independent news & media plc 2000 full year results 21st march, 2001 all figures in euros unless...

INDEPENDENT NEWS & MEDIA PLC2000 Full Year Results

21st March, 2001

All figures in Euros unless otherwise stated

• Strong performances in all markets

• Underlying circulations / readerships positive

• New €60m full-colour Irish production facility operational

• Successful integration of the Belfast Telegraph Group

• Chorus launches Ireland’s first Digital service

• iTouch exceeds 1st year targets, after successful IPO

• €1 bn 5-year syndicated facility over-subscribed

2000 HIGHLIGHTS

Turnover by ActivityPublishing 82%Electronic 9%Outdoor Advertising 9%

GROUP PROFILE

Europe8%

UK12%

Ireland24%

Board4%

USA25%

Sir Anthony O'Reilly

27%

Listing Information• Leading international media group with 5 main geographic markets • PLC listed on the Dublin, London and New Zealand Stock Exchanges• Market Capitalisation: €1.5 bn (IR£1.2 bn)• Shareholder Profile:

2000 FULL YEAR RESULTS

* Continuing activities before exceptionals** Before exceptional items and amortisation

(as restated)

2000 1999 Change€m €m %

Turnover 1,342.5 1,168.4 14.9%

Operating Profit * 224.1 187.4 19.6%

Profit Before Tax 155.3 137.7 12.8%

Net Profit 81.3 65.4 24.3%

EPS ** 16.01 14.49 10.5%

DPS 7.50 6.66 12.6%

Weighted shares outstanding (m) 514.4 505.8

Operating Margin * 16.3% 15.6%

HEADLINE NUMBERS

(as restated)

31 Dec. 2000 31 Dec. 1999€m €m

Fixed Assets * 2,584 2,092

Other Net Assets/ (Liabilities) 56 (16)

Net Debt (1,500) (868)

Total Shareholders' Funds 1,140 1,208

Interest Cover (EBITDA/ Interest) 3.7x 4.6x

Net Debt to EBITDA 5.7x 3.9x

* Including the revalued elements of mastheads

SUMMARY BALANCE SHEET

(as restated)

2000 1999 Change€m €m %

OPERATING PROFIT 204.8 185.6 10.3%

Share of Associates & JVs 10.8 (5.8) 286.2%

Depreciation & Amortisation 47.3 41.8 13.2%

EBITDA 262.9 221.6 18.6%

Working Capital Movements (19.3) (22.7) 15.0%

OPERATING CASH FLOW * 243.6 198.9 22.5%

Operating Cash Flow Conversion * 93% 90% 3.2%

* Excluding restructuring payments

SUMMARY CASH FLOWS

Turnover by Market -- 2000Total: €1,342.5m

GROUP TURNOVER BY MARKET

South Africa14%

Ireland25%

Australia24%

New Zealand21%

United Kingdom16%

GROUP PROFITS BY MARKET

Operating Profit by Market -- 2000Total: €224.1m

South Africa10%

Ireland29%

Australia31%

New Zealand24%

United Kingdom6%

7.027.58

8.88

5.36

4.15

10.20

12.68

14.49

16.01

12.28

4.00

5.50

7.00

8.50

10.00

11.50

13.00

14.50

16.00

'91 '92 '93 '94 '95 '96 '97 '98 '99 '00

10 Year C.A.G.R.• Turnover + 24%• Operating Profit * + 31%• Pre-Tax Profit + 36%• Earnings Per Share + 16%• Dividends Per Share + 16%

Earnings per Share (€)(Fully diluted before exceptionals & goodwill amortisation)

10 YEAR PERFORMANCE

* Excluding exceptional items

OPERATIONS REVIEW

1%

19%

18%

62%

Publishing Printing Radio New Media

• No. 1 newspaper publisherNew Zealand Herald 210,436 (+0.3%)57% national daily market shareReadership up 5.9% on last year

• No. 1 regional newspaper publisher8 paid for dailies/ 34 non-dailies

• No. 1 commercial / magazine printer

• No. 1 radio operator (66 stations)

• No. 1 security printer (web/ plastics)

• Turnover by Activity

€ millions 2000 1999 Change

Turnover 282.4 253.3 11.5%

EBITDA * 72.0 66.5 8.3%

Operating Profit * 55.4 49.9 11.0%

Operating Margin * 19.6% 19.7%* Excluding exceptional items

• Exceptionally strong Q1 - America’s Cup

• Increased market share & tight cost control

• Strong performance from Regional division

• 48% Radio share and 55% audience reach

• Trans-Tasman expansion of Security Printing

COMPANY PROFILE

2000 PERFORMANCE DRIVERS

NEW ZEALAND

• Economic indicators positive:- forecast economic growth for 2001 +2.5%- forecast inflation falling to +1.1%- forecast interest rates falling to 5.9%

• Herald to benefit from full year cover price increase and lower distribution costs

• Business Herald re-launch attracting new brand advertisers

• Newsprint prices / supply fixed for 2001

• Full year impact of Security Printing’s Australian acquisitions and potential to expand Asian export market

• Exports from regional New Zealand remain very buoyant

2001 PROSPECTS

Wilson & Horton

• Good revenue growth in 1st half & strong cost control in 2nd half

• Exceptional performance from outdoor - strong occupancies and yields

• Full year of Shared Services benefits

• Broad base of activities

• No. 1 regional publisher in Australia

Queensland and Northern NSW, comprising 14 paid dailies/ +50 non-dailies

• No. 1 outdoor advertising company

Supersites, transit, billboards and street furniture with 65% coverage

• No. 1 radio operator with 11 metro-politan stations with 4.5m listeners

• JV in Pan TV’s World Movies177,000 subscribers

• Turnover by Activity1%21%

36%

42%

Publishing Outdoor Radio New Media

AUSTRALIACOMPANY PROFILE

2000 PERFORMANCE DRIVERS

€ millions 2000 1999 Change

Turnover 325.1 275.7 17.9%

EBITDA * 87.0 75.0 16.0%

Operating Profit * 71.9 63.1 13.9%

Operating Margin * 22.1% 22.9%* Excluding exceptional items

• Economic indicators positive:- Forecast economic growth for 2001 +2.0%- Forecast inflation continuing at subdued levels of 3.0%- Forecast interest rates falling to 5.0%

• Forecast advertising industry growth rates for 2001:Publishing + 3%Broadcasting + 4%Outdoor + 5%

• Low Australian dollar boosting exports and Regional markets• Asian outdoor expansion to deliver immediate profits

APN News & Media

2001 PROSPECTS

• Good growth in circulation - ALL titles upCompetitors generally down

• Increasing readership market share (68%)• Increasing advertising market share

Display market share up to 41%Classified market share up to 50%

• Cost increases held at half the inflation rate• Conde Nast magazine JV above expectations

• No. 1 newspaper publisher / printerThe Star 163,746 (+0.6%)Saturday Star 135,936 (+0.3%)Sunday Independent 40,875 (+1.0%)Cape Argus 77,418 (+0.2%)Weekend Argus 108,474 (+0.2%)Cape Times 48,690(+0.2%)Daily News 65,476(+1.7%)Independent on Saturday 73,668(+0.8%)Sunday Tribune 108,339(+1.8%)

All other titles reported circulation increases

• Turnover by Activity

SOUTH AFRICACOMPANY PROFILE

1%11%

88%

Publishing Printing New Media

2000 PERFORMANCE DRIVERS

€ millions 2000 1999 Change

Turnover 189.1 177.3 6.7%

EBITDA * 28.7 26.6 7.9%

Operating Profit * 24.3 22.2 9.5%

Operating Margin * 12.9% 12.5%* Excluding exceptional items

• Economic indicators positive:- Forecast economic growth for 2001 +3.5%- Forecast inflation falling to +7.0%- Forecast interest rates falling marginally to 14.0%

• Forecast advertising industry growth rates for 2001:

- Newspapers + 8.5%

• Newsprint prices/ supply fixed for 2001

• On-going focus on extending strong circulation and advertising market positions

• Continued positive impact of reduced cost base following successful restructuring in 1999 and tight cost focus in 2000

Independent News & Media (SA)

2001 PROSPECTS

• NationalsHighest circulation level & market share

(9.6%) since 1997 Good growth in advertising (up 12%)New premises with significant cost savings

• RegionalsMargins at top-end of industryCirculation stabilised following market decline

• MagazinesAdvertising growth & market share maintained

• No. 4 quality broadsheet newspaper publisher

The Independent240,000Independent on Sunday 270,000

• No. 1 newspaper publisher in Northern Ireland

• No. 2 paid-for regional newspaper publisher in Greater London area

• No. 1 recruitment magazine publisher

• No. 1 educational courses publisher

• Turnover by Activity1%

10%

18%

14% 57%

Nationals Regionals MagazinesBelfast New Media

UNITED KINGDOMCOMPANY PROFILE

2000 PERFORMANCE DRIVERS

€ millions 2000 1999 Change

Turnover 210.0 151.6 38.5%

EBITDA * 16.1 (3.3)

Operating Profit * 12.4 (5.1)

Operating Margin * 5.9% -3.4%* Excluding exceptional items

1%15%

84%

Publishing Printing New Media

• Acquired from Trinity Mirror in August 2000 for STG£292m

• Earnings enhancing in 1st year

• No. 1 newspaper publisherBelfast Telegraph 112,000Sunday Life 95,000

• No. 1 contract printer2 Goss Metroliners (double-width)

• Turnover by Business Type

• Unique metropolitan franchise

• Excellent track recordProven management / editorial team

• Advertising growth despite overall UK slowdown

Strong recruitment advertising enabling significant yield increases

• Successful re-formatting of The Belfast Telegraph and Sunday Life

Halted decline in circulationEnabled cover price increase

• New product development

• Group editorial resource

• Enhanced printing resource

BELFAST TELEGRAPHCOMPANY PROFILE

FUTURE PROSPECTS

• Economic indicators positive:- Forecast economic growth for 2001 +2.0% to 2.5%- Forecast inflation falling to +2.4%- Forecast interest rates 5.75% and possibly lower

• Forecast newspaper advertising industry growth rates for 2001:- Nationals + 3.2%- Regionals + 1.0%

• Full year impact of Belfast Telegraph acquisition

• New centralised London operations and termination of out-sourced services

Independent News & Media (UK)

2001 PROSPECTS

23%1%

76%

Publishing Distribution New Media

• Growing circulation & readershipMarket share of 51% (including imports)

• Strong growth in advertisingRevenue up 19%

• Successful transition / implementation of €60m Citywest development

• No. 1 newspaper publisherIrish Independent 168,200The Star 95,171Evening Herald 101,200Sunday World 314,022Sunday Independent 308,600

• No. 1 regional newspaper publisher11 titles with weekly circulation of 107,499

• No. 1 newspaper / magazine wholesaler

• Turnover by Business Type

IRELAND€ millions 2000 1999 Change

Turnover 335.9 310.5 8.2%

EBITDA * 74.1 66.4 11.6%

Operating Profit * 66.4 59.4 11.8%

Operating Margin * 19.8% 19.1%* Excluding exceptional items

COMPANY PROFILE

2000 PERFORMANCE DRIVERS

• Economic indicators positive:- Forecast economic growth for 2001 +8.0%- Forecast inflation falling to +4.0%- Forecast interest rates 4.25%

• Successful commissioning / operation of €60m Citywest development with full benefits achieved

lower production headcountcolour out-sourcing eliminatedexplosive growth in colour volumes/ yieldreduction in newsprint usage

• Chorus - digital services roll-out

Independent News & Media (Ire)

2001 PROSPECTS

NEW MEDIA REVIEW

…becoming Ireland's first fully integrated digital TV/ Telecoms network operator

Ireland's 2nd largest cable/ TV transmission operator - jointly owned (50:50) by INM and Liberty Media (USA) - 264,000 subscribers (54% Cable/ 46% MDS) - 555,000 homes passed (60% of all homes in Ireland) - exclusive licence franchise areasLaunched Ireland's first Digital TV Service - Nov. 2000Launched first Digital TV MDS Service - worldwide - Nov. 2000

€ 360m syndicated loan secured August 2000, facilitating: - broadband, high-speed network build - full multi-media bundled Digital TV, Internet & telephonyNTL network: Roll-Out on holdCo-Owner with INM of Unison ISP

DETAILS

Chorus (Ire)

e-Hype

e-Basic• define strategic arenas• systems automation• cover downside

- manage classified migration

- enforce copyright/ regulatory

e-Xecution• brand extension @ marginal cost• marketing cross-promotion• limit cash investment (Ads for

Equity)

• strip away the Hype• don’t “bet the bank”• leverage content & marketing

€ Millions 2000 1999Turnover 7.7 0.4Operating Losses (10.0) (2.1)

Group Web Stats: No. of Web Sites 48 34 Page Impressions / month 100m 34m

Total Investment to DateValue of Quoted InvestmentHeadcount

€78m

€110m203

DIGITAL e-VOLUTION

business 2 business

mobile information

education / databases

broadband - digital TV - telephony

internet - portals

INDEPENDENT DIGITAL

news sitessportclassifiedentertainmentfinancialtravele-commerce

• Geographically diversified - with tight focus on core competencies

• Unique brand leadership positions - dominant in 4 out of 5 markets

• Highly cash generative business

• Clear strategy for operating margin enhancements

• All divisions performing well

• “Hype-Less” new media strategy

• Increasing value of our Irish cable / telephony business

SUMMARY

• Belfast Telegraph acquisition - EPS enhancing• Citywest development further enhancing Irish performance• Track record of unbeatable shareholder return

€1,000 invested in 1973

C.A.G.R.

+ 23%

SHAREHOLDER RETURN – Since 1973

SUMMARY

€336,000

• Core businesses performing well

• Too early for current year forecasts because of uncertainty in global markets

• Focus on cost containment

• Group well positioned for future growth

OUTLOOK

INDEPENDENT NEWS & MEDIA PLC