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3 rd Quarter FY19 Results 5 th December 2018 Disclaimer This - - PowerPoint PPT Presentation

3 rd Quarter FY19 Results 5 th December 2018 Disclaimer This document contains certain forward-looking statements with respect to Astro Malaysia Holdings Berhads (Astro) financial condition, results of operations and business, and


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3rd Quarter FY19 Results

5th December 2018

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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

  • bligation 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

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

Disclaimer

1 | 3QFY19 results

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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
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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

  • f 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

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SLIDE 5

Digital Assets 192 channels

  • Largest Pay-TV
  • perator in SEA
  • Serving 5.7mn

households

  • 77% household

penetration

  • 43% TV adex share
  • 963K connected STBs
  • 7.3mn avg monthly

unique viewers across

  • ver 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 brands OTT (Over-The-Top) Service

TV DIGITAL RADIO COMMERCE CONTENT

  • #1 premium

content creator & aggregator

  • Investing in content

verticals with regional reach

  • Produced 12K hours
  • f 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

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25% 75%

  • 2pp

TV Viewership Share 03:49 03:36 02:06 02:06 YTD FY18 YTD FY19

  • Avg. Time Spent/Day (hrs)

13.4 12.8 7.4 7.1 YTD FY18 YTD FY19

  • Avg. Daily Viewers (mn)

Astro FTA 1.5 2.1 3Q FY18 3Q FY19 4.2 5.4 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

702 963 3Q FY18 3Q FY19 Total Connected STBs (1)(2) (000s) +37% 13 38 3Q FY18 3Q FY19 Total Video Downloads (mn) +185% 381 457 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%
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1,121 1,140 1,149 1,107 1,076 1,162 1,107 143 208 175 196 151 161 179 62 70 73 85 84 94 98

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 1,417 1,384

6 | 3QFY19 results

1,326

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70 117 92 109 80 80 100 67 83 73 76 63 69 64 6 10 11 8 12 14

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

TV Radio Digital

YTD FY18 YTD FY19

Adex bounces back this quarter

Advertising 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 (7) Numbers may not add up due to rounding differences .

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)

7.3 6.9

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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 fans

NB (1) Data presented for 9 months ended 31 October (2) Cumulative as of 31 October

8 | 3QFY19 results

eCommerce delivers record performance

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405 353 447 408 352 602 418 624 690 706 778 665 693 663

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

Content costs Other expenses 1,017 1,295 1,081 1,029

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

Content cost as % of TV revenues

1,043

28%

1,153

36%

1,186

33% 30% 48%

9 | 3QFY19 results

34% 34%

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NB (1) Data presented are for 9 months ended 31 October (2) Numbers may not add up due to rounding differences

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

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Strong and stable cash generation capabilities

1,576 1,490 416 378 1,160 1,113 Cash from

  • perations

Cash from investing Free cash flow Cash from

  • perations

Cash from investing 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 (4) Numbers may not add up due to rounding differences

11 | 3QFY19 results

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▪ 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

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BEST IN CLASS CONTENT EXCLUSIVE MEMBERSHIP PRIVILEGES & LIFESTYLE EXPERIENCES SEAMLESS EXPERIENCE ACROSS DEVICES

V I P

  • Vernacular content
  • Live sports
  • Blockbusters & latest movies
  • Premium user experience with

4K UHD channels/titles *

  • Recording and on demand

services with access to over 40k titles within our content library

  • Accessible on multiple devices
  • Seamless content mobility &

portability with cloud PVR services *

  • Rewards and privileges
  • Off-screen lifestyle

engagement & experiences *

  • Exclusive bundle including

broadband *

TV

Enhancing our customer value proposition

NB * Denotes upcoming initiatives

13 | 3QFY19 results

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Connected STBs

(+37% YoY)

963k 38mn

OD 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)

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Vernacular content underpins viewership share..

15 | 3QFY19 results

FTA 25%

Vernacular content 64% Others 36%

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

193

channels

74

Astro-branded channels

31

channels

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

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

16 | 3QFY19 results

2.4mn

TV viewership

76k

downloads

4 weeks

twitter 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

26mn

digital views

19mn 6mn 1mn

CONTENT

website

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#1 Premium Content Creator

CONTENT

Astro content hours Next largest content creator in Malaysia

3.5x content created yearly

Our first Hong Kong

  • riginal 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,

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Local movies set new benchmark – rivalling Hollywood blockbusters

CONTENT

RM30mn Sep 2018 RM17mn and counting 22 Nov 2018 RM38mn Aug 2018

18 | 3QFY19 results

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Most trusted Malaysian news source

CONTENT

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 on astroawani.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)

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Connecting with millennials through eSports

DIGITAL

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 players

from around the world

80% of venue

filled with

Dota 2 fans

Landed in 8 countries

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Appendix

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(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

  • f

film library and programme rights which is expensed as part of content costs (cost

  • f 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

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

Balance sheet overview

23 | 3QFY19 results

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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 profile

USD 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

  • f 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

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Thank you

astro.com.my