SKY NETWORK TELEVISION LIMITED BOND ISSUE ROADSHOW FEBRUARY 2014 |
SPEAKERS AND AGENDA Spe Speak akers ers John Fellet – Chief Executive Jason Hollingworth – Chief Financial Officer Agenda enda Offer highlights SKY overview Business overview Business model Business operations Financial results Key Bond terms Issue timetable | Page 2
OFFER HIGHLIGHTS Issuer Issuer SKY Network Television Limited Bonds Bonds Unsecured, unsubordinated fixed rate debt obligations (“Bonds”) Issue Size Issue Size Up to $100 million Maturity Maturity 31 March 2021 (7 years) Inter Interest Rate st Rate [6.25-6.50]% p.a. paid quarterly in arrears Interest Rate to be announced on or before Opening Date, 3 March 2014 Cr Credit Rating edit Rating Not rated Applications Applicat ns Minimum $5,000 and multiples of $1,000 thereafter Brok Br okerage erage Brokerage 0.75% Firm 0.50% Early Bir Early Bird Payable at the Interest Rate Inter Interest st Quotat Quot ation Application has been made to NZX Limited (NZX) for permission to quote the Bonds on the NZX Debt Market (NZDX) and all the requirements of NZX relating to that application that can be complied with on or before the date of the Simplified Disclosure Prospectus dated 24 February 2014 (Prospectus) have been duly complied with. However NZX accepts no responsibility for any statement in the Prospectus or this Issue Flyer. NZX is a registered exchange which operates a registered market, regulated under the Securities Markets Act 1988 Joint L Joint Lead ad ANZ, BNZ, Westpac | Page 3 Managers Managers
BUSINESS OVERVIEW HIGHLIGHTS AT DECEMBER 2013 (SKY GROUP UNAUDITED - 6 MONTHS ) 1,217 Subscriber Net Gain 857,115 Subscribers ARPU $77.51 Net Profit $82.1m 13.3% Subscriber Churn In 49% of NZ households MYSKY subscribers Programming costs 30% 1150 employees 56.7% of customers of SKY revenue 117 Channels Broadcasted | Page 4
Page 5 Dec-13 Jun-13 Dec-12 Jun-12 Dec-11 Other Jun-11 Dec-10 Jun-10 Dec-09 mySKY Jun-09 Dec-08 THE SKY JOURNEY SO FAR Jun-08 Dec-07 Jun-07 Wholesale SKY Dec-06 Jun-06 Jun-05 Dec-04 Jun-04 Dec-03 Jun-03 Dec-02 Std SKY Jun-02 Jun-01 Jun-00 Jun-99 Jun-98 UHF Jun-97 Jun-96 Jun-95 Jun-94 Jun-93 | Jun-92 Jun-91 900 800 700 600 500 400 300 200 100 0 Subscribers in Thousands
Page 6 Jun-13 Dec-12 Jun-12 MOVING ANNUAL SUBSCRIBER CHURN Dec-11 Jun-11 Dec-10 Jun-10 Dec-09 Jun-09 Dec-08 Jun-08 Dec-07 Jun-07 Dec-06 Jun-06 Dec-05 Jun-05 Dec-04 Jun-04 Dec-03 Jun-03 Dec-02 Jun-02 Dec-01 Jun-01 Dec-00 Jun-00 Dec-99 Jun-99 Dec-98 | Jun-98 35% 30% 25% 20% 15% 10% 5% 0%
NET GAIN BY MONTH 30 Thousands s in Thousands 25 20 bscribers in 2009 Subscriber 15 2010 2011 10 2012 2013 5 0 5 Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun | Page 7
AVERAGE MONTHLY REVENUE (ARPU) $80.00 RESIDENTIAL SUBSCRIBERS AT JUNE 30 $75.83 $75.00 $71.93 $70.45 $70.00 $67.61 $64.00 $65.00 $62.10 $60.00 $55.00 $50.00 2008 2009 2010 2011 2012 2013 | Page 8
SKYWATCH | Page 9
SKY PREMIUM PRODUCTS HD Access Ticket AT JUNE 30 2.75 Millions Millions 2.7 2.65 2.6 2.55 2.5 2.45 2011 2012 2013 | Page 10
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FINANCIAL TRENDS SKY GROUP AT JUNE 30 (DRAWN FROM AUDITED FINANCIAL INFORMATION) 1000 Capital Spend ($m) Revenue ($m) 885 150.0 132.2 139.0 139.6 132.3 843 797 800 742 119.5 692 659 619 100.0 600 83.6 81.4 400 50.0 200 0 ‐ 2007 2008 2009 2010 2011 2012 2013 2007 2008 2009 2010 2011 2012 2013 150.0 132.2 Net Profit ($m) Programming Cost % 120.3 122.8 103.0 97.7 33% 100.0 88.1 33% 33% 77.9 33% 32% 32% 32% 50.0 ‐ 2007 2008 2009 2010 2011 2012 2013 2007 2008 2009 2010 2011 2012 2013 | Page 12
SKY GROUP at 30 June 2013 (DRAWN FROM AUDITED FINANCIAL INFORMATION) Revenue I nstallation Advertising 1% Other 8% subscriptions 7% Other Income 2% Subscriptions residential Operating expense 82% Advertising 3% Sales and Other marketing 6% administrative 5% Programme operations 9% Programming rights 34% Subscriber management 10% Broadcasting and Depreciation and infrastructure amortisation 13% 20%
FINANCIAL PERFORMANCE SKY GROUP RESULTS SUMMARY $m Dec 2013 Dec 2012 June 2013 (6 months) (6 months) (1 year) unaudited unaudited audited Revenue 456.4 443.3 885.0 Operating Expenses 266.0 266.2 531.9 EBITDA 190.4 177.1 353.1 Depn & Amort 61.8 67.6 134.3 EBIT 128.6 109.5 218.8 Interest/Finance Expense 14.4 15.9 29.8 (net) Tax 32.1 26.3 56.8 NET PROFIT after TAX 82.1 67.3 132.2 Non-Controlling Interest -1.4 -0.8 -5.0 Attributable to equity holders 83.5 68.1 137.2 of the Company | Page 14
FINANCIAL PERFORMANCE SKY PARENT BALANCE SHEET $m Dec 2013 Dec 2012 June 2013 (6 months) (6 months) (1 year) unaudited unaudited Audited Current Assets 138.4 148.7 127.6 Non – Current Assets* 1,740.9 1,772.8 1,749.9 Total Assets 1,879.3 1,921.5 1,877.5 Current Liabilities 184.9 170.4 178.7 Non – Current Liabilities 476.8 601.3 521.0 Total Liabilities 661.7 771.7 699.7 Equity 1,217.6 1,149.8 1,177.8 Total Equity and Liabilities 1,879.3 1,921.5 1,877.5 * Q * Goodwill 1,422.5 1,422.5 1,422.5 | Page 15
DEBT OVERVIEW AT DECEMBER 2013 FACILITY DRAWN MATURITY Bank Debt $400m $227m Jul 2018 Bond $200m $200m Oct 2016 | Page 16
OFFER HIGHLIGHTS Issuer Issuer SKY Network Television Limited Bonds Bonds Unsecured, unsubordinated fixed rate debt obligations Issue Size Issue Size Up to $100m Maturity Maturity 31 March 2021 (7 years), unless redeemed earlier Interest Rate Inter st Rate [6.25-6.50%] p.a. paid quarterly in arrears Interest rate to be announced on or before Opening Date, 3 March 2014 Early R Early Redemption demption option option SKY may in its sole discretion make a full or pro rata repayment to Bondholders on each of 31 March 2017, 31 March 2018, 31 March 2018, 31 March 2019 or 31 March 2020. . | Page 17
TIMETABL E Pr Prospectus R ospectus Register gistered ed 24 February 2014 Ro Roadshow 25 - 26 February 2014 Firm B Fi Bids ds Du Due 11.00am Friday 28 February 2014 Alloc Allocation ons and s and Rate Rate Set Set 28 February 2014 Off Offer Opens r Opens 3 March 2014 SDP Har SDP Hard Copie Copies Deliv Delivered Expected to be available from 4 March 2014 Closing Date Closing Date Wednesday, 26 March 2014 Issue Date Issue Date 31 March 2014 Expected NZD Expected NZDX Quotati Quotation Date ate 1 April 2014 | Page 19
SUMMARY Key y featur atures of SKY and this off of SKY and this offer SKY SKY Sky is a leading media company in New Zealand having been operating for 23 years. 49% of NZ homes are currently subscribed to SKY SKY Group had 857,115 subscribers at December 2013 SKY Group had a Net profit of $82.1m for 6 months to 31 December 2013 (unaudited) BON BONDS $100 million of Bonds on offer Issue price of each Bond is $1.00 Coupon rate for this Bond is [6.25 – 6.50%] Maturing on 31 March 2021 | Page 20
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