FINANCIAL RESULTS 3Q 2018 11 July 2018 Singapore Press Holdings Limited
Disclaimer This presentation is for information only and does not constitute an invitation or offer to acquire, purchase or subscribe for shares in SPH (“ Shares”). The value of shares and the income derived from them may fall as well as rise. Shares are not obligations of, deposits in, or guaranteed by, SPH or any of its affiliates. An investment in Shares is subject to investment risks, including the possible loss of the principal amount invested. The past performance of SPH is not necessarily indicative of its future performance. This presentation may also contain forward-looking statements that involve risks and uncertainties. Actual future performance, outcomes and results may differ materially from those expressed in forward-looking statements as a result of a number of risks, uncertainties and assumptions. Representative examples of these factors include (without limitation) general industry and economic conditions, interest rate trends, cost of capital and capital availability, competition from similar developments, shifts in expected levels of property rental income, changes in operating expenses, including employee wages, benefits and training, property expenses and governmental and public policy changes and the continued availability of financing in the amounts and the terms necessary to support future business. You are cautioned not to place undue reliance on these forward-looking statements, which are based on current view of management on future events. This presentation shall be read in conjunction with SPH’s financial results for the third quarter and nine months ended 31 May 2018 in the SGXNET announcement. 2
3Q 2018 Financial Highlights Rebound in 3Q Performance Media: Improving digital revenue, with decline of print revenue slowing down 3Q 2018 3Q 2017 Change • Digital subscriptions gaining traction S$’000 S$’000 % • E-paper well-read with improving reception • Tapering trend of print advertisement revenue Operating revenue 250,074 259,963 (3.8) decline Management bench strengthened for Digital Operating profit # 44,410 34,265 29.6 Transformation • Chief Marketing Officer, Chief Product Officer, Investment income 21,895 11,682 87.4 Chief Technology Officer, Chief of Digital Business Profit after taxation 56,634 36,776 54.0 Real estate asset management progressing • Established Straits Capitol in the UK, reviewing strong pipeline of deals Net profit attributable 47,443 28,872 64.3 to shareholders More wins from Digital portfolio • Exit of Qoo10’s Japanese subsidiary # This represents the recurring earnings of the media, property and other businesses. 3
Digital Circulation: Showing good traction Daily Average Digital Circulation Copies ('000)* 500 Increase of 121,000 copies (43.5%) Y-on-Y 399 382 400 338 296 278 300 200 100 0 3Q 2017 4Q 2017 1Q 2018 2Q 2018 3Q 2018 All-digital subscription launched in Q3 2018, building momentum • Successful Promotion of digital subscription E-paper showing healthy readership • > 37,000 readers or >15% of The Straits Times’ print circulation • Valuable data analytics, to understand readership of print paper • More promotions and profiling going ahead 4
Digital Ad: Good growth and momentum ahead 9M2018 Total Digital Ad revenue grew 10% YOY • Growth drivers from Mobile Web and Programmatic Ads • Strong performance from Straits Times, Zaobao, and BT Launch of Singapore Media Exchange (SMX) • Data-driven programmatic ads • Gaining momentum in reaching Singapore’s digital population $’m Total Digital Ad Rev * 60 CAGR 10% 13.2 40 44.1 41.8 40.3 38 Photo: (L-R) SMX CEO Hari Shankar, Julian Tan, 20 SPH chief of digital business and SMX director FY 2015 FY 2016 FY 2017 9M 2018 & Roger Moy, Mediacorp head of consumer Full Year 9M 4Q insights and analytics at Mediacorp and Chair *Total revenue from web, app, online classifieds, magazines, Shareinvestors and other digital portals of SMX 5
Total digital revenue: growing significance $’m Digital Revenue * 120 Digital revenue increased to 14% of media revenue** • 100 CAGR 18% Faster digital-driven growth ahead, with sharper • 24.9 80 focus on digital capabilities and data analytics 60 New CMO, CPO, CTO and Chief of Digital Business • 81.9 40 74.5 71.6 Invested into digital capabilities with >70 digital geeks (data 66.2 • 59.0 46.8 scientist, videographers, UX designers etc) 20 Hackathon events, drive ideas, identify talents • 0 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 9M 2018 Full Year 9M 4Q *Total revenue from circulation, ads, online classifieds, magazines, Shareinvestors and other digital portals **Includes revenue from media and online classifieds Ignatius Low Glen Gary Francis Gaurav Sachdeva Julian Tan Chief Technology Officer Chief Marketing Officer Chief Product Officer Chief of Digital Business 21 May: Joined as CTO, initially 11 April: Appointed CMO, in charge 14 May: Joined as Chief Product Re-designated as Chief of Digital of advertisement solutions across overseeing digital tech Officer. Works with Media Group Business to focus on growing SPH’s team responsible for SPH’s suite of print, digital, radio and outdoor division on vision, design, portfolio of investments in digital platforms; content marketing digital media products, takes over development; monetisation of its businesses. Formerly Head of the IT Division on 1 Aug digital media content and products Digital Division 6
Circulation copies Print ad revenue Decline in print circulation, offset by Decline in Print ad revenue slowing • • growth in digital copies down 5.0% 1,000 % YoY Change in Print Ad Revenue Daily Average Newspaper Circulation ‘000 900 0.0% 800 700 Display -5.0% 600 Classified* 500 Newspaper Ad 400 -10.0% -9.5% -9.9% 300 -10.6% -11.1% -11.8% 200 -12.5% -15.0% 100 -14.7% -16.3% 0 The Straits The Lianhe Lianhe Shin Min Berita Tamil Total -17.9% -18.0% Times/ The Business Zaobao Wanbao Daily News Harian/ Murasu/ -18.7% -20.0% Sunday Times Berita Tamil -20.2% Times Minggu Murasu Sunday 9M 9M -25.0% 9M 9M 4Q 2017 1Q 2018 2Q 2018 3Q 2018 *Classified includes Recruitment and Notices 7
Integrated marketing strategy – CMO offers compelling value, more than just print IKEA’s 40 years Integrated marketing – Steady Results in Singapore • CMO secures campaigns, allocates across platform, bundle negotiation, and provides compelling value • Steady performance in campaigns delivered # Integrated campaigns rose 16% YoY Samsung Asia # Advertisers (>2 platforms) rose 9% YoY S9 & S9+ Ministry of Communication and Information Workplace Integration Campaign 8
Digital Portfolio under one roof Portfolio Management Marketplaces AI/Analytics SPH Ventures Ads/ Marketing Portfolio Management • Identify and drive growth in new digital businesses • Manage performance of portfolio for consistent SGCarMart Handshakes MoneySmart Singapore Media contribution to SPH’s results Exchange (SMX) • Drive synergies, leverage advertising competitive edge to establish digital presence FastJobs Chope clickTRUE Outcomes Steady growth for SPH • SRX Snapcart Potential upside performance • ZomWork 9
– delivering the wins … Divestment win Divestment win Sale of 702 online classifieds Sale of Qoo10’s Japanese subsidiary in Thailand … and making the progress Premium advertising exchange Joint Expand footprint in Target Media Culcreative venture between SPH and MediaCorp e-ecommerce 21 % stake in joint venture end-mile delivery between SPH and Focus Media Parcel Santa partnership May 21, 2018 SPH’s network More than 3,000 vendors and delivery crew and SPH Buzz Convenience Stores (59 stores used as drop-off/collection point for e-commerce delivery) 10
Property: Sustained property performance … SPH REIT SPH REIT SPH REIT and The Seletar Mall continue to provide earning stability • Property is the biggest profit driver • Acquired The Rail Mall • Accretive acquisition Paragon Clementi Mall The Rail Mall • Plan for more acquisitions, using debt S$583m S$62.9m S$2.85b headroom • Exploring overseas opportunities to build capability and asset base The Seletar Mall The Woodleigh S$488m Mall 11 11
Real estate asset management: shifting gear Global asset classes • Cognisant of advanced stage of global asset cycle • Seeking cash-yielding real estate assets Reviewing defensive sectors • Studying recession-proof defensive sectors • UK market a possibility – Brexit has created opportunities, e.g. favourable exchange rate, demand in certain areas Building on-the-ground capabilities: • Incorporated Straits Capitol Ltd • Developing acquisition and transaction capabilities • Actively reviewing pipeline of deals 12
Aged care: Building on Orange Valley brand for growth • Largest private sector player in Singapore • Focus on developing efficient capabilities • Ready for growth • Seeking overseas opportunities where the silver market is expanding rapidly • Leveraging Singapore’s brand in healthcare 13
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