TISO BLACKSTAR GROUP SE 30 JUNE 2016 RESULTS INVESTOR PRESENTATION OCTOBER 2016

Transcription

1 TISO BLACKSTAR GROUP SE 30 JUNE 2016 RESULTS INVESTOR PRESENTATION OCTOBER 2016

2 CONTENTS 1. Group summary 2. B-BBEE and Transformation 3. Core Investments review 4. Non - Core Investments review 5. Other matters 6. Annexure: TMG Business summary

3 GROUP SUMMARY 2

4 HIGHLIGHTS Group EBITDA over R522m (+22%), Core EBITDA for TMG of R357m (+15%) Core and non-core EBITDA showed good growth in difficult markets Acquisition debt reduced: At centre from R500m to R413m; At TMG from R800m to R730m Non-core assets of R1,987 million ear marked for disposal Change in accounting status to consolidate earnings for 2017 Final dividend of 4.47 cents per share (interim of 3.74 cents per share) 3

5 INTRODUCTION Tiso Blackstar is an investment holding company focused on media and related businesses. It has a decade long history of owning and developing market leading SA businesses. Core businesses represent established and diversified media footprint in SA and the rest of Africa including: Times Media Newspapers, print and digital publishing (including market leading brands Sunday Time, Business Day, Sowetan, The Times). Times Media retail solutions which helps retail and FMCG customers sell their products (H&C and Uniprint), and Times Media Broadcasting and content which includes leading TV channels and production, film distribution, music and radio. Radio investments include market leading positions in Ghana and Kenya, two of the most exciting growth markets north of SA. Non-core businesses are market leaders in their respective industries. Robor is the number one steel tube and pipe manufacturing and engineering solutions business in SA and exports to countries all over the world. Consolidated Steel Industries is a market leader in manufacturing of steel roofing, cladding as well as stainless steel and aluminum distribution in SA through its two divisions GRS and Stalcor. It has established a manufacturing branch network across Africa including branches in Namibia, Botswana, Zambia, Zimbabwe, Lesotho and Mozambique. 4

6 GROUP AT A GLANCE MEDIA 100% INDUSTRIAL % 22.9% 49% 32% Media (Newspaper & digital) Broadcasting & Content (TV, radio, music & film) Retail Solutions (Hirt & Carter & Uniprint) NON CORE Non-core assets of R1,987 million ear marked for disposal 5

7 NEWSPAPERS MAGAZINES Style and substance SA NG READ WHAT REALLY GOES DOWN IN SADC DIGITAL BRANDS TV RADIO CONTENT Film Distribution 6

8 FINANCIAL SUMMARY TISO BLACKSTAR GROUP REVENUE Actual (Rm) Actual (Rm) Revenue % change Core - TMG % Non-core % CSI % Robor % TOTAL % Group revenue growth 4% yoy TMG revenue stabilised in 2016 Non-core assets showed solid revenue growth TISO BLACKSTAR GROUP EBITDA (before exceptional items) Actual (Rm) Actual (Rm) EBITDA % change Core - TMG % Core - Associates % Core - TBG HO % TOTAL CORE % Non-core % CSI % Robor % KTH {dividend} 30-0% TOTAL % Core EBITDA grew 3% yoy, with a robust performance from TMG given the current challenging market conditions EBITDA including non-core assets grew 22% largely due to a significant turnaround in Robor 7

9 DEBT CORE DEBT, INTEREST COST Tiso Blackstar HO TMG Actual (Rm) Actual (Rm) % change Acq finance % Cash/(OD) % TOTAL % INTEREST COST % CAPITAL REPAID 121 Acq finance % Asset finance % Cash/(OD) % TOTAL % INTEREST COST % CAPITAL REPAID 70 Tiso Blackstar HO debt repayable June 2018 Capital repayments ahead of bank expectations (more expensive debt) TMG TMG debt is high but manageable in the current environment Current cash conversion supports existing debt Capital repayments ahead of bank commitments (less expensive debt) 8

10 B-BBEE AND TRANSFORMATION 9

11 B-BBEE AND TRANSFORMATION Tiso Blackstar is committed to transformation and the revised Broad-Based Black Economic Empowerment Codes of Good Practice which came into effect on 1 May 2015 ( B-BBEE ). A summary of its key empowerment credentials include: Tiso Blackstar has a B-BBEE ownership status of 45.47%; TMG achieved a level 3 contributor status on the revised B-BBEE codes; TMG has a B-BBEE ownership status of 58.47%; and TMG is considered an empowering supplier with a 110% procurement recognition level Specifically its Media (newspaper and digital) business has achieved the following demographics: Core media executive management team 66.6% BEE Editors and Deputy Editors 72% BEE Media Management including editorial and key departmental heads 62% BEE Total staff 67% BEE Active development of BEE and female talent to improve senior departmental level representation 10

12 CORE INVESTMENTS REVIEW 11

13 TIMES MEDIA REVIEW TMG Group Highlights Actual (Rm) Actual (Rm) REVENUE % change TMG % Media % Broadcasting & Content % Retail Solutions % Media Revenue declined by 7% largely due to government cost cutting, poor economic growth and competitive media pricing Initiatives around government advertising, eventing and native to bolster revenue Broadcasting & Content Films business model under pressure from content suppliers and major customer Multichoice TV channels and production performed solidly Radio investment continues, revenue growth expected in 2017 Retail Solutions Both H&C and Uniprint showed revenue growth and won new clients for 2017 growth Tactically we slowed revenue growth in order to increase margin New businesses (Software and SILO) showed good growth Media Broadcast & Media Retail Solutions 12

14 TIMES MEDIA REVIEW TMG Group Highlights Actual (Rm) Actual (Rm) EBITDA % change TMG % Media % Broadcasting & Content % Retail Solutions % HO & consol % Media Despite substantial cost cuts, revenue decline outpaced them to reduce profits by 30% Project 200 implementation will maintain profitability Broadcasting & Content Film business to be reviewed TV channels and production continue to show steady growth Radio investment of R20.7m (R25m in 2015) should continue to improve in 2017 Retail Solutions Margins grew this year and should be held in 2017 Two new large customer should contribute to margin Acquisition of Triumph will contribute to growth beyond the budget HO & Consol Includes PRMA of R10m 2015 includes consol adj of R7m and discontinued ops items Media Broadcast & Media Retail Solutions 13

15 KENYA 14

16 RADIO JAMBO CLASSIC FM KISS FM EAST FM XFM FM GUKENYA FM 7.6m 5.4m 4.2m 25OK 120K NEW NO 1 NO 1 NO 1 NO 1 NO 1 NATIONAL DRIVE SHOW ENGLISH STATION YOUTH STATION INDIAN STATION ROCK STATION A FIELD GUIDE TO KENYAN FM STATION 15

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18 Consistent Topline Growth

19 MEDIA REACH ACROSS KENYA 5 20m+ 75% COUNTRIES Consumers Media Experts Digital Connections Our combined national radio& tv stations, newspapers and digital outlets reach a massive audience With over 600 media professional working in the group, we cover all aspects from media planning to production to placements. The groups' websites reach a combined over 20 million unique viewer and our personalities have millions of followers The group has affiliated media companies in Uganda, Ghana, Tanzania, South Africa and Zimbabwe 18

20 GHANA 19

21 MULTIMEDIA GHANA JOY FM LEADING ENGLISH LANGUAGE STATION IN GHANA, ADOM LOCAL LANGUAGE LEADER ADOM NOW THE THIRD LARGEST TV CHANNEL IN GHANA AND MULTI S JOY PRIME IS 4TH. MULTI TV LARGEST COMBINED AUDIENCE REACH OVER 2M DTH BOXES IN MARKET 20

22 NON - CORE INVESTMENTS REVIEW 21

23 NON - CORE REVIEW Non-core Highlights CSI Replaced working capital finance from Sasfin with ABSA on better terms Trading in new premises in Gauteng has settled Sold non-core compacting equipment manufacturing business African businesses are trading well but weakening currencies have effected profits, business is well provided Order book is healthy Robor Robor had a good 9 month financial year to 30 June 2016 and is trading well in a very difficult environment It has chosen to pursue margin preservation over volume in the year ahead, focusing on value added products It remains well positioned in the renewable energy, water, transmission and cellular tower markets Robor is in the process of securing larger working capital facilities to ensure that it has enough head room when the larger projects start coming through Project pipeline is healthy KTH Overall NAV stable, valuation at expected offer price NAV increased in unlisted investments and decreased in listed investments Major cash generator, Kagiso Media, is feeling market related advertising pressures CSI Order Book (Rm) ( 000 m 2 ) Duration On site months Out to tender months Planning months Robor Projects/Orders awarded Projects/Orders in negotiation (Tons) months months Tenders/RFQ s submitted months 22

24 NON - CORE ASSETS CONSOLIDATED STEEL INDUSTRIES (CSI) Tiso Blackstar owns 100% of Consolidated Steel Industries (CSI). CSI is the holding company of two leading steel and related manufacturing and distribution businesses. Stalcor was established in 1973 is a dynamic, world class stockist, distributor of Stainless steel and Aluminium across SA. Global Roofing Solutions is one of the largest metal roofing manufacturers in SA comprising two leading roofing brands GRS Brownbuilt (established in 1964) and GRS HH Robertson (established in 1958). GRS Brownbuilt pioneered and is the leading manufacturer of concealed fix roof profiles, along with pierced fix roofing profiles, wall-cladding profiles (Concealed fix and Pierced fix), composite steel floor decking profiles and lightweight coated metal roof tiles. GRS exports to over 20 countries worldwide establishing itself as the global supplier for roofing products. CSI has expanded into the rest of Africa by opening branches in Namibia, Botswana, Zambia, Zimbabwe, Mozambique, Lesotho and Swaziland. GRS also boasts a mobile roof rolling mill that operates north of SA. 23

25 NON - CORE ASSETS ROBOR Tiso Blackstar owns 51% of Robor with management holding the balance. Established in 1922, Robor (a private SA company), manufactures and supplies welded steel tube and pipe, cold formed steel profiles and associated value added products. Supplies, distributes and adds value to carbon steel coil, plate, sheet and structural profiles. Largest tube and pipe solution company in Southern Africa and is active in most industries including, mining transport rail and road, construction, engineering, manufacturing, agriculture, energy, water and automotive. Robor s mission is to be an engineering steel, tube and pipe company with an African focus. Recently completed a strategic acquisition of Tricom Structures who design, develop and manufacture steel structures for telecom tower companies, cell phone operators and power sectors. The demand for Tricom products/solutions is growing in Africa and will add value to Robor s capabilities in terms of providing solutions across various market segments. 24

26 OTHER MATTERS 25

27 OTHER MATTERS UPDATE ON SALE OF NON-CORE ASSETS Property Redefine have agreed to acquire Litha property for R85m before Implementation before December 2016 Proceeds to be used to settle interest and capital on HO debt CSI & Robor Sector valuations are currently very unattractive Businesses are well positioned for growth in market share and margin Likely that returns will be maximised by holding for a year or longer Patience required to maximise returns ADMINISTRATIVE UPDATE Financial reporting change No longer reporting as an investment entity under IFRS10 Start consolidating results of all controlled operating entities December 2016 Interim results will be first set of consolidated results Consolidated earnings should give better value driver visibility to investors Migration On track for completion 2H

28 THANK YOU. 27

29 ANNEXURE: TIMES MEDIA GROUP BUSINESS SUMMARY 28

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34 OMNICHANNEL RETAIL 33

35 Market potential The only industry segments that are not negatively impacted by the Internet and WWW, but have grown in spite the growth of online marketing, are those related to packaging, and specifically: Label Printing, Folding Carton Printing, Flexible Package Printing, and Corrugated Box Printing. Harvey R. Levenson, Professor Emeritus, Cal Poly State University, California 34