investor presentation - gazeta.plbi.gazeta.pl/im/4/3053/m3053914.pdf · gazeta super express metro...
TRANSCRIPT
Investor presentationNovember 2005
Consolidated figures according to International Financial Reporting Standards (IFRS)
2
2.2%
2.0%1.8%1.7%
1.6%1.7%1.6%1.6%1.4%
0%
1%
2%
3%
Jan '05 Feb '05 Mar '05 Apr '05 May '05 Jun '05 Jul '05 Aug '05 Sep '05
Employment in companies
IMPROVING ECONOMIC PICTURE
-16.4%-12.1%
-23.7%
-34.4%-38.8%
-57.1%
-19.6%
0.2%
-10.8%
-60%
-40%
-20%
0%
20%
Jan'05 Feb'05 Mar'05 Apr'05 May'05 Jun'05 Jul '05 Aug '05 Sep '05
No. of cars
4.8%5.5%
4.6%2.3%
-3.7% -1%0.9%
6.9%2.6%
10.5%6.5%
18.5%
13.2%
-3.8%
-17.7%
21.8%
29.9%
17.4%
-30%
-20%
-10%
0%
10%
20%
30%
Jan '05 Feb '05 Mar '05 Apr '05 May '05 Jun '05 Jul '05 Aug '05 Sep '05
Industrial output (not corrected for seasonal factors) Construction
5.4%
7.9%5.0%
10.5%8.0%
-14.4%
-0.3%
2.4%
7.5%
-20%
-10%
0%
10%
20%
30%
Jan'05 Feb'05 Mar'05 Apr'05 May'05 Jun'05 Jul '05 Aug '05 Sep '05
Retail sales / current prices
Construction drives growth of industrial output Retail sales up
Jobs are growing New car sales are volatile
Source: Central Statistical Office, IBRM SAMAR
yoy % change yoy % change
yoy % changeyoy % change
3
MORE OPTIMISTIC ECONOMIC FORECASTS
4.3%
3.3%
2.4%
0%
1%
2%
3%
4%
5%
1H 2005 2005 AF 2006 F
8.7%
4.9%
2.6%
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
10%
1H 2005 2005 AF 2006 F
3.7%
2.0%
1.6%
0%
1%
2%
3%
4%
1H 2005 2005 AF 2006 F
1.5%
2.1%
2.9%
0%
1%
2%
3%
4%
1H 2005 2005 AF 2006 F
GDP growth CPI
Individual consumptionCompany investments
Source: Central Statistical Office, Ministry of Finance - Budget assumptions for the year 2006 presented to the Polish Parliament
yoy % change
yoy % changeyoy % change
yoy % change
4
ADVERTISING MARKET CONTINUES TO GROW
13%
8%
16%
12%
4%
17%
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
1Q 2005 2Q 2005 3Q 2005
Total ad spend TV
34%
11%8%
13% 13%
7%
31%
12% 11%
0%
5%
10%
15%
20%
25%
30%
35%
40%
Outdoor Radio Magazines
1Q 2005 2Q 2005 3Q 2005
11%
16%
13%
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
Newspapers
1Q 2005 2Q 2005 3Q 2005
Total ad spend in 1-3Q 2005 grew by ca.12%
Strong growth in smaller media
TV takes 50% ofelectoral budgets
Dailies continue to grow fast yoy % change
yoy % change
yoy % change
Source: Agora’s estimates adjusted for average discount rate (data in current prices). The estimates refer to advertising expenditures in four media (TV, print, radio and outdoor), which in case of print do not include classifieds, inserts and obituaries. The estimates are based on rate card data of AGB Polska monitoring, Expert Monitor monitoring, Agora monitoring and Izba Gospodarcza Reklamy Zewnetrznej (IGRZ) monitoring.
Deceleration driven by lower
growth rate of TV
5
10
20
30
40
50
60
70
80
90
1Q03 2Q03 3Q03 4Q03 1Q04 2Q04 3Q04 4Q04 1Q05 2Q05 3Q05
Commercial TVN and Polsat Public TVP1 and TVP2
Prime time and off peak in commercial TV
40%
60%
80%
100%
Jan Feb Mar Apr May Jun Jul Aug Sep
Prime time Off peak
Prime time and off peak in public TV
10%
30%
50%
70%
Jan Feb Mar Apr May Jun Jul Aug Sep
TV RUNS AT FULL CAPACITY
30%
40%
50%
60%
70%
80%
90%
100%
1Q03 2Q03 3Q03 4Q03 1Q04 2Q04 3Q04 4Q04 1Q05 2Q05 3Q05
Prime time (commercial TVN and Polsat) Prime time (public TVP1 and TVP2)
Source: AGB Polska
One-week advertising break
Number of TV spots
% usage
thou
TV inventory sell-out rates
% usage
% usage
2005
2005
6
PRESS IS STILL BELOW PEAK LEVELS
Source: GDP growth - Central Statistical Office. Advertising market data: Poland - Agora’s estimates adjusted for average discount rate (constant prices). The estimates refer to advertising expenditures in four media (TV, print, radio and outdoor), which in case of print do not include classifieds, inserts and obituaries. The estimates are based on rate card data of AGB Polska, IP Polska, Expert Monitor monitoring, monitoring of Agora and AMS according to IGRZ.. CPI adjustments based on Central Statistical Office data for 2000, 2001, 2002, 2003, 2004 and 1-3Q 2005.
0
500
1 000
1 500
2 000
2 500
3 000
3 500
4 000
4 500
TOTAL TV Dailies Magazines Outdoor Radio
1-3Q 2000
1-3Q 2005 constant prices +1-3Q 2005 current prices
Print will not reach
2000 level in 2005
PLN mln
7
0%
2%
4%
6%
8%
10%
12%
14%
16%
1-3Q 2004 1-3Q 2005
Re Return on equity
0
20
40
60
80
100
120
140
160
180
200
1-3Q 2004 1-3Q 2005
Free cash f low Capex
0
20
40
60
80
100
120
1-3Q 2004 1-3Q 20050%
5%
10%
15%
Net profit Net margin
AGORA�S PERFORMANCE TAKES OFF
PLN mlnGrowth in free cash flow Return on equity ahead of cost of equity
Strong operating results Net earnings grow significantly
0
20
40
60
80
100
120
140
1-3Q 2004 1-3Q 20050%
5%
10%
15%
20%
EBIT EBIT margin
PLN mln
!10.6pp
!262.6% !316.3%
!97%
!9.5
pp
yoy change yoy change
yoy % change
PLN mln
8
GROWTH IN SCALE CHANGES COMPOSITION OF REVENUES AND COST
0
100
200
300
400
500
600
700
800
900
1-3Q 2004 1-3Q 2005
RevenuesPLN mln
!20.6%
Operating cost
+11.9%
-0.7%
+229.5%
+15.8%
0
100
200
300
400
500
600
700
800
1-3Q 2004 1-3Q 2005
PLN mln
!7.2%+37.6%
+28.0%
+0.5%
-8.1%
-15.0%
advertising circulation books other materials promotion staff cost
D&A other
yoy % changeyoy % change
PLN 6 million dedicated to development
Source: Consolidated figures according to International Financial Reporting Standards (IFRS)
9
MAJOR LINES OF BUSINESS GROW STRONGER
PLN 188.7 million
EBITDA margin 27.8%
EBITDA PLN 208.4 millionRevenues PLN 872.9 millionTHE GROUP
% of total yoy % growth
63%
229.5229.5%%
NEWSPAPER SEGMENT
7.57.5%%
35.135.1%%
2.5pp2.5pp
15%
SSource: Consolidated figures according to International Financial Reporting Standards (IFRS), 1-3Q 2005. Newspaper segment includes: Gazeta Wyborcza, Metro, Internet, books, as well as cost of overhead.
10
MAJOR LINES OF BUSINESS GROW STRONGER
PLN 22.5 million
EBITDA margin 22%
EBITDA PLN 208.4 millionRevenues PLN 872.9 millionTHE GROUP
% of total yoy % growth
2222%%
5561.861.8%%
117.97.9pppp
12%
Source: Consolidated figures according to International Financial Reporting Standards (IFRS), 1-3Q 2005
OUTDOOR
Scale of operationScale of operationss increasesincreases
! Over 1500 new citylight panels
in three big cities
! Fully operational by e/o June 2006
! Investment of PLN 10 million
! 240 wall-mounted panels by e/o 2006
11
MAGAZINES AND RADIOS ARE SMALL MARKET PLAYERS
PLN (2.5) million
PLN 5.2 millionEBITDA margin 7.6%
EBITDA PLN 208.4 million
! 11% radio market share
! Advertising share steady
! Managed under two brands �Golden Oldies and Soft Rock
! Slightly negative in 2005 dueto investment in Soft Rockbrand
! 6% magazine market share
! Ad revenues in line withthe market
! Copy sales decline reflectingmarket trend
! Successful new magazines
Revenues PLN 872.9 millionTHE GROUP
% of total yoy % growth
RADIO
MAGAZINES
4%
8%
Source: Consolidated figures according to International Financial Reporting Standards (IFRS), 1-3Q 2005
11%%
1166%%
12
1-3Q05
0
1000
2000
3000
4000
5000
6000
7000
Fakt
Gazeta
Super Express
Metro
Rzeczpospolita
1-3Q 2005
100
200
300
400
500
600
Fakt
Gazeta
Super Express
100
200
300
400
500
600
Jan Feb Mar Apr May Jun Jul Aug Sep
Metro
Metropol
Other38% Gazeta
42%
Rzeczpospolita9%Super Express
4%
Fakt6% Metro
1%
Circulation of Gazeta strengthens Metro nearly doubles its circulation
Source: copy sales, circulation: ZKDP (Circulation Audit Office); readership: Polish Readership Research (PBC General), Millward Brown Company SMG/KRC, weekly readership, January–September 2005, N=54 224; advertising: Agora, estimated data (current prices) corrected for average discount rate based on Agora Monitoring. The comparisons refer to 1-3Q 2005 and 1-3Q 2004.
thou copies
Advertising position
-0.6pp
19 cities since mid April 2005
NEWSPAPERS GROW CIRCULATION AND MARKET SHARE
!5%
"7%
"6%
yoy % changethou copies
ReadershipNo of readers (thou)
0%
!197%
!5%
"7%
"5%
yoy % change
13
BOOKS ADD SCALE BUT INCREASE VOLATILITY OF RESULTS
Accounting method(according to IFRS):
! Cost booked when incurred
(incl. first free volume)
! Revenues booked when
received
! Profit in late phase of eachproject
1M 2M 3M 4M 5M 6M 7M 8M 9M 10M 11M 12M 13M 14M 15M 16M 17M 18M 19M 20M
RevenuesCosts
Start ofStart ofthe the
projectprojectDuration of the projectDuration of the project
Q1 Q2 Q3 Q4 Q1 Q2
The graph does not refer to real numbers � it was prepared for illustrative purposes only.
14
NEWSPAPER BUSINESS IS EXPANDING: NOWY DZIEŃ
NOWY DZIEŃ � first popular mid-market newspaper in Poland
! Launched November 14, 2005
! Mid-market, broadly addressed national daily
! Target copy sales 250 thousand
! Promotion and marketing expense to reach
PLN 25-30 million in 4Q 2005 and
PLN 35-45 million in 2006
! Total cash investment PLN 60-80 million until
break even in 2008
Peop
le a
nd C
ultu
re
Spor
ts
New
s B
ody
and
Soul
Cover price PLN 1 every dayPLN 1.50 on Thursday (TV Guide)
15
WHAT TO EXPECT AHEAD IN 2005
! IFRS 2 � share based payments
write-off to be booked
in 4Q 2005 (ca PLN 7 million)
! Improved cost base due to
lower D&A but risk of provisions
after impairment
! Books add cost and increase
volatility and seasonality effects
! New projects increase cost
base
! �NOWY DZIE� to significantly
depress earnings in 4Q 2005
! Lower rate of revenue growth
in 2H 2005
! Cost cuts already reflected
in 2H 2004 results
Diminishing effect of baseDiminishing effect of base Expansion impacts resultsExpansion impacts results Accounting impactAccounting impact
16
GROWTH IS THE COMPANY�S OVERARCHING PRIORITY
0
50
100
150
200
250
300
350
400
450
500
550
600
2004 1-3Q 2005 Credit line
Share buy-back
PLN mln
Immediate funds availability
500
mill
ion
operating cash 4Q05
Dividend payoutDividend payout
! PLN 0.5 per share or PLN 28 millionon 2nd September 2005
Share buyShare buy--backback
! Value: PLN 120 million
! Timing: August 18, 2005 �June 30, 2006
! Method: main market (through the
broker); no block transactions; shares to becancelled
funds available+ =
Net cash