SAFE HARBOUR DISCL SAFE HARBOUR DISCLOSURE OSURE FORWARD-L - - PowerPoint PPT Presentation
SAFE HARBOUR DISCL SAFE HARBOUR DISCLOSURE OSURE FORWARD-L - - PowerPoint PPT Presentation
SAFE HARBOUR DISCL SAFE HARBOUR DISCLOSURE OSURE FORWARD-L FORWARD-LOOKING ST OOKING STATEMENTS TEMENTS To the extent any statements made in this presentation contain information that is not historical; these statements are forward-looking
SAFE HARBOUR DISCL SAFE HARBOUR DISCLOSURE OSURE FORWARD-L FORWARD-LOOKING ST OOKING STATEMENTS TEMENTS
To the extent any statements made in this presentation contain information that is not historical; these statements are forward-looking statements within the meaning of applicable securities laws. These forward-looking statements related to, among other things, our objectives, goals, strategies, intentions, plans, estimates and outlook can generally be identified by the use of the words such as “believe”, “anticipate”, “expect”, “intend”, “plan”, “will”, “may” and other similar expressions. In addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances are forward-looking statements. Although Corus believes that the expectations reflected in such forward-looking statements are reasonable, such statements involve risks and uncertainties and undue reliance should not be placed on such statements. Certain material factors or assumptions are applied in making forward-looking statements and actual results may differ materially from those expressed or implied in such statements. Important factors that could cause actual results to differ materially from these expectations include, among other things, our ability to attract and retain advertising revenues; audience acceptance of our television programs and cable networks; our ability to recoup production costs; the availability of tax credits and the existence of co-production treaties; our ability to compete in any of the industries in which we do business; the opportunities (or lack thereof) that may be presented to and pursued by us; conditions in the entertainment, information and communications industries and technological developments therein; changes in laws or regulations or the interpretation or application of those laws and regulations; our ability to integrate and realize anticipated benefits from our acquisitions and to effectively manage our growth; our ability to successfully defend ourselves against litigation matters arising out of the
- rdinary course of business; and changes in accounting standards. Additional information about these factors and about the material
assumptions underlying such forward-looking statements may be found in our Annual Information Form. Corus cautions that the foregoing list of important factors that may affect future results is not exhaustive. When relying on our forward-looking statements to make decisions with respect to Corus, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. Unless
- therwise required by applicable securities laws, we disclaim any intention or obligation to publicly update or revise any forward-looking
statements whether as a result of new information, events or circumstances that arise after the date thereof or otherwise.
Tom Peddie
Executive Vice President and Chief Financial Officer
Corus Entertainment Investor Day 2014
Wednesday, January 29, 2014
Creating Value for Shareholders
1. Strong balance sheet ü Completed refinancing Feb/Mar 2013
- Issued Cdn $550M 4.25% Senior Unsecured Guaranteed Notes due 2020
- Annual interest costs reduced by almost $15M
2. Focus on returning cash to shareholders with a strong dividend yield of 4%+ ü Dividend increased 6.9% to $1.09 per Class B Share in fiscal 2014 3. Excellent Free Cash Flow ü Delivered $154M in Free Cash Flow in fiscal 2013 4. Disciplined use of leverage for acquisitions
Returning Cash to Shareholders With a Strong Dividend Yield of 4%+
0.03 ¡ 0.04 ¡ 0.13 ¡ 0.53 ¡ 0.56 ¡ 0.60 ¡ 0.60 ¡ 0.74 ¡ 0.92 ¡ 1.00 ¡ 1.06 ¡
2004 ¡ 2005 ¡ 2006 ¡ 2007 ¡ 2008 ¡ 2009 ¡ 2010 ¡ 2011 ¡ 2012 ¡ 2013 ¡ 2014E ¡ Annual Dividend Payout History
For the fiscal years ended August 31 ($CDN per Class B Share, Split Adjusted)
Dividend ¡as ¡% ¡of ¡ ¡Free ¡Cash ¡Flow ¡ ¡
5 ¡Year ¡CAGR ¡12.1% ¡
- Consistently positive Free Cash Flow driven by strong underlying performance
- Free Cash Flow totaled $154M in fiscal 2013
- Annual capital expenditures of $15M - $20M per year, with no significant capital investment
- n the horizon
Opera1ng ¡and ¡Free ¡Cash ¡Flow ¡
Corus Delivers Strong Free Cash Flow
* Free Cash Flow normalized for business combinations, fiscals 2010 – 2011 adjusted for continuing operations Fiscal ¡Year ¡
Millions ($CDN)
Free ¡Cash ¡Flow ¡ ¡ Per ¡Share ¡($CDN) ¡
2015E 2015E (Guidance) )
Net Debt and Leverage
Strong Balance Sheet and Credit Rating
Interest ¡on ¡Long-‑Term ¡ Debt ¡($M) ¡ $33 ¡ $29 ¡ $37 ¡ $45 ¡ $39 ¡ $33 ¡ $38 ¡
- Including pending amendment, unused lines of credit = $250M - $500M
- Largely fixed rate financing to 2020 at 4.25%
- DBRS Issuer Credit rating: BBB(low)
- S&P Corporate Credit rating: BB+
Acquisition Impact on Corus: TELETOON, Historia and Séries+
Standalone ($M) Acquisitions (2) ($M) Synergies ($M) Proforma ($M) % Change Fiscal 2013 Revenue (1) 803.5 104.0
- 907.5
13% Fiscal 2013 EBITDA (1) 270.0 48.0 12.0 – 15.0 330.0 22% Adjusted Earnings per Share 1.65 2.04 24%
Proforma 2015E @ ~2% CAGR 2015E @ ~3% CAGR 2015E @ ~4% CAGR
2015E Se 2015E Segment Pr gment Profit – CA
- fit – CAGR Scenarios
GR Scenarios
$330M $360M $340M $350M
A great transaction for Corus shareholders
(1) Results not restated for IFRS 11 – Joint Arrangements (2) Net acquisition multiple of 8x
80 100 120 140 160
S&P/TSX Composite Index S&P/TSX Consumer Discretionary Index Corus (CJR.B)
$ $
Return on $100 invested August 31, 2010
Corus: 3 Year Total Shareholder Return = 13% CAGR (1)
Corus Delivered Exceptional 3 Year Performance
(1) Assumes reinvestment of dividends
$28 $32 $36 14x 16x 18x Free Cash F ee Cash Flo low Multiple w Multiple Share Price
Potential Share Value
- Free Cash Flow = Increased Shareholder Value
- Free Cash Flow of $170M using Free Cash Flow multiples of 14x to 18x would
equate to a CJR.B share price of $28 to $36
Consolidated EBITDA $340 million to $360 million Free Cash Flow $170 million +
Financial Guidance: Fiscal 2015
Doug Murphy
Executive Vice President and Chief Operating Officer
Corus Entertainment Investor Day 2014
Wednesday, January 29, 2014
All Corus Brands Reel
KIDS 2 of the top 3 networks MILLENNIALS 2 of the top 6 networks FAMILIES (CO-VIEW) 2 of the top 3 networks WOMEN 2 of the top 3 networks
Corus TV Owns the Podium
16 ¡
Source: ¡ ¡BBM ¡Canada ¡TV ¡Meter, ¡August ¡26, ¡2013 ¡to ¡January ¡5, ¡2014 ¡(19 ¡wks), ¡Kids ¡= ¡K2-‑11, ¡Women ¡= ¡W25-‑54, ¡Families ¡= ¡A18+ ¡with ¡children ¡under ¡12, ¡ Millennials ¡= ¡A18-‑34. ¡Ranking ¡based ¡on ¡Commercial ¡Canadian ¡English ¡Specialty ¡and ¡Digital ¡Networks
Compelling and Exclusive Content
17 ¡
Canada’s Brand Steward
18 ¡
ü Best-in-class margins and strong Free Cash Flow ü Experienced management team Canada’ Canada’s onl s only pur y pure play media and enter e play media and entertainment company tainment company
19 ¡
Aligned and Focused on Growth
Photo: Richard JohnsonHow Will Corus Grow?
20 ¡
21 ¡
Our Building Blocks for Growth
YTV Merry 6mas Reel
¡ ¡
The Corus Advantage Works
23 ¡
Highest increase (11%) in the number of children aged 4 and under in 50 years!
Source(s): Statistics Canada, CANSIM table 102-4502, Births, Catalogue no. 84F0210X and Selected Historical Statistics, Canada, 1921-2009, Catalogue
- no. 82-553X Occasional.
Canada’s Mini Baby Boom
24 ¡
Population
All Roads Lead to Corus Kids
25 ¡
The entertainment and toy categories return to solid growth on Corus networks!
- Our category-specific research and
insights create advertiser value
Growing Kids Advertising
26 ¡
15% 21% 13% 12% 11% 9% 11% 8% 3% 10% 5% 6% 4% 5% 5% 1% 3% 3% 6% 2% 2% 3% 1% 1% 24% 24% 22% 21% 20% 19% 19% 19% 18% 16% 16% 13% 13% 12% 10% 10% 10% 10% 10% 9% 8% 8% 6% 6%
Solo View Recall Co-View Recall
Co-View Works!
27 ¡
Source: DECODE Research, Oct 2011, English Canada Moms with Kids 2-12
F09 F10 F11 F12 F13
Ad Revenue
Co-View Keeps Growing!
28 ¡
1 3 % ¡ C A G R ¡
Systems Programming Headcount
Integration of TELETOON is Complete
29 ¡
People/Facility Integration: January 16, 2014 Business/Broadcast Systems: January 27, 2014
ü Revenue and Expense Synergies Complete
Complementary Scheduling Maximizes Audiences
30 ¡
31 ¡
Leveraging our Strategic Partnerships
32 ¡
33 ¡
Content Pipeline Focused on Boys Action and Preschool
Mysticons Promo
We’re Excited About MYSTICONS
- Boys Action Property
- Production 2014
- Broadcast 2015
- Retail 2016
35 ¡
Little Charmers Promo
- Girls Preschool Property
- Production 2014
- Broadcast 2015
- Retail 2016
We’re Excited About LITTLE CHARMERS
37 ¡
Trucktown Promo
- Boys Preschool Property
- Renowned author Jon Scieszka
- Production 2014
- Broadcast 2015
- Retail 2016
We’re Excited About TRUCKTOWN
39 ¡
2010 2011 2012 2013E 2013A 2015E
Nelvana Digital Revenues
Digital Marketplace Unlocks Substantial Value in Nelvana Library
$20M $14M
40 ¡ $9.0M $3.8M $1.4M $0.1M
41 ¡
Our Building Blocks for Growth
W Network / Family Reel
Source: BBM Canada TV Meter - Broadcast weeks 1-52(53), Total Canada, Women 25-54, M-Su 2a-2a, Average Minute Audience (000s).
Another Year of Growth
7% Growth Compared to F12
43 ¡
10 15 19 20 19 20 21 3 3 3 2 4 6 2 2 2
5 10 15 20 25 30 35 F02 F04 F06 F08 F10 F12 F13 Average Minute Audience (000s) W Network Cosmo TV OWN W Movies
4% 36% 60%
Revenue based on TSS 2012-2013, English Canada Only
Room to Grow!
44 ¡ Specialty Networks Conventional Stations Corus Networks
Share of Revenue
Mon-Thurs 8p-11p W25-54 AMA (000s) +24%
Source: BBM Canada TV Meter; Total Canada, 2013/14, 2012/13, weeks 1-52
33 44
0 ¡ 10 ¡ 20 ¡ 30 ¡ 40 ¡ 50 ¡
Canadian Originals
F12 F13
Average Minute Audience (000s)
W Network Originals Deliver Audiences
45 ¡
46 ¡
Increasing Content Ownership in Women & Family
ü Original Programming Drives Ratings ü Focus on Unscripted Reality Series ü Ownership Creates International Option Value ü Complete Control of All Rights
Tessa and Scott Promo Tori and Dean Promo
48 ¡
W Network Ratings Gains Ring the Cash Register
One Ratings Share Point is $20M in Revenue
2 4 6 8 10 12
Total Day (6a-6p) Prime (6p-12a)
F12 F13
OWN Delivers Gold!
Total Average Minute Audience (000s)
+30% +34%
49 ¡
Source: BBM Canada TV Meter, W25-34.Total Canada 2013/14, 2012/13, weeks 1-52
Ad Revenue +13%
W Movies Adds Audience and Revenue
0.5 1 1.5 2 2.5 3 3.5
Total Day (6a-6p) Prime (6p-12a)
F12 F13
+33% +45%
Ad Revenue +38%
Total Average Minute Audience (000s)
50 ¡
Source: BBM Canada TV Meter, W25-34.Total Canada 2013/14, 2012/13, weeks 1-52
ABC Spark Promo
ABC Spark is a Hit with Millennials
2 4 6 8 10 12 14
Total Day (6a-6p) Prime (6p-12a)
F12 F13
+70% +69%
Ad Revenue
+100%
Total Average Minute Audience (000s)
52 ¡
Source: BBM Canada TV Meter, A18-49, Total Canada 2013/14, 2012/13, weeks 1-52
53 ¡
Our Building Blocks for Growth
The Golden Age of Content
- n Pay TV
54 ¡
Movie Central Promo
Pay TV Service is a Strong Value Proposition
56 ¡
More than 1,000 Hours of HD On-Demand Content, Anywhere, Anytime, On Any Device!
Canadians who watch the most TV will watch even more… up 10% from 2009
Pay A ay Audiences Ha udiences Have e an Insa an Insatia tiable A ble Appetite ppetite for Content
- r Content
57 ¡
Source: Deloitte Technology, Media & Telecommunications Predictions 2014, English-Speaking Canadians
Encore On-Demand Promo Movie Central On-Demand Promo
ü Collaboration with Bell on The Movie Network ü Packaging and Bundling Innovation ü The Best Exclusive Content
Pay TV Will Grow
59 ¡
60 ¡
Our Building Blocks for Growth
Radio is Important to Corus
61 ¡
TALK CLASSIC ROCK HOT AC/WOMEN COUNTRY MODERN ROCK GREATEST HITS
Revenue Growth 2% 3% 4% 5% 6% Expense Growth 1% 4% 8% 11% 14% 18% 2% 2% 5% 9% 12% 15% 3% 0% 3% 6% 10% 13% 4% (3%) 1% 4% 7% 11%
Radio Has Significant Operating Leverage
62 ¡
$ Millions
Major Markets Offer Best Opportunity to Realize Operating Leverage
63 ¡
0 ¡ 5 ¡ 10 ¡ 15 ¡ 1 ¡ 2 ¡ 3 ¡ 4 ¡ 5 ¡
Share point increases deliver substantial revenue growth
Share Points
Q107 TV Spot Property Brothers Radio Spot
65 ¡
Born to Rock Promo
67 ¡
Our Building Blocks for Growth
Historia / Séries+ Reel
Corus Enters Quebec with a Portfolio of Strong Brands
69 ¡
Historia, Séries+ and TELETOON are Top Performers in Quebec
1 Source: BBM TV Meter. Based on audience share of all French-language specialty channels for viewers aged 25-54.Bell ¡ 40.1% ¡ Corus ¡ 21.3% ¡ Québecor ¡ 18.4% ¡ SRC/CBC ¡ 8.4% ¡ Other ¡ 11.8% ¡
Share of French Specialty Audience 25-54 (2012-2013)1
70 ¡ 2012 2013 Revenue EBITDA
+12% +7% Historia & Séries+
Quebec is a Unique Market… Full of Potential
71 ¡
72 ¡
TELETOON integration and leveraging of Corus Advantage to launch new global kids properties
Corus Kids Women & Family Pay TV Radio Corus Média
Corus Will Continue to Grow
Corus 2015
EBITDA ¡Guidance ¡ ¡$340M ¡– ¡$360M ¡ Free ¡Cash ¡Flow ¡ ¡ ¡ ¡ ¡ ¡$170M ¡
Driving ratings through more original owned content with global appeal Targeted programs to acquire and retain subscribers Focused on delivering ratings and building presence in Ottawa Strong foundation for growth in the Quebec TV market