Limited Interim Results 2019 4
NEW SKY SUBSCRIBERS PROFILE 2018 Former Netflix Subscribers Never had Netflix Netflix 10% 50% 40% SKY Network Television Limited Interim Results 2019 5
REVENUE SATELLITE ARPU $90.00 400 Millions 439.5 403.0 $85.00 $80.00 $84.16 $84.23 300 200 85% SKY customers have SKY Entertainment $75.00 $70.00 $65.00 100 0 Dec-17 Dec-18 $60.00 $55.00 $50.00 Dec 17 Dec 18 SKY Network Television Limited Interim Results 2018 6
SKY Network Television Limited Interim Results 2019 7
NEW CUSTOMERS HAVE IMPROVED RETENTION RATES 120% 100% 80% 60% 40% 20% 0% 0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40 42 Tenure - Months FY16 FY18 SKY Network Television Limited Interim Results 2019 8
CHURN STABILITY 35% 30% 25% 20% 15% 10% 5% 0% Jun 98 Jan 19 SKY Network Television Limited Interim Results 2019 9
CHURN STABILITY 17% 16% 16% 15% 15% 14% 14% Gross Churn Net Churn SKY Network Television Limited Interim Results 2019 10
TOTAL TELEVISION ADVERTISING REVENUE (YOY Quarterly change) Sep 10 Qtr Dec 10 Qtr Mar 11 Qtr Jun 11 Qtr Sep 11 Qtr Dec 11 Qtr Mar 12 Qtr Jun 12 Qtr Sept 12 Qtr Dec 12 Qtr Mar 13 Qtr Jun 13 Qtr Sept 13 Qtr Dec 13 Qtr Mar 14 Qtr Jun 14 Qtr Sept 14 Qtr Dec 14 Qtr Mar 15 Qtr Jun 15 Qtr Sept 15 Qtr Dec 15 Qtr Mar 16 Qtr Jun 16 Qtr Sept 16 Qtr Dec 16 Qtr Mar 17 Qtr Jun 17 Qtr Sept 17 Qtr Dec 17 Qtr Mar 18 Qtr Jun 18 Qtr Sep 18 Qtr Dec 18 Qtr 15% 10% 5% 0% -5% -10% SKY Network Television Limited Interim Results 2019 11
PEAK PUTS (PEOPLE USING TELEVISION) TREND ALL 5+ 35 30 25 20 15 10 5 0 2017 2018 2019 SOURCE Nielsen TAM, Total TV Audience 5+ SKY Network Television Limited Interim Results 2019 12
ADVERTISING REVENUE FOLLOWING MARKET TRENDS Millions 35.1 31.5 27.4 Dec-16 Dec-17 Dec-18 Photosport.nz SKY Network Television Limited Interim Results 2019 13 SKY Network Television Limited Annual General Meeting 2018 13
LOWER OPERATING COSTS Millions 308.3 286.3 274.7 Dec-16 Dec-17 Dec-18 SKY Network Television Limited Interim Results 2019 14
CONTINUED INVESTMENT IN WORLD CLASS CONTENT 32% 34% 40% 38% 40% Dec-14 Dec-15 Dec-16 Dec-17 Dec-18 PROGRAMMING COSTS % REVENUE SKY Network Television Limited Interim Results 2019 15
WORLD CLASS SPORT Photosport.nz SKY Network Television Limited Interim Results 2018 16 Photosport.nz
SKY Network Television Limited Interim Results 2018 17
AWARD WINNING SHOWS 2018 Universal Studios. All Rights Reserved. SKY Network Television Limited Interim Results 2018 18 2018 Warner Bros. Entertainment Inc. and Metro-Goldwyn-Mayer Pictures Inc. All Rights Reserved.
GAME OF THRONES APRIL 2019 SKY Network Television Limited Interim Results 2018 19
STRONG NET PROFIT Millions 59.5 66.7 53.6 Dec-16 Dec-17 Dec-18 Photosport.nz SKY Network Television Limited Interim Results 2019 20 SKY Network Television Limited Annual General Meeting 2018 20
SALE OF SKY Network Television Limited Interim Results 2018 21
INVESTING MORE IN DEVELOPING FUTURE PRODUCTS Millions 28.2 38.8 Dec-17 CAPEX Dec-18 Photosport.nz SKY Network Television Limited Interim Results 2018 22 SKY Network Television Limited Annual General Meeting 2018 22
IMPROVED CUSTOMER VIEWING EXPERIENCE UNDERSTANDING OUR CUSTOMERS AND DELIVERING GREAT EXPERIENCES
SKY HD CHANNELS TO BE EXPANDED AND MADE AVAILABLE TO ALL AS PART OF THE PRICE CHANGES CHANNEL PACKAGE HD Ticket OLD RATE $9.99 per month NEW RATE 1 APRIL 2019 No charge SKY Starter $24.91 per month $25.99 per month SKY Entertainment $25 per month $25.50 per month SKY Sport $29.90 per month $31.99 per month Photosport.nz SKY Network Television Limited Interim Results 2018 24
NZ BASED COMPANY 2018 1,100 EMPLOYEES INCOME TAX GST PAYE $40 MILLION $91.6 MILLION $29.6 MILLION SKY Network Television Limited Interim Results 2018 25
IMPROVED CUSTOMER STREAMING EXPERIENCE ENHANCED DOWNLOAD TO GO SKY Network Television Limited Interim Results 2018 26
SKY Network Television Limited Interim Results 2019 27
1000 Movies ON DEMAND SKY Network Television Limited Interim Results 2018 28
IP CONNECTED SUBSCRIBERS CONTINUES TO GROW SATELLITE ONLY HYBRID IP CONNECTED STREAMING 2013 2014 2015 2016 2017 2018 SKY Network Television Limited Interim Results 2018 29
100% NZ Reach SKY Network Television Limited Interim Results 2018 30
FUNDING PROFILE FACILITY DRAWN MARGIN MATURITY Millions REDUCTION OF DEBT 353 290 Bank Debt $200m $107m 280bp Jul 2022 213 Bond $100m $100m Fixed rate at 6.25% Mar 2021 Dec-16 Dec-17 Dec-18 SKY 2019 Interim Results 2018 SKY Network Television Limited Interim Results 2018 2019 31
FOREIGN CURRENCY HEDGING For USD exposures 100% hedged for 6 months 30 June 2019 @ 0.7205 67% hedged for June 2020 year @ 0.7093 25% hedged for June 2021 year @ 0.7038 For AUD exposures 89% hedged for 6 months 30 June 2019 @ 0.9272 82% hedged for 30 June 2020 @ 0.9349 46% hedged for 30 June 2021 @ 0.9183 Average $US payment rate for Opex for the 6 months to December 18 @ 0.7090 SKY 2019 Interim Results 2018
DIVIDEND The Board has declared a fully imputed dividend of 7.5 cps ($29.2m) for the half year ending December 2018 A supplementary dividend for the same period of 1.3235 has been paid to non-residents. 2019 2018 2017 2016 2015 2014 2013 2012 2011 2010 Interim 7.5 7.5 15.0 15.0 15.0 14.0 12.0 11.0 8.0 7.0 Final 7.5 12.5 15.0 15.0 15.0 12.0 11.0 10.5 7.0 Ordinary Total 15.0 27.5 30.0 30.0 29.0 24.0 22.0 18.5 14.0 Special 32.0 25.0 TOTAL 15.0 27.5 30.0 30.0 29.0 24.0 54.0 43.5 14.0 SKY Network Television Limited Interim Results 2019 33
GUIDANCE Sky s FY19 guidance is: $m REVENUE 790-795 EBITDA 230 235 NPAT 85 90 CAPEX 70 75 SKY Network Television Limited Interim Results 2019 34
INTERIM RESULTS SKY NETWORK TELEVISION LIMITED INTERIM RESULTS DECEMBER 2018 SKY Network Television Limited Interim Results 2018 35
FINANCIAL DETAIL APPENDIX INTERIM RESULTS 2018
RESULTS SUMMARY 2017 2018 % Change Revenue 439.8 403.0 (8.4%) Operating expenses 286.3 274.7 (4.1%) EBITDA 153.5 128.3 (16.4%) Depn & Amort 51.2 47.3 (7.6%) EBIT 102.3 81.0 (20.8%) Interest 9.6 6.5 (32.3%) Tax 26.0 20.9 (19.6%) NET PROFIT/(LOSS) 66.7 53.6 (19.6%)0 SKY 2019 Interim Results 2019
EXPENSE ANALYSIS 2017 2018 % Change Programming 166.9 161.7 (3.1%) Subscriber related costs 48.4 42.1 (13.0%) Broadcasting and infrastructure 46.5 46.8 (0.6%) Depreciation and amortisation 51.2 47.3 (7.6%) Other costs 24.6 24.1 (2.0%) TOTAL EXPENSE 337.6 322.0 (4.6%) SKY 2019 Interim Results 2019
REVENUE ANALYSIS Residential Satellite subscriptions 2017 2018 % Change 357.5 322.0 (9.9%) Other subscriptions 42.7 46.1 8.0% Advertising 31.5 27.4 (12.7%) Other Income 8.2 7.5 (8.5%) TOTAL REVENUE 439.9 403.0 (8.4%) SKY 2019 Interim Results 2019