2017 FINANCIAL HALF YEAR RESULTS PRESENTATION 27 FEBRUARY 2017 BARCLAY NETTLEFOLD, CEO PETER CARGIN, CFO
AGENDA HIGHLIGHTS • OPERATIONAL REVIEW & STRATEGY • H1 FY17 FINANCIAL RESULTS • FY17 OUTLOOK • APPENDIX • THE MURRAY | WA QMS Media Limited | H1 2017 Financial Year Results | 2
HIGHLIGHTS THE KING | VIC QMS Media Limited | H1 2017 Financial Year Results | 3
H1 FY17 FINANCIAL HIGHLIGHTS DELIVERING ON RESULTS REVENUE 78% TO $79m UNDERLYING EBITDA 67% TO $17.9m NPAT 32% TO $7.5m NPATA 51% TO $10.3m CASH CONVERSION % 70 bps TO 90% NET DEBT / EBITDA 0.5x DIVIDEND CPS 0.8 FY17 UNDERLYING EBITDA GUIDANCE $37.0m NB. Percentage increase is based on prior comparative period QMS Media Limited | H1 2017 Financial Year Results | 4
H1 FY17 OPERATIONAL HIGHLIGHTS DELIVERING ON DIGITAL & ACQUISITIONS Delivery on strong digital pipeline in Australia and New Zealand. DIGITAL 16 landmark digital billboards delivered H1. • On track for 68+ by end FY17. • Launch of QMS Sport as part of multi-platform offering: OAMM, LIVE Docklands and Sportsmate. • ACQUISITIONS Coordinated sales platform across outdoor, stadia, social, • mobile and experiential asset bases. DATA, Investment in research, data and analytics via Datalab TECHNOLOGY & and Digilab expansion. ANALYTICS QMS Media Limited | H1 2017 Financial Year Results | 5
QMS REVENUE GROWTH OUTPERFORMING IN GROWING MARKETS DIGITAL REVENUE 40% 66% VS of Australian OOH of QMS Australian industry revenue media revenue Source: OMA – Dec 2016 Source: OMA, OMANZ QMS Media Limited | H1 2017 Financial Year Results | 6
OPERATIONAL REVIEW & STRATEGY THE ICB | QLD QMS Media Limited | H1 2017 Financial Year Results | 7
FY 17 STRATEGIC PRIORITIES UNLOCKING ADDITIONAL VALUE MULTI-PLATFORM ENGAGEMENT: QMS Sport • OAMM, LIVE Docklands, Sportsmate • Increased digital screen coverage CONTENT CREATION & APPLICATIONS: • Expand content capabilities across new and existing portfolio to engage with audiences DATA, TECHNOLOGY & ANALYTICS: • Investment in Research, Data and Analytics. • Launched the Datalab – epicentre of QMS’ measurement and audience analysis. • Provides accountable, engaging audience driven insights offering clients tailored solutions to ensure effective outdoor campaigns. QMS Media Limited | H1 2017 Financial Year Results | 8
DIGITAL DEVELOPMENT STRONG PIPELINE GROWTH IN DIGITAL MEDIA REVENUE AUSTRALIA NEW ZEALAND Delivering strong digital pipeline in Australia and New Zealand. • 16 new digital sites delivered in H1 FY17. • Additional 19 digital sites approved for development. • Significant uplift in digital revenue contribution – now 43% of Total Group Media Revenue. Ongoing small format development complements landmark H1 FY16 H1 FY17 H1 FY16 H1 FY17 digital presence in strategic markets. • 3,531 digital screens across Gold Coast Street Furniture, Bali Airport, Auckland Transport Commuter Network and Sports IPTV DIGITAL DEVELOPMENT PIPELINE screens. Dynamic campaign capabilities driven by Digilab. • Now with physical presence in Melbourne and Sydney to showcase capabilities and foster campaign innovation. QMS Media Limited | H1 2017 Financial Year Results | 9
NEW SITES DELIVERED TO PLAN BREAKY CREEK | QLD AUCKLAND | NZ THE GATE | VIC WELLINGTON | NZ THE BURLEIGH | QLD QMS Media Limited | H1 2017 Financial Year Results | 10
AUSTRALIA EXPANDING GEOGRAPHICAL COVERAGE AND AUDIENCE Ongoing enhancement of Australian portfolio, coverage and audience reach. • Developments, conversions and acquisitions providing improved coverage in major capital cities and regional centres. • Quality static inventory delivering results. Expansion into Sports advertising provides access to high-value, engaged audiences in key markets. • Investments in OAMM, LIVE Docklands and Sportsmate completed in H1. • Complements QMS’ existing portfolio: Extension of dynamic digital capabilities across broader Sports asset base. Provides access to millions of engaged sports attendees and broadcast viewers each year. Enhances coverage in key markets (Sydney, New Zealand). Ability to foster deep audience engagement via co-ordinated campaigns across outdoor and in-stadia assets, digital (including social and mobile integration) and experiential. • Integration progressing well, new contracts/extensions secured since acquisition: • Sydney Cricket Ground Trust. • Netball Australia. • Australian Rugby Union. QMS Media Limited | H1 2017 Financial Year Results | 11
NEW ZEALAND STRENGTHENING DIGITAL MARKET POSITION Leading position in landmark digital billboards. • Landmark digital pipeline progressing well, with 9 new landmark digital billboards delivered H1 FY17. • Includes some of New Zealand’s most iconic locations: • Britomart Towers • Downtown BRITOMART TOWERS • Fanshawe Blades Ongoing rollout of Auckland Transport. • Commuter Digital Network ready for launch across major train, bus and ferry terminals in H2 FY17. • First phase development of 39 fully animated, small format digital screens impacting commuters entering and exiting the terminals as well as on platform. • Multi-platform transit media solution providing touchpoints across a world class digital network, in addition to billboards and experiential media. COMMUTER NETWORK QMS Media Limited | H1 2017 Financial Year Results | 12
H1 FY17 FINANCIAL RESULTS FANSHAWE BLADES | NZ QMS Media Limited | H1 2017 Financial Year Results | 13
STRONG RESULT DRIVEN BY DIGITAL ROLLOUT AND ACQUISITIONS H1 FY17 H1 FY16 Actual Actual Change • Result underpinned by the continued growth in our digital portfolio and ($ million) ($ million) % contributions from acquisitions: Revenue - statutory 79.0 44.4 78% • Revenue increased 78% to $79m. EBITDA 17.3 9.9 75% • Underlying EBITDA increased 67% to $17.9m. EBITDA - underlying 17.9 10.7 67% • Underlying EBITDA margin 23%, reflecting contribution from New Zealand EBITDA Margin - underlying 23% 24% and investment in overhead. NPAT 7.5 5.7 32% • NPATA increased 51% to $10.3m. NPATA 10.3 6.8 51% • Significantly stronger operating cash conversion in H1 FY17 vs H1 FY16. EPS (cents) 2.3 2.2 5% • Interim fully franked dividend of 0.8 cents per share (cps) declared, consistent Operating Cash Conversion % 90% 19% with payout ratio range. Net Debt / EBITDA ratio (x) 0.5x 0.2x Interim dividend (cents per share) 0.8 - Note: NPATA defined as Net Profit After Tax, before Amortisation Underlying numbers used throughout this presentation exclude non-underlying costs as detailed in the Appendix on Slide 24 in order to provide a more meaningful comparison of the performance of the business. QMS Media Limited | H1 2017 Financial Year Results | 14
EXPANDED PLATFORM DRIVING SIGNIFICANT REVENUE AND EARNINGS GROWTH H1 FY17 H1 FY16 • Revenue and earnings uplift reflects: Actual Actual Change • Delivery on digital development strategy. ($ million) ($ million) % • Expanded platform, including contribution from acquisitions. Revenue 79.0 44.4 78% Cost of sales (40.3) (21.8) 85% • Slight reduction in gross profit margin to 49.0%, reflecting the increased contribution Gross profit 38.7 22.6 71% Gross profit margin 49% 51% from New Zealand. Operating expenses (21.4) (12.7) 69% • Increase in operating expenses reflects the ongoing investment in systems and EBITDA 17.3 9.9 75% resources to support our growth initiatives. Non-underlying items 1 0.6 0.8 Underlying EBITDA 17.9 10.7 67% • Depreciation and amortisation increase due to the digital rollout and acquisitions. Underlying EBITDA margin 23% 24% D&A (5.5) (2.2) 150% • Finance costs reflect increased borrowings and include a one-off write-off of EBIT 11.8 7.7 53% capitalised borrowing costs following the refinancing of banking facilities. Net finance costs (1.7) (0.4) 325% Tax (2.6) (1.7) 53% • OAMM acquisition completed in December 2016 contributed $0.2m EBITDA. NPAT 7.5 5.7 32% Amortisation 2.8 1.1 154% NPATA 10.3 6.8 51% 1. Non-underlying items: H1 FY17 relates to acquisition, restructuring and integration costs $0.6m. QMS Media Limited | H1 2017 Financial Year Results | 15
STRONG PERFORMANCE ACROSS AUSTRALIA AND NEW ZEALAND REVENUE BREAKDOWN • 28% growth in Australia, driven by digital development. • 513% growth in New Zealand, due to a full period contribution from the acquisitions and digital development. • 12% growth in Other (Indonesia), reflecting the Bali Airport development. QMS Media Limited | H1 2017 Financial Year Results | 16
CONTINUED GROWTH ACROSS DIGITAL AND STATIC • Growth across all revenue categories, in particular landmark digital REVENUE BY FORMAT and static billboards, reflecting organic growth, inventory development and acquisitions. % H1 FY17 H1 FY16 Change Landmark digital billboards 61 33 84.8% Small format digital screens 3,531 - n/m Static billboards 791 691 14.5% Small format static 662 - n/m QMS Media Limited | H1 2017 Financial Year Results | 17
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