2016 Financial Full Year Results Presentation 29 August 2016 Barclay Nettlefold, CEO Peter Cargin, CFO
Highlights FY16 Financial Results Growth Strategy Agenda FY17 Outlook Appendix Bunbury | WA
Highlights QMS Media Limited | 2016 Financial Year Results | 3
FY16 Highlights – Strong growth in revenue and earnings EBITDA margin of 24% 1.5 Revenue growth EBITDA growth cps fully franked 88% 477% dividend declared *FY15 Pro Forma QMS Media Limited | 2016 Financial Year Results | 4
FY16 Highlights – Strong industry dynamics OOH Industry Growth CY15 Australia up 17% QMS NZ up 12% 94% Auckland Auckland FY16 Australian media revenue growth H1 CY16 Australia up 18% NZ up 18% Melbourne Source: OMA/OMANZ Melbourne QMS Media Limited | 2016 Financial Year Results | 5
FY16 Highlights – Strong delivery on digital and acquisitions 66+ 88% 49 Landmark digital FY17 digital Landmark digital billboards by pipeline permitted billboards currently end of FY17 operational Wellington | NZ Largest landmark digital billboard Digital provider in New Zealand. 37% 62% VS Revenue of Australian OOH of QMS Australian Successfully completed and industry revenue media revenue integrated all acquisitions. Source: OMA QMS Media Limited | 2016 Financial Year Results | 6
FY16 Financial Results QMS Media Limited | 2016 Financial Year Results | 7
Strong result driven by Digital 2016 2015 • Result underpinned by significant uplift in digital, expanded platform and contributions from acquisitions: June year end Actual Pro forma • Revenue increased 88%. ($ million) ($ million) Revenue 111.8 59.6 • Underlying EBITDA up more than 4.5 times FY15 pro forma, Underlying EBITDA margin up to 24.0%. EBITDA 27.1 4.7 EBITDA – underlying 26.8 4.7 • Digital contribution reflects delivery on development strategy: EBITDA Margin - underlying 24.0% 7.9% • Digital now 61.8% of Australian media revenue, up from 24.0% in FY15. NPAT 13.3 (4.3) • Seasonally stronger operating cash conversion in H2 FY16. EPS (cents) 4.8 (3.3) Operating Cash Conversion % 90.7% 59.6% • Net debt position reflects funding of digital development pipeline and settlements of deferred consideration on IPO acquisitions. Net Debt / EBITDA ratio (x) 0.2x Net cash % of Australian Media Revenue - Digital 61.8% 24.0% • Final fully franked dividend of 1.5 cents per share (cps) declared, consistent Final dividend (cents per share) 1.5 - with payout ratio range. Note: Underlying numbers used throughout this presentation exclude non-underlying revenue and costs as detailed in the Appendix on Slide 26 in order to provide a more meaningful comparison of the performance of the business. The Group was not trading for the full comparative period. Therefore, all FY16 information in this presentation has been compared against the FY15 pro forma results. Refer to Appendix for reconciliation between statutory and underlying results. QMS Media Limited | 2016 Financial Year Results | 8
Expanded platform supporting strong earnings growth 2016 2015 • Revenue and earnings uplift reflects: June year end Actual Pro forma Change • Delivery on digital development strategy. ($ million) ($ million) % Revenue 111.8 59.6 88% • Expanded platform, including contribution from acquisitions. Cost of sales (53.0) (35.3) 50% • Gross margins increased to 52.6% from 40.9%, reflecting greater Gross profit 58.8 24.4 141% contribution from digital and benefit from integrated print production Gross profit margin 52.6% 40.9% business. Operating expenses (31.7) (25.1) 26% • Increase in operating expenses reflects investment in sales, development EBITDA 27.1 (0.7) nm and operations infrastructure to support growth. Non-underlying items 1 (0.3) 5.4 Underlying EBITDA 26.8 4.7 477% • NZ acquisitions completed in Dec 2015 contributed $3.7m EBITDA. Underlying EBITDA margin 24.0% 7.9% D&A (8.0) (4.0) 100% EBIT 19.1 (4.7) nm Net finance costs (0.9) (0.3) 204% Tax (4.9) 0.7 nm NPAT 13.3 (4.3) nm 1. Non-underlying items: FY2016 relates to the release of $2.1m of deferred and contingent consideration relating to IPO acquisitions. This has been offset by $0.7m acquisition transaction costs and $1.1m restructuring and integration costs. FY2015 relates to $4.6m impairment expense and $0.8m provision for bad debts expense which related to individual businesses pre QMS Media’s ownership. QMS Media Limited | 2016 Financial Year Results | 9
Strong performance in Australia and New Zealand Revenue Breakdown Growth in Australian digital revenue FY15 FY16 *FY15 Pro Forma QMS Media Limited | 2016 Financial Year Results | 10
Delivering growth across all platforms 2016 2015 • Growth across all revenue categories, in particular landmark digital and static June year end Actual Pro forma Change billboards, reflecting organic growth, inventory development and acquisitions. ($ million) ($ million) % • Small format digital conversions supporting growth in Transit and Street Total number of landmark digital billboards 45* 21 114% Furniture: Total number of small format digitals 132 - nm • Bali Airport upgrade completed in Feb 2016. Total number of static billboards 642** 237 181% • Gold Coast Street Furniture phase 1 digital conversions completed. Revenue Landmark digital 33.8 7.1 376% • Increase in Transit reflects NZ acquisitions and commencement of Bali Airport concession. Static 31.6 22.3 42% Street furniture 2.2 0.5 340% • Integrated print production business providing margin benefits. Revenue Retail 2.6 2.3 13% growth was up 19%, excluding eliminations. Transit 16.7 5.3 215% Total media revenue 86.9 37.5 132% Print production 22.8 22.1 3% Total underlying revenue 109.7 59.6 84% % of total revenue - international 31.6% 13.6% 18.0% % of total media revenue - digital 40.2% 18.8% 21.4% % of Australian media revenue - digital 61.8% 24.0% 37.8% *One underperforming Australian digital site sold in H2 FY2016, 4 sites completed post year end. **Includes 270 small format billboards. QMS Media Limited | 2016 Financial Year Results | 11
Strong balance sheet, well positioned for growth 2016 2015 June year end Statutory Statutory • Growth in net assets predominantly relates to the NZ ($ million) ($ million) acquisitions and associated capital raising. Cash and cash equivalents 12.6 21.4 Trade and other receivables 23.6 9.9 • Increase in net debt reflects the investment in digital rollout and Property, plant and equipment 56.1 19.0 acquisition payments. Goodwill and Intangible assets 133.9 89.3 • Net debt / EBITDA ratio well within banking covenants. Other assets 15.2 12.0 Total assets 241.4 151.6 • Cash reserves, operating cash flow and undrawn bank facilities available to fund development pipeline, acquisition commitments Trade and other payables 11.6 10.3 and proposed dividends. Loans and borrowings 17.8 3.3 Deferred and contingent consideration 11.0 21.5 • Total bank facilities of $41.1m available to the Group. Other liabilities 29.7 9.6 Total liabilities 70.1 44.7 Net assets 171.3 106.9 Net debt (cash) 5.2 (18.1) Net debt / EBITDA ratio (x) 0.2x Net cash Net debt / (Net Debt + Equity) 3% Net cash QMS Media Limited | 2016 Financial Year Results | 12
Strong cash conversion 2016 2015 • Strong H2 FY16 operating cash conversion due to: June year end Actual Actual • Cash receipts in Q3 from seasonally strong revenues in Q2. ($ million) ($ million) • Additional lunar billing periods in H2. EBITDA – underlying 26.8 4.7 Non-cash items in EBITDA (1.4) 0.4 • Capex reflects continued investment in digital development across the Change in working capital (1.1) (2.3) Group. Operating cash flow 24.3 2.8 • Acquisitions include iSite, ABsee and deferred consideration Operating cash flow conversion % 91% 60% payments from previous IPO acquisitions. Capital Expenditure (26.3) (2.6) Acquisitions (66.6) (71.8) • Digital roll-out and deferred consideration payments partly funded by drawdown on bank facilities. Investing cash flow (92.9) (74.4) Net proceeds from issue of shares 48.5 99.1 Net proceeds from (repayment of) borrowings 13.5 (6.0) Income tax and interest paid (2.5) 0.0 Financing cash flow 59.4 93.1 Net cash flow (9.1) 21.5 QMS Media Limited | 2016 Financial Year Results | 13
Operational Review & Strategy QMS Media Limited | 2016 Financial Year Results | 14
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