Scotland s Digital Media Company Preliminary Results 2009

Transcription

1 Scotland s Digital Media Company Preliminary Results February 2010

2 Richard Findlay Chairman

3 Continued progress through the downturn Three year strategy progressed despite downturn Debt reduction and costs reduced by 23% 18 year arrangement on pension deficit Six new episodes of Taggart at our initiative Ground breaking Memorandum of Understanding with BBC Online activities growing apace from standing start Last months of onerous Pearl & Dean contract Decision on independent production status imminent Union agreement on 2010 pay freeze Successfully building Scotland s digital media company

4 George Watt Chief Financial Officer

5 Financial results Pre exceptionals STV (continuing) Group Turnover 90m 111m -19% 110m 145m EBITDA 12m 15m -20% 12m 17m Operating profit* 9m 13m -30% 9m 14m Pre-tax profit* 6m 13m Pre-tax profit pre IAS19 notional interest* 8m 11m *Pre-exceptionals

6 Financial results 2009 Interest cost - cash 2m 4m - non-cash IAS19 charge/(credit) 2m ( 2m) 4m 2m Tax - effective tax rate 10% 10% - 45m unutilised tax losses - 0% effective rate 2010 to 2012 inclusive - no cash tax until 2012 at the earliest EPS - basic 13.7p 25.7p Exceptional items - net 13m 39m IFRS5 benefit nil 0.5m Net Debt 49m 36m

7 Exceptional items 2009 m m Cash - Onerous property leases Stock writedown Vue onerous contract provision Non Cash - Pension benefit changes credit (4.0) - - Virgin Radio loss on sale Smartycars/Peopleschampion write off (4.0) 18.8m Pre tax total 12.7m 38.9m Tax charge Post tax total 13.8m 38.9m

8 Turnover STV continuing m 2009 TV - Broadcast - National % - Regional % - Self Promo % - Other % % - Content % - Ventures - Solutions % - New Media % %

9 Operating Profit Pre-exceptionals and IFRS5 Operating Profit 2009 m m Operating Margins 2009 TV - Broadcast % 10.0% 11.0% - Content % 12.0% 18.0% - Ventures % 15.9% 9.8% % 10.2% 11.9% Cinema - - n/a % 8.3% 9.9% Radio (sold Jun 08) n/a - 8.8% Total n/a 8.3% 9.8%

10 Broadcasting profit bridge m Profit NPB Cuts STV Programming Strategy Other Revenue Fall 2009 Profit

11 Cash flow m Continuing Discontinued Total EBITDA Movements in working capital Capex (1.0) - (1.0) Free Cash Flow Free Cash Flow Conversion % 101% n/a 123% Exceptional cash costs (4.0) (13.0) (17.0) Interest paid (net) (2.9) Pension deficit payments (gross) (7.9) Net outflow (13.0) Closing net debt (49.4) Bank Facility to 31/12/2012 now 79m following amendment for potential Pearl & Dean disposal.

12 Pensions Actuarial assumptions on mortality unchanged year on year 8m paid into DB Schemes in Q and 3.7m in early 2010 Changed benefits, including pensionable salary cap of 1%, resulted in 4.0m net gain Actuarial valuation finished and 18 year new funding pattern agreed subject to regulator approval m pa m pa m pa m pa m pa Dec 2009 June 2009 Dec Deficit - gross 36m 44m 38m - net 26m 32m 27m

13 Rob Woodward Chief Executive Officer

14 Building Scotland s media brand of choice across all platforms Unprecedented economic times 7 out of 12 KPI targets achieved or exceeded Forging partnerships - First ever series commission for BBC - Ground breaking Taggart deal with ITV and UKTV Building our digital presence - Strong growth in digital traffic and revenue on stv.tv platform - Launch of STV Player - Launch of STV Local, over 250 hyper-local community sites - Two year deal agreed with NetPlay Scotland s digital media company

15 Delivering on our promises. In 15 months Feb Mar STV Jobs launched New programme strategy announced May The Hour launched Jun Strategic partnership with BBC announced STV wins first ever series commission for BBC Feb Feb Two-year deal agreed with NetPlay Consultation to grant STV Productions Independent Producer rights concluded Mar IFNC bid announcement January 2009 Mar Jackpotjoy partnership announced May stv.tv achieved 100,000 registered users Nov Unique users to stv.tv reaches 1.5m April 2010 Apr Michael Jackson appointed to Board Jul STV Player launched Feb Taggart cocommission agreed with ITV and UKTV Apr Launch of STV Local

16 Taking control of our schedule and costs An entertaining schedule catering for a range of audiences, with a mix of: Network material Acquired programmes Home-grown series X Factor Proof Football Years Over 90% of schedule comprises network content If they re spending their pennies on decent drama like this, then we re not complaining. If you watched The Football Years and you re an idiot if you didn t you ll remember. Daily Record, 13 June 2009 Scotland on Sunday, 14 Feb 2010 Achieved 6m cost savings whilst delivering peak share in line with network

17 Broadcasting Scotland s multi platform brand of choice

18 Broadcasting highlights Scotland s most popular peak-time TV station reaching 4.2m people every month Grown our market share in tough environment Delivering a distinct and relevant schedule with the best of network content, original home-grown productions and acquired material Increased alignment of digital and broadcast channels to leverage investment in content across all platforms Attracted 169 new advertisers to STV in 2009 Creative, innovative and integrated solutions for advertisers Strengthening the relationship with our audience and advertisers

19 Broadcasting KPIs 1. Increase regional advertising market share 2. Grow regional sponsorship revenues 23% 23% 1.5x 1.4x 1.4x 22% Achieved 1.0x Achieved 20% 2009 actual 3. Increase broadcasting margins 12.5% 9.4% 11.0% Not Achieved 2009 actual 10% 2009 actual

20 Content Opportunity to become one of the UK s Top 10 production companies

21 Content highlights A transitional year New commissions secured - Antiques Road Trip - Osbourne Adrenaline Junkie - Tobin Portrait of a Serial Killer - Take A Seat Increasing focus on co-productions - History - Sky Real Lives - Bio New commercial partnership with People s Postcode Lottery Taggart co-commission agreed with ITV and UKTV Consultation concluded regarding the granting of STV Productions with the same rights as independent producer US market opportunity Content at the heart of our business

22 Content KPIs 4. Grow produced hours Achieved 6. Grow rights exploitation business 5. Exploit library content 1.4x 1.5x 1.0x 2009 actual 2009 actual x 1.1x 1.0x 7. Maintain 10% margin 17.1% 18.0% 12.0% Exceeded 2009 actual Not Achieved 1.0x 1.6x 10.0% Exceeded 2009 actual

23 Ventures Leverage our broadcast window to generate new revenue streams

24 Ventures highlights stv.tv amongst most popular commercial media sites in Scotland 417% increase in unique users to stv.tv since Monthly unique user numbers to stv.tv peak at 1.5m for Q STV Player launched and delivering 700,000 video streams per month STV Local to be launched, offering over 250 hyper-local sites Partnership with NetPlay to provide late night gaming programmes Building traffic and identifying new revenue streams

25 Ventures KPIs 8. Grow online visitors to stv.tv 9. Increase online advertising revenues 90k 93k 0.9m Exceeded 0.5m 2009 actual 2009 actual 8k 30k 2009 actual 0.1m 0.2m 10. Focus on regional transaction based revenues 4.5m Not Achieved 2.6m 3.0m 2.2m Not Achieved

26 2009 actual target 11. Target Scottish classified market 12. Increase Ventures margin 2009 actual Ventures KPIs 1.0% Not Achieved 0.1% 0.1% 0.3% 15.0% 15.9% -13.8% 10.0% Exceeded

27 2010 Priorities Pearl & Dean Completion of disposal Content Securing commissions and co-productions US expansion Digital Growth of revenue and traffic Regulatory PSB Funding News Pilot Independent Status Cost efficiency Embedded culture of cost control and efficiency savings ITV Protect STV s interests New C3 blueprint Strong position to benefit from upturn

28 KPIs

29 Measuring the delivery of our strategy To provide operational focus and clarity and consistency in communicating our objectives and targets Ambitious and challenging targets to deliver shareholder value Culture of accountability and transparency New KPIs for relevant and appropriate for our ambitions

30 New KPIs for to measure growth priorities Broadcasting 1. Regional advertising market share 2. Peak time audience v ITV Network 25% 26% 27% In line To be in line with the Network 23% New target to assess success of programming strategy Increase broadcasting margins 14.0% 12.5% 10.0% 10.0% KPI retained 2010 KPI retained

31 New KPIs for to measure growth priorities Content 4. Production hours 5. Value of external commissions m m m target actual 2012 KPI retained 6. Maintain 10% margin 12.0% 2009 actual % KPI retained 10.0% 10.0% 5.6m New target to drive increased number of commissions

32 New KPIs for to measure growth priorities Ventures 7.Unique users per month 8. Page impressions per month 1.7m 1.9m 2.1m 6.7m 8.0m 8.8m 1.3m 4.8m New target aligned with digital sector reporting norm Performance will be measured over Q Digital revenue value 9.1m New target aligned with digital sector reporting norm Performance will be measured over Q4 7.3m 5.2m 2.7m Combines previous revenue KPIs in Ventures

33 New KPIs for to measure growth priorities Ventures 10. Video streams per month 11. Ventures margin 0.7m 1.0m 1.2m 1.4m 16% 25% 30% 35% KPI retained New target aligned with digital sector reporting norm Performance will be measured over Q4 2009

34 STV legal proceedings with ITV Confident of strength of claims on basis of legal advice Essential to protect the interests of shareholders, audience and advertisers and realise future growth plans STV claims 1 Potential prejudicial behaviour claim - seeking assurance over conflicts of interest at ITV Network - seeking damages and behavioural remedy 2 New Media Rights claim - will injunct new ITV services 3 Robust defence of claim to a net 3m - 20m owed by STV to ITV Additional counterclaim against ITV plc under Advertising Sales Agreement - estimated value up to 16m Opportunity to engage with new ITV plc management

35 2010 Outlook Jan Feb Mar Q1 National Market -STV +15% +8% +15% +13% -TV Market -1% +4% +13% +5% Scottish Market -STV +1% +15% +1% +4%

36 Summary Delivered a strong performance given market conditions STV is a transformed business and strategically well placed New KPIs targets demonstrate our ambition and focus Strong trading start to 2010 Performance driven organisation with ability to innovate and respond to commercial opportunities Scotland s digital media company