3rd quarter fy19 results - astro · 2018-12-05 · share of tv adex is based on astro and group...

3rd Quarter FY19 Results

5th December 2018

This document contains certain forward-looking statements with respect to Astro Malaysia Holdings Berhad’s (“Astro”) financial condition,

results of operations and business, and management’s strategy, plans and objectives for Astro. These statements include, without

limitation, those that express forecasts, expectations and projections such as forecasts, expectations and projections in relation to new

products and services, revenue, profit, cash flow, operational metrics etc.

These statements (and all other forward-looking statements contained in this document) are not guarantees of future performance and are

subject to risks, uncertainties and other factors, some of which are beyond Astro’s control, are difficult to predict and could cause actual

results to differ materially from those expressed or implied or forecast in the forward-looking statements. These factors include, but are

not limited to, the fact that Astro operates in a competitive environment that is subject to rapid change, the effects of laws and

government regulation upon Astro’s activities, its reliance on technology which is subject to risk of failure, change and development, the

fact that Astro is reliant on encryption and other technologies to restrict unauthorised access to its services, failure of key suppliers, risks

inherent in the implementation of large-scale capital expenditure projects, and the fact that Astro relies on intellectual property and

proprietary rights which may not be adequately protected under current laws or which may be subject to unauthorised use.

All forward-looking statements in this presentation are based on information known to Astro on the date hereof. Astro undertakes no

obligation publicly to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

This presentation has been prepared by Astro. The information in this presentation, including forward-looking statements, has not been

independently verified. Without limiting any of the foregoing in this disclaimer, no representation or warranty, express or implied, is made

as to, and no reliance should be placed on, the fairness, accuracy or completeness of such information. Astro and its subsidiaries,

affiliates, representatives and advisers shall have no liability whatsoever (whether in negligence or otherwise) for any loss, damage, costs

or expenses howsoever arising out of or in connection with this presentation.

Disclaimer

1 | 3QFY19 results

REACH

ENGAGE

GROW

3Q FY19 key performance highlights

Revenue -0.9%RM1.40bn→ RM1.38bn

FCF of RM422mn -4% from RM438mn

275% of PATAMI

Adex +2%RM175mn→ RM179mn

Norm. PATAMI +31%RM135mn→ RM177mn

EBITDA +13%RM418mn→ RM473mn

2 | 3QFY19 results

(1)

3Q FY18 vs 3Q FY19

• Adex recovery leading to growing adex share of 43%, 74%

and 4% for TV, Radio and Digital

• Sterling eCommerce performance – highest ever

quarterly revenue

• Movie releases sets new benchmark in local box office -

rivalling Hollywood blockbusters

Note:

(1) Normalised PATAMI excludes post-tax impact of unrealised forex gain/(loss) 3Q FY19: (RM 24m),

3Q FY18: RM 11m due to mark-to-market revaluation of M3B transponder lease liabilities

• # 1 Premium local content creator with 12k hours of

content created yearly

• Vernacular content underpinning 75% TV viewership share

• 963k connected STBs driving content consumption

• Hosted biggest eSports event - Kuala Lumpur Major

• 73% to 76% household penetration

• 1.5mn to 2.1mn Astro GO registered users

• 1.2mn to 1.6mn Go Shop registered customers

• 16.2mn weekly radio audience

• 7.3mn avg monthly unique visitors to digital assets

NB

(1) TV household data sourced from the

Department of Statistics Malaysia and Media

Partners Asia

(2) Household penetration comprises residential

Pay-TV customers and NJOI customers

(3) Viewership share is based on DTAM deployed

by Kantar Media

(4) Audience measurement is provided by GfK.

Share of radex is based on internal estimates

(5) Average monthly unique visitors to Astro’s

digital assets in the last 12 months as sourced

from comScore, comparative restated

accordingly

(6) Connected set-top boxes (STBs) are

connected to the internet and have access to

Astro’s On Demand library of content

(7) Normalised PATAMI excludes post-tax impact

of unrealised forex gain/(loss) YTD FY19: (RM

59m), YTD FY18: RM 23m due to mark-to-

market revaluation of M3B transponder lease

liabilities

(8) Data presented are for 9 months ended 31

October.

(9) Numbers may not add up due to rounding

differences

3Q FY19 year to date overview

Highlights YTDFY18 YTDFY19 Growth

TV households (000s)(1) 7,288 7,405 1.6%

TV household penetration(2) 73% 76% 4 pp

TV customer base (000s) 5,334 5,662 6%

Pay TV ARPU (RM) 100.7 99.9 -0.8%

Astro TV viewership share(3) 77% 75% -2 pp

Radio listenership (mn) (4) 16.5 16.2 -2%

Average monthly unique visitors (mn)(5) 6.9 7.3 6%

Connected STBs (000s) (6) 702 963 36%

Revenue (RM mn) 4,143 4,111 -0.8%

Adex (RM mn) 526 491 -7%

EBITDA (RM mn) 1,429 1,223 -14%

EBITDA margin 34% 30% -4 pp

Normalised PATAMI (RM mn) (7) 566 404 -29%

FCF (RM mn) 1,160 1,113 -4%

EPS (RM sen) 11.3 6.6 -42%

3 | 3QFY19 results

Digital Assets

192 channels

• Largest Pay-TVoperator in SEA

• Serving 5.7mn households

• 77% household penetration

• 43% TV adex share• 963K connected STBs

• 7.3mn avg monthly unique viewers across over 25 digital assets

• Gempak is the No. 1 digital entertainment portal in Malaysia

• 24/7 multilanguage

shopping

experience

• 1.6mn registered

customers

• 11 radio brands

• 16.2mn weekly

audience

• #1 highest rated

stations across 4

key languages

• 75% radex share

ASEAN content & consumer company

11 radio brandsOTT (Over-The-Top) Service

TV DIGITAL RADIO COMMERCE CONTENT

• #1 premium

content creator &

aggregator

• Investing in content

verticals with

regional reach

• Produced 12K hours

of content in FY18

4 | 3QFY19 results NB:

(1) Cumulative count since inception

(2) Connected boxes are set-top box connected to the internet and have access to On Demand library of content

25%

75%-2pp

TV Viewership Share

03:49 03:3602:06 02:06

YTD FY18 YTD FY19

Avg. Time Spent/Day (hrs)

13.4 12.87.4 7.1

YTD FY18 YTD FY19

Avg. Daily Viewers (mn)

Astro FTA

1.52.1

3Q FY18 3Q FY19

4.25.4

3Q FY18 3Q FY19

197 159

3Q FY18 3Q FY19

Avg. Weekly Viewing (mins)App Downloads (1) (mn) Registered Users (1) (mn)

+38%

+30%

-19%

NB:

(1) Cumulative count since inception

(2) Connected boxes are set-top box connected to the internet and have access to On Demand library of content

(3) Target Audience: Kantar Media, Dynamic TV Audience Measurement (DTAM). All Astro Pay-TV viewers

702963

3Q FY18 3Q FY19

Total Connected STBs (1)(2)

(000s)

+37%

13

38

3Q FY18 3Q FY19

Total Video Downloads (mn)

+185%

381457

3Q FY18 3Q FY19

Avg. Weekly Viewing (mins)

+20%

Strong growth and engagement across all platforms

5 | 3QFY19 results

TV

On Demand

OTT

-4%

-4%

-6%

1,121 1,140 1,149 1,107 1,076 1,162

1,107

143 208 175

196 151

161179

62

70 73 85

84

9498

1Q FY18 2Q FY18 3Q FY18 4Q FY18 1Q FY19 2Q FY19 3Q FY19

Go Shop

Adex

Subscription/Others

Revenue resilient underpinned by growth drivers

34%

(7%)

(2%)

(RM mn)Total revenue YTD growth(2)

NB

(1) Disclosed as Subscription revenue and Other revenue in our financial statements, includes revenue streams such as TV

subscription, licensing income, programme sales, NJOI revenue and theatrical revenue

(2) YTD refers to 9 months ended 31 October

(3) Numbers may not add up due to rounding differences

(0.8%)

(1)

1,420 1,397 1,388

1,311

1,4171,384

6 | 3QFY19 results

1,326

70

117

92 109

80 80100

67

83

73

76

63 69

646

10

11

8 12

14


TV Radio Digital

YTD FY18 YTD FY19

Adex bounces back this quarterAdvertising income (RM mn) YTD growth

(3)

-12%

-7%

(2)

Total Malaysia

gross ADEX YTD

growth

OVERALL ADEX

-3%

DIGITAL

18%

RADIO

-14%

TV

-6%

(3)(6)

73% 74%

YTD FY18 YTD FY19

Share of Radex

Share of TV adex

Radio listeners (mn) (4)

77% 75%

YTD FY18 YTD FY19

TV viewership share (5)

NB

(1) Starting Q3FY19, digital adex is disclosed as a standalone component, hence all TV and Radio adex and comparatives have been restated accordingly.

(2) Advertising income is net of commissions and discounts.

(3) YTD refers to 9 months ended 31 October

(4) Audience measurement is provided by GfK. Share of radex is based on internal estimates

(5) Viewership share is based on DTAM deployed by Kantar Media. Share of TV adex is based on Astro and Group M’s estimates

(6) Malaysia gross adex figures (covering TV, print, radio, cinema, in store media, outdoor and digital) are based on Nielsen and Group M’s data


.

16.5

-7%

16.2

179

43% 43%

YTD FY18 YTD FY19

208

175

196

151

161

7 | 3QFY19 results

143

42%

8

YTD FY18 YTD FY19

Share of digital adex

3%4%

YTD FY18 YTD FY19

Avg monthly unique

visitors (mn)

7.36.9

Available

across all

platforms

App and

website

205 275

YTD FY18 YTD FY19

Revenue(1)(RM mn)

34%

1,209 1,633

YTD FY18 YTD FY19

35%

Registered Customers(2) (k) • Customised content across multiple platforms to

cater to our different dialect speaking customer

base featuring Mandarin, Cantonese and Hokkien

speaking hosts

• Teaming up with our GEGAR radio station to offer

GEGARMall, the first Radio Shopping experience

featuring exclusive deals and curated products for

GEGAR’s fansNB

(1) Data presented for 9 months ended 31 October

(2) Cumulative as of 31 October

8 | 3QFY19 results

eCommerce delivers record performance

405 353 447 408 352

602

418

624 690

706 778

665

693

663


Content costs Other expenses

1,017

1,295

1,0811,029

Cost optimisation remains a key focus

(RM mn)Total operating expenditure

NB

(1) Content costs are disclosed as part of cost of sales in our financial statements

(2) Other expenses include marketing and distribution costs, administrative expenses, STB installation and smartcard costs, depreciation and

amortisation, as well as maintenance costs


Content cost as % of TV

revenues

1,043

28%

1,153

36%

1,186

33% 30% 48%

9 | 3QFY19 results

34%34%

NB

(1) Data presented are for 9 months ended 31 October


Applying ROI discipline in capex spend

3% 2%as % of

revenue

(RM mn)

163 126

YTD FY18 YTD FY19

3%4%as % of

revenue

(RM mn)

Key capex investments in FY19 include:

▪ Technology infrastructure

▪ Customer experience

▪ Product and service upgrading

Capex STBs

▪ STBs/ODUs are owned by Astro, and are capitalised

▪ STBs/ODUs are conservatively amortised over 3 years;

note that actual useful life is typically greater than 5

years

▪ Discretionary 36 month bullet payment vendor

financing is available for Astro for STB/ODU purchases

▪ RM637mn of vendor financing recorded in payables, of

which RM207mn is current and RM430mn is non-

current

123 102

YTD FY18 YTD FY19

10 | 3QFY19 results

Strong and stable cash generation capabilities

1,576 1,490

416 378

1,160 1,113

Cash fromoperations

Cash frominvesting

Free cash flow Cash fromoperations

Cash frominvesting

Free cash flow(2) (3) (3)(2)

197% 323%as % of PATAMI

(RM mn)

YTD FY18 YTD FY19

Free cash flow

…enabling significant flexibility on capital management and dividend policy

NB

(1) Data presented are for 9 months ended 31 October

(2) Excludes investments, disposals and maturities of unit trust and money market funds

(3) Excludes repayments of vendor financing and payments of finance leases, which are categorised as cash from

financing for consistency with Bursa disclosure


11 | 3QFY19 results

▪ Leveraging on invested capital, AMH continues to be highly cash generative

▪ The Board of Directors of AMH has declared a quarterly dividend of 2.50 sen per share for 3Q FY19

▪ Quarterly dividend entitlement and payment dates 20 December 2018 and 4 January 2019

respectively

Quarterly dividend announcement

12 | 3QFY19 results

BEST IN CLASS CONTENT

EXCLUSIVE MEMBERSHIP PRIVILEGES &

LIFESTYLE EXPERIENCESSEAMLESS EXPERIENCE

ACROSS DEVICES

V I P

o Vernacular contento Live sportso Blockbusters & latest movieso Premium user experience with

4K UHD channels/titles *

o Recording and on demand services with access to over 40k titles within our content library

o Accessible on multiple deviceso Seamless content mobility &

portability with cloud PVR services *

o Rewards and privileges o Off-screen lifestyle

engagement & experiences *

o Exclusive bundle including broadband *

TV

Enhancing our customer value proposition

NB

* Denotes upcoming initiatives13 | 3QFY19 results

Connected STBs(+37% YoY)

963k

38mnOD Downloads

(+185% YoY)

Multiscreen

(Connected STBs

& Astro Go)

1 in 3

Connected STBs

average weekly

viewing hours

48 hrs

Multiscreen

average weekly

viewing hours

53 hrs

963k connected STBs driving on demand

content consumption

NB

(1) YoY refers to 3QFY18 vs. 3QFY19

(2) Connected set-top boxes (STBs) are connected to the internet and have access to Astro’s On Demand library of content

(3) 1 in 3 Astro households are multiscreened Astro customers

(1)

(1)

TV

14 | 3QFY19 results

(3)

Vernacular content underpins viewership share..

15 | 3QFY19 results

FTA 25%

Vernacular content

64%

Others36%

Astro 75%

3Q FY19 TV Viewership Key Malay IPs

Key Chinese and Indian IPs

Anugerah Meletop

Era 2018

TV viewership

3.3 mn 3.3mn 3.1mn

Gegar Vaganza S5

Evening Edition Astro Classic GM Thigil S4

TV viewership

436k 340k 194k

CONTENT

193channels

74Astro-branded

channels

31channels

Pay-TV

NJOI

NB

(1) Number of channels as at 3Q FY19

(2) Target Audience: Kantar Media, Dynamic TV Audience Measurement (DTAM). All Astro Pay-TV viewers

..and digital views, such as our new IP Big Stage

16 | 3QFY19 results

2.4mnTV viewership

76kdownloads

4 weekstwitter trending

• Most popular YouTube video in

Malaysia during semis and final

• 5.5mn views for Big Stage Live+

videos across 8 weeks on YouTube

• 120k live interactions on Gempak

YouTube during transmission

26mndigital views

19mn

6mn

1mn

CONTENT

website

#1 Premium Content CreatorCONTENT

Astro content hours Next largest contentcreator in Malaysia

3.5x

content

created

yearly

Our first Hong Kong

original mini-series to

be licensed globally:

17 | 3QFY19 results

1st Astro IP on Netflix

Celestial Movies

channel available in

HK, Singapore,

Indonesia, Philippine

Astro Boo channel

available in

Malaysia, Philippine,

Local movies set new benchmark – rivalling

Hollywood blockbusters

CONTENT

RM30mn

Sep 2018

RM17mn and counting

22 Nov 2018

RM38mn

Aug 2018

18 | 3QFY19 results

Most trusted Malaysian news sourceCONTENT

19 | 3QFY19 results NB

(1) According to results of Reuters Institute Digital News Report 2018

Pre GE14:Jan-Apr 2018

Post-GE14:June-Oct 2018

Average Awani TV viewers

Average monthly unique visitors onastroawani.com

Awani TV viewers almost treble post GE

spurred by engaging and exclusive

multilingual programming

TV viewers on a

higher plane

post GE14 in

May 2018

(1)

Connecting with millennials through eSportsDIGITAL

20 | 3QFY19 results

16-18 Nov 2018, Axiata Arena

The Kuala Lumpur Major 16th – 18th November

• Biggest international eSports

tournament in Malaysia

• 870k unique viewers on eGG

Network

• 100 hours live in more than 4

languages

• 7.2 mn hours - most watched

eSports event on Twitch.tv

7.6k peak

attendance at

venue

20 | 3QFY19 results

100% Pre-sale tickets

sold with ticket

price ranging from

RM180 – RM600

>112

playersfrom around

the world

80% of venue

filled with

Dota 2 fans

Landed in 8 countries

Appendix

(RM mn) YTD FY18 YTD FY19

EBITDA 1,429 1,223

Margin % 34% 30%

Depreciation and amortisation (500) (494)

EBIT 929 729

Margin % 22% 18%

Finance income 57 31

Finance cost (171) (280)

Share of post tax results from investments (1) 1

PBT 815 480

Tax expense (231) (138)

Tax rate % 28% 29%

PAT 583 342

PATAMI 589 345

Margin % 14% 8%

Normalised PATAMI 566 404

Margin % 14% 10%

NB

(1) Depreciation and amortisation

excludes the amortisation of film

library and programme rights which is

expensed as part of content costs (cost

of sales)

(2) Normalised PATAMI excludes post-tax

impact of unrealised forex gain/(loss)

3Q FY19: (RM 59m), 3Q FY18: RM 23m

due to mark-to-market revaluation of

M3B transponder lease liabilities

(3) Numbers may not add up due to

rounding differences

(2)

(1)

PAT reconciliation

22 | 3QFY19 results

(RM mn) FY18 3Q FY19

Non-current assets 4,807 4,755

Property, plant and equipment 2,401 2,247

Other non-current assets 2,406 2,508

Current assets 2,041 2,029

Receivables and prepayments 1,012 701

Cash and bank balances(1) 962 1,202

Other current assets 67 126

6,848 6,784

(RM mn) FY18 3Q FY19

Non-current liabilities 3,791 4,002

Payables 390 430

Borrowings 3,319 3,490

Other non-current liabilities 82 82

Current liabilities 2,404 2,074

Payables 1,653 1,422

Borrowings 646 602

Other current liabilities 105 50

Shareholders’ equity 653 708

6,848 6,784

Net debt / LTM EBITDA: 1.8x

NB

(1) Includes money market unit trusts


Balance sheet overview

23 | 3QFY19 results

1,660

615

304

384

505

630

3QFY19

Finance lease SFCL

Unrated MTN RM TL (new)

RM TL USD TL

(RM mn)Total borrowings

Total borrowings of RM4,092mn is net of

debt issuance costs (RM6mn)

Debt profileUSD term

loan

RM term

loan (new)

Finance lease

(primarily

satellite

transponders)

▪ As at 31 October 2018, outstanding principal US dollar term loan stood at USD148.5mn

▪ First drawdown date was on 8 June 2011, amortised repayment schedule with final maturity date on 8 June

2021. Average life: 7 years

▪ Fully hedged via cross currency interest rate swap at an exchange rate of USD/RM3.0189 and an all-in interest

rate of 4.19% p.a.

▪ The eleventh principal repayment of USD24.75mn (RM74.72mn) is scheduled to be paid on 10 December 2018

▪ As at 31 October 2018, total outstanding principal RM term loan stood at RM500mn after voluntary prepayment

of RM400mn made on interest payment date of 20 August 2018

▪ First drawdown date was on 19 May 2011, amortised repayment schedule with final maturity date on 19 May

2021. Average life: 7 years

▪ All-in interest rate (post-hedging) for the hedged portion of RM275.0mn is 5.44% p.a. while balance unhedged of

RM225.0mn stood at 5.13% p.a. (variable floating rate based on cost of funds)

▪ Following the August prepayment, the recalculated twelfth principal repayment of RM83mn was paid on 19

November 2018. A further RM230 million was prepaid on the same date.

▪ Finance lease related to lease of Ku-band transponders on MEASAT-3, MEASAT-3A and MEASAT-3B. Payment

arrangement for the remaining contractual years for M3 and M3A have been redenominated into Ringgit at

USD/RM3.0445 w.e.f. 21 May 2013. The unhedged portion of the finance lease related to M3B is USD301mn

▪ Effective interest rate: 6.2%, 4.6%, 12.5% and 5.6% p.a. for M3, M3-T11, M3A and M3B respectively, average

life: 15 years

Unrated MTN

▪ The first series of notes under the unrated medium-term notes (MTN) programme of up to RM3.0bn in nominal

value of up to 15-year tenor was issued on 10 August 2017. The issuance was for RM300mn with a 5-year tenor

at fixed rate of 5.30% p.a. with semi-annual coupon payment

▪ Bullet repayment on 10 August 2022

24 | 3QFY19 results

Synthetic

Foreign

Currency

Loan (SFCL)

▪ The USD150mn SFCL facility of 4 years 11 months tenor amounted to RM612.7mn upon conversion at the

agreed exchange rate of USD/RM4.0850

▪ Drawn down in 2 tranches of RM306.4mn each on 29 December 2017 and 28 February 2018 respectively, at a

fixed rate of 4.80% p.a. with quarterly interest payment

▪ Bullet repayment on 29 November 2022

RM term loan

▪ Term Loan facility of RM380mn with a 5-year tenor secured and fully drawn down on 23 August 2018, at a fixed

rate of 5.18% p.a. with quarterly interest payment

▪ Repayment in 2 tranches i.e. RM50mn on 23 February 2023 and RM330 million on 23 August 2023

Thank you

astro.com.my

3rd quarter fy19 results - astro · 2018-12-05 · share of tv adex is based on astro and group...

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