nd Quarter FY19 Results · STBs/ODUs are owned by Astro, and are capitalised ... 256 244 723 691...

2nd Quarter FY19 Results

26th September 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 | 2QFY19 results

• ARPU of RM99.9

• 41% TV Adex share

• 75% Radex share

• 5.3mn to 5.6mn households

• 72% to 76% household penetration

• 1.3mn to 1.9mn Astro GO registered users

• 1.1mn to 1.5mn Go Shop registered customers

• 1.9mn to 4.3mn Tribe total downloads

• 7.0mn average monthly unique visitors to digital

assets

• Reach and scale

• Content IPs and verticals

• Digital and commerce ventures

• Operational efficiencies

• Talent – on-air and digital

GROW

MONETISE

LEAD

INVEST

• 75% TV viewership share driven by

vernacular content

• 920k connected STBs

• 16.9mn weekly radio audience

1H FY19 key performance highlights

Revenue -0.7%RM2.75bn→ RM2.73bn

FCF of RM691mn

-4% (from 723mn)

362% of PATAMI

Adex -11%RM351mn→ RM312mn

Norm. PATAMI -48%RM430mn→ RM225mn

EBITDA -26%RM1.01bn→ RM750mn

2 | 2QFY19 results

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 as sourced from

comScore

(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)

1H FY19: (RM 34m), 1H FY18: RM 12m

due to revaluation of M3B transponder

lease liabilities

(8) Data presented are for 6 months ended

31 July

(9) Numbers may not add up due to

rounding differences

1H FY19 year-on-year overview

Highlights 1HFY18 1HFY19 Growth

TV households (000s)(1) 7,261 7,380 1.6%

TV household penetration(2) 72% 76% 4 pp

TV customer base (000s) 5,262 5,635 7%

Pay TV ARPU (RM) 100.8 99.9 -0.9%

Astro TV viewership share(3) 77% 75% -1.5 pp

Radio listenership (mn) (4) 16.1 16.9 5%

Average monthly unique visitors (mn)(5) 6.8 7.0 3%

Connected STBs (000s) (6) 639 920 44%

Revenue (RM mn) 2,746 2,727 -0.7%

EBITDA (RM mn) 1,011 750 -26%

EBITDA margin 37% 28% -9 pp

Normalised PATAMI (RM mn) (7) 430 225 -48%

FCF (RM mn) 723 691 -4%

EPS (RM sen) 8.5 3.7 -56%

3 | 2QFY19 results

Digital Assets

192 channels

• Largest Pay-TVoperator in SEA

• Serving 5.6mn households

• 76% household penetration

• 41% TV adex share• 920K connected STBs

• 7.0mn avg monthly unique viewers across over 25 digital assets

• Tribe- regional OTT with 4.3mn(1)

downloads

• 24/7 shopping

experience

Malaysia &

Singapore

• 1.5mn registered

customers

• 11 radio brands

• 16.9mn 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

• Content producer &

aggregator

• Investing in content

verticals with

regional reach

• Produced 12K hours

of content in FY18

4 | 2QFY19 results Note:

(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

1.3

1.9

1H FY18 1H FY19

3.8

5.1

1H FY18 1H FY19

235 163

1H FY18 1H FY19

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

+48%+34%

-31%

Note:

(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

639920

1H FY18 1H FY19

Total Connected STBs (1)(2)

(000s)

+44%

7

24

1H FY18 1H FY19

Total Video Downloads (mn)

+243%

305415

1H FY18 1H FY19

Avg. Weekly Viewing (mins)

+36%

Growing non-linear viewing: On Demand and on the go

5 | 2QFY19 results

25%75%-1.5pp

TV Viewership Share

03:49 03:36

02:06 02:06

1H FY18 1H FY19

Avg. Time Spent/Day (hrs)

13.4 12.9

7.4 7.2

1H FY18 1H FY19

Avg. Daily Viewers (mn)

Astro FTA

192channels

73Astro-branded

channels

29channels

NB

(1) Number of channels as at 1H FY19

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

-3.7%

-2.7%

-5.7%

Pay-TV NJOI

TV viewership share remains strong

6 | 2QFY19 results

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

143 208 175

196 151

16162

70 73 85

84

94

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

Go Shop

Adex

Subscription/Others

Revenue resilient underpinned by growth drivers

34%

(11%)

(1%)

(RM mn)Total revenue YoY 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) YoY refers to 1H FY18 vs. 1H FY19

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

(0.7%)

(1)

1,326

1,420 1,397 1,388

1,311

1,417

7 | 2QFY19 results

71

120

96 112

83 85

72

89

79

84

6876


TV Radio

1H FY18 1H FY19

Temporary tax holiday impacts adex

Advertising income (RM mn) YoY growth(2)

-11%

-11%

(1)

Total Malaysia

gross ADEX YoY

growth

OVERALL ADEX

-6%

RADIO

-11%

TV

-7%

(2)(5)74% 75%

1H FY18 1H FY19

Share of Radex

Share of TV adex

Radio listeners (mn) (3)

77% 75%

1H FY18 1H FY19

Astro TV

viewership share (4)

NB

(1) Advertising income is net of commissions and discounts. Digital adex is included in TV and Radio adex


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

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

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


16.1-11% 16.9

143

43% 41%

1H FY18 1H FY19

208

175

196

151161

8 | 2QFY19 results

405 353 447 408 352

602

624 690

706 778

665

693


Content costs Other expenses

1,017

1,295

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


34%Content cost as % of TV

revenues

1,029 1,043

28%

1,153

36%

1,186

33% 30% 48%

Within expectations as

jump this quarter due

to 2018 FIFA World

Cup content cost

9 | 2QFY19 results

NB

(1) Data presented are for 6 months


Applying ROI discipline in capex spend

3% 2%as % of

revenue

(RM mn)

103 88

1H FY18 1H 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

▪ RM649mn of vendor financing recorded in payables, of

which RM199mn is current and RM450mn is non-

current

76 63

1H FY18 1H FY19

10 | 2QFY19 results

Strong and stable cash generation capabilities

979 935

256 244

723 691

Cash fromoperations

Cash frominvesting

Free cash flow Cash fromoperations

Cash frominvesting

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

162% 362%as % of PATAMI

(RM mn)

1H FY18 1H FY19

Free cash flow

…enabling significant flexibility on capital management and dividend policy

NB

(1) Data presented are for 6 months ended 31 July

(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 | 2QFY19 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 2Q FY19

▪ Quarterly dividend entitlement and payment dates: 11 October 2018 and 26 October 2018

respectively

Quarterly dividend announcement

12 | 2QFY19 results

132 177

1H FY18 1H FY19

Revenue(1)(RM mn)

34%

1,127 1,530

1H FY18 1H FY19

36%

Registered Customers(2)

(‘000)

COMMERCE

• Introduced Masterclass programme for Raya season

• Launch of English and Malay slots on our new variety

channel Hello (Ch. 110)

• Go Shop’s multiplatform reach now includes:

hour shopping channels: Malay (Ch. 118 & 120),

Chinese language (Ch. 303) on linear, OTT & ECMC

NB

(1) Data presented for 6 months ended 31 July

(2) Cumulative as of 31 July

13 | 2QFY19 results

Driving Go Shop sales with new programmes

Digital offerings for the young

• Available in 8 countries

• 1.6mn average monthly TV viewers

• 140 hours in-house programme

• Engaging eSports fans through The Kuala

Lumpur Major, organised in partnership

with PGL and Imba TV

1.9

4.3

1H FY18 1H FY19

Total downloads(1) (mn)

+126%

DIGITAL

NB

(1) Cumulative as of 31 July

eSports channel Regional OTT

14 | 2QFY19 results

Tribe’s originals IPs continue

to drive and solidify Tribe’s

regional reach

The Best World Cup ever!CONTENT

15 | 2QFY19 results

TV

11.6 mnunique viewers

40%more

TV viewers (1)

120kWorld Cup Passes sold,

+50% revenue uplift (1)

NB

(1) Compared to 2014 World Cup

OTT


Stadium Astro


87% of Malaysians

watched WC on

Astro TV channels

1st time ever

Virtual Reality live matches

145 k

sessions

Hantu spooks away the competition…

16 | 2QFY19 results

CONTENT

RM18mn

2017

RM18mn

2015

RM17mn

2016

RM17mn

2014

… building on our strong production capabilities

RM38mn

Aug 2018

Hantu and Munafik 2 set new box office

records, edging out Hollywood blockbusters including Mission Impossible: Fallout, Marvel’s

Deadpool 2 & Disney.Pixar’s Incredibles 2

17 | 2QFY19 results

CONTENT

Upcoming: Mega movie releases

Vernacular content driving viewershipCONTENT

TV viewership 3.3mn 3.1mn 436k3.1mn 330k 194k

On Demand 315k 396k 5k 39k 24k 7k

Evening Edition

18 | 2QFY19 resultsNB

Source: DTAM Kantar Media

Key Malay IPs Key Chinese IPs

Anugerah Meletop

Era 2018 Evening Edition ThigilPrime Talk

Key Indian IP

Connected STBs(+44% YoY)

920k

23.7mnOD Downloads

(+243% YoY)

Multiscreen

(Connected STBs

& Astro Go)

1 in 3

Connected STBs

average weekly

viewing hours

50 hrs

Multiscreen

average weekly

viewing hours

54 hrs

Connected STBs drive content consumption

NB


(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

19 | 2QFY19 results

(3)

TV

Upcoming: 4K Ultra High Definition (UHD)

4x more stunning and clearer view than HD

Smooth and natural viewing experience with

higher frame rate

Richer colour spectrum, up to 1.1 bn colour

palettes with 10 bit colour depth

• Showcased 2 UHD live matches on Premier

League season kickoff day on 13 August 2018

in Kuala Lumpur

• Secured exclusive Premier League rights up

to 2021/22

20 | 2QFY19 results

TV

21 | 2QFY19 results

Upcoming: Tech upgrades slated for end FY19

Features include:

New UI/UX with significant

improvement on usability & content

discovery, and Linear & VOD

recommendations

Enhanced content metadata to

improve content discovery

Multi user profiles to enable

personalised recommendation for

individuals within household

Near instantaneous playback without

requiring the content to be

downloaded first

Ultra View

Rich Metadata

User Profile & Personalised

Recommendations

Adaptive Bit Rate

Streaming

Unified look across big and small screens

Appendix

(RM mn) 1H FY18 1H FY19

EBITDA 1,011 750

Margin % 37% 28%

Depreciation and amortisation (329) (329)

EBIT 682 421

Margin % 25% 15%

Finance income 33 20

Finance cost (106) (178)

Share of post tax results from investments 0 1

PBT 609 264

Tax expense (171) (76)

Tax rate % 28% 29%

PAT 438 189

PATAMI 442 191

Margin % 16% 7%

Normalised PATAMI 430 225

Margin % 16% 8%

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)

1H FY19: (RM 34m), 1H FY18: RM 12m

due to revaluation of M3B transponder

lease liabilities

(3) Numbers may not add up due to

rounding differences

(2)

(1)

PAT reconciliation

23 | 2QFY19 results

(RM mn) FY18 1H FY19

Non-current assets 4,807 4,794

Property, plant and equipment 2,401 2,318

Other non-current assets 2,406 2,476

Current assets 2,041 1,925

Receivables and prepayments 1,012 742

Cash and bank balances(1) 962 1,090

Other current assets 67 93

6,848 6,719

(RM mn) FY18 1H FY19

Non-current liabilities 3,791 3,906

Payables 390 450

Borrowings 3,319 3,372

Other non-current liabilities 82 84

Current liabilities 2,404 2,139

Payables 1,653 1,390

Borrowings 646 738

Other current liabilities 105 11

Shareholders’ equity 653 674

6,848 6,719

Net debt / LTM EBITDA: 1.9x

NB

(1) Includes money market unit trusts


Balance sheet overview

24 | 2QFY19 results

1,677

615

307

909

607

2QFY19

Finance lease SFCL

Unrated MTN RM term loan

USD term loan

(RM mn)Total borrowings

Total borrowings of RM4,110mn is

net of debt issuance costs (RM5mn)

Debt profileUSD term

loan

RM term

loan

Finance lease

(primarily

satellite

transponders)

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

▪ First drawdown date 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 July 2018, total outstanding principal RM term loan stood at RM900mn.

▪ First drawdown date 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 RM675.0mn is 5.46% p.a. while

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

funds)

▪ Prepaid RM400 million on interest payment date of 20 August 2018

▪ Following the prepayment, the eleventh principal repayment become RM83mn scheduled to

be paid on 19 November 2018

▪ 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 for 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

25 | 2QFY19 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

Thank you

nd Quarter FY19 Results · STBs/ODUs are owned by Astro, and are capitalised ... 256 244 723 691...

Documents

Transcript of nd Quarter FY19 Results · STBs/ODUs are owned by Astro, and are capitalised ... 256 244 723 691...