Investor Presentation May 2019
Disclaimer and Forward-Looking Statements Disclaimer This presenta t ion is no t , a nd under no circumstance s is to be const r ued a s, an adver tise me nt or a public o fferinginCanada of these curitie s re ferredt ointhis pre se nt a tio n, nor doe s this pre se nt a tio n constitute an o ffert osell or a solicita t ion o f an offert o buy any o f t hese curitie s de scr ibed hereinw ithintheUnited St a t es. No securitie s co mmission orsimilar aut horit y inCanada has re vie wed or in anyw ay passed upo nt his present a tion ort he mer its o f t he securities described herein and any representa tiontothe contrary is anoffence. Forward-Looking Statements This presentation may include fo rward-looking statements. All such stateme nts constitute forward loo king information within the meaning of securit ies la w and are made pursuant to the “safe harbour ” provisions of applicable securities laws. Forward-looking statements may include, but are no t limited to, sta tements about anticipated future events or r esults including comments with respect to the Company’s objectives and priorities for 2019 and beyond, and st rategies or further actions with respect to the Company, its business operations, financial performance and conditio n. For ward-lo oking sta tements are sta tements that are predictive in na ture, depend upon o r refer t o future events or co nditions and are identified by words such as “will”, “expects”, “anticipates”, “intends”, “plans”, “believes”, “estimates” or similar expressions concerning ma tters tha t are not historical facts. Such st atements are based on current expectations of the Company’s management and inhe rently invo lve numerous risks and uncer taint ie s, kno wn and unkno wn, including e conomic factors. In part icular, the sta tements se t out in the Outlook sectio n of this press rele ase regarding our expected Adjusted EBITDA forthe year ending December 31, 2019, our expected financial performance fo r the remainder of 2019 and our expect ations regarding the performance of o ur production and distribution segments for the remainder of 2019, constitute for ward- looking state ments. These statements are based on management’s current st rategies, assumptions concerning gro wth and assessment o f the outlook for the business. In particular, such stateme nts assume that: (i) our production co mpanies will co ntinue to develop, produce and deliver successful product ions in a manner co nsistent with past e xperience and on expected delivery schedules as outlined under “Outlo ok” in the pr ess release; (ii) the product mix of the Company’s revenues will continue to be skewe d t ow ards higher margin titles; (iii) we will co ntinue to acquire and distribute content in a manner co nsistent with past e xperience; (iv) our operating and ove rhead costs will be within budget; and (v) tha t the companies we have acquired will meet or excee d our performance expectations. We co nsider the foregoing assumptions to be reaso nable in the circumstances given the time period for such outlook. Ho wever, readers are cautioned tha t K EW ’s actual results may vary from these for ward -looking state ments and that variation co uld be ma terial. The fo rward-looking informa tion contained in this news release is presente d for the purpose o f assisting readers in underst anding the Company’s business and strategic priorities and objectives as at the periods indicate d and may not be appro priate for o ther purposes. A number of risks, uncertainties and o ther factors may cause actual result s to differ materially from the for ward-lo oking sta tements contained in this ne ws release, including, among o ther facto rs, tho se referenced in the section entitled “Risk Factors” in the Company’s annual info rma tion fo r m fo r t he year ended December 31, 2018, a copy of which is available o n the SEDAR website a t www.sedar.com under the Co mpany’s prof ile . In particular, KE W’s results o f operations fluctua te significantly quarter to quarter depending on t he number and timing of co ntent delivered or made available to various media. As in past years, KE W anticipate s that its 2019 financial results will be he avily weighted in the fourth quarter and as a result, KE W may not have visibility on its ability to mee t the 2019 guidance until the end of the fo urth quarter of 2019. Forw ard-looking statements contained in this ne ws release are not guarantee s of future performance and, while for ward-lo oking sta tements are base d on cer tain assumptions that the Co mpany considers reasonable, actual event s and results could differ mate rially from those e xpressed or implied by for ward-lo oking sta tements. Re aders are cautio ned to consider these and o ther factors carefully when making decisions with respect to the Company and not place undue reliance on for ward-looking stateme nts. Circumstances affecting the Company may change rapidly. Except as may be expressly required by applicable la w, KE W does not undertake any obligat ion to update publicly or revise any such for ward-lo oking sta tements, and as a result of ne w information, future events or o ther wise . Non-IFRS Measures This news release contains refe rences to cer tain measures that do no t have a standardized meaning under Interna tional Financial Reporting Standards (“IFRS”) as prescribed by the Interna tional Accounting Standards Board and are t herefore unlikely to be comparable to similar me asures presented by other companies. Ra ther, these measures are provided as additional info rma tion to complement IFRS me asures by providing a fur ther underst anding of operations from management’s perspective . Accordingly, non -IFRS measures should not be considered in isolation nor as a substitute for analysis of financial information repor ted under IFRS. This ne ws relea se makes reference to Gross Profit, Gross Profit Margin, Adjusted Ne t Income, Adjusted EBITDA, Free Cash Flo w, Net deb t, and Adjuste d Net Debt, each of which is a non-IFRS financial measure. The Co mpany believes these no n- IFRS financial measures are frequently used by securities analysts, investors and other interested parties as measures of financial performance and it is therefore helpful to provide supplemental measures of operating performance and thus highlight trends that may no t otherwise be apparent when relying so lely on IFRS financial measures. The Company’s definitions of non -IFRS financial measures are as follo ws: Gross Profit is revenue le ss cost o f sales. • • Gross Profit Margin is gross profit as a percentage of revenue . • Adjust ed Net Income is Income (Loss) before income tax reco ve ry then includes add-back adjustments for items such as transaction costs, reorganiza tion and exce ptio nal co sts, share-based compensa tion, defe rred compensation, o ther intangibles amortization, gain o n change in fair value o f financial liabilities, and (gain) lo ss on sale of subsidiary. Adjust ed EBITDA is also provided to be tte r analyze trends in performance and present a truer eco nomic representatio n on a comparative basis. Adjusted EBITDA is Adjusted Net Income including additional add- • back adjust ments for Interest Expense, ne t of Interest Inco me , Depreciation and any non-cash amor tization (to the extent not added back to Adjusted Net Income). • Free Cash Flow is Adjusted EBITDA adjusted for additions to Proper ty and Equipment, Interest and cash taxes. • Adjust ed Free Cash Flo w is Free Cash Flo w adjusted for additions to film and tele vision rights, net of amortizatio n. Adjust ed Net Income after tax is adjusted ne t income less income tax recovery. • Adjust ed Net Deb t is Net Deb t less intra-group interim production financing and adjusted for the impact of foreign exchange • Adjust ed Earnings Per Share is Adjusted Ne t Income divided by weighted average number of co mmon shares in the capital o f the Company • Please see the Company’s manageme nt’s discussion and analysis for the three months ended March 31, 2019 for a detailed descri ption of these measures and a reconciliation of these measures to the nearest IFRS measure. 2
Company Overview Egypt’s Unexplained Files TCB Media Rights
COMPANY OVERVIEW Introduction to KEW Media Group We are a leading content company that produces and distributes multi-genre content worldwide 13 2,200+ 14,000+ Thirteen Over 2,200 hours of Over 14,000 best-in-class content commercialized totallibrary production companies in 2018 content hours 2 $76.2M 5 1 Two leading distribution $76.2 million 2018 Five primary offices in platforms: Kew Media Gross Profit, or Gross London, Los Angeles, Distribution and TCB Profit Margin of 34.0% New York, Sydney, Media Rights KPI due to diverse and Toronto product range 1) Gross Profit is rev enue less cost of sales. 4
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