for personal use only - asx2013/06/06 · our print and digital resources in content and in sales...
TRANSCRIPT
Fairfax Media Limited | A.B.N. 15 008 663 161 | 1 Darling Island Road, Pyrmont, NSW, 2009 | www.fairfaxmedia.com.au
FAIRFAX MEDIA LIMITED INVESTOR DAY 2013
SYDNEY, 6 June, 2013: Fairfax Media Limited [ASX:FXJ] is holding an Investor Day in Sydney today. The event will be webcast (fxj.com.au to register) and the presentation pack is lodged with the ASX. Chief Executive Officer, Greg Hywood, will make the following introductory comments: Good morning everyone and welcome to the Fairfax Media Investor Day. It’s great to have so many of our investors with us here in Sydney today – and many more of you joining via webcast. I’d also like to welcome the many analysts that cover Fairfax. We have a full program today. You will hear from senior management from our newly created Australian Publishing Media division, from Fairfax Radio, Stayz and Domain. We are focused on delivering detail and transparency in relation to our activities. Throughout the day, we will be discussing what we are doing at Fairfax to lead the change in the media sector, to transform our business and deliver strong returns to shareholders. We’re leading the change because Fairfax is a media company that fully understands the complexity of the issues that we are facing. You’ve heard me say before that Fairfax will never be about using the profits of good businesses to cross-subsidise poor performing assets. We have been very clear that we will not produce unprofitable newspapers – and we stand by that. You will hear today that we are committed to delivering the transition of this company from a legacy print business to a media company that prospers in a competitive market. We are confronting reality; and we are taking the actions that we need to take to get through a period of transition, and implement a very different business model. We have done much good work. But we all know the transition is going to take some years. Today is about bringing you up to speed with where we are and where we are headed. This can be looked at in a series of stages. The first stage – which commenced a few years ago – started with the recognition that the changes that we were facing in our print businesses were predominantly structural, although they have been exacerbated by cyclical weakness. It was this recognition that prompted us to reshape as a truly multi-media business, bringing our print and digital resources in content and in sales together. This represented a revolution in the way we worked. By committing to the transition from print to digital we were able to put in place a program – the Fairfax of the Future program that we announced early last year, that will deliver $251 million in annualised savings by June 2015. What we are going to be talking to you about today is the next stage of our transition. What we are doing now is leading the change in the media sector by taking our multi-media, cross-platform business and simplifying it, making it lean and agile.
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So what are we doing to make our business “lean”? A fundamental initiative is the consolidation of our core publishing activities into our new Australian Publishing Media division. The formation of APM allows us to reduce duplication through a more ordered grouping of our businesses and activities, and to drive additional revenue by leveraging our core business – news, business media, lifestyle and community media. We are becoming more agile by breaking out our digital businesses into freestanding units that have the support, resources and – most importantly – the autonomy needed to deliver on their potential. Our presenters today will be talking in detail about the new structure, what it means for our operations, and how the structure empowers them to lead the change in the media sector. One important outcome of the restructure is that it will allow us to deliver an additional $60 million in savings by the end of September, this September, over and above the $251 million that we have previously set out. The savings will come from reducing duplication right across our business, but with an emphasis on minimising the impact on content and sales. We expect that the majority of the charges associated with implementing these changes will be accommodated within our existing provision. On top of the $60 million, we have commenced a product review – a step-by-step review of what we produce, what we do ourselves and what we can do differently – to deliver even more savings. This is a major exercise – Fairfax publishes 431 publications and 337 websites, we have 7 radio stations and almost 100 apps. We will provide an update on the progress of this review with the full-year result in August. However – before speculation runs rampant – let me make one thing clear. We do not have any intention to reduce the frequency of print publication of any of our major mastheads in the foreseeable future. Why? Because they are profitable. The additional $60 million announced today is net of inflators and therefore represents a direct benefit to earnings – albeit in a challenging environment. Ongoing cost management is now in our DNA. We understand that analysts currently expect a cost inflator of around 2.75% to apply to the fixed costs of our business over the longer term. As part of our cost transformation over the next three years we are seeking to variabilise as much of our cost base as possible, and one objective of this program is to reduce the cost inflator below inflation. Staff and on-costs comprise around half of Fairfax’s cost base, with paper and production costs and other fixed costs – such as rent – making up the remainder. Initiatives are underway in each of these areas to meet our objective of reducing the cost inflator. While cost reduction is very important – our future success is of course reliant on our ability to generate revenue. During the course of today you are going to hear about many of the revenue initiatives that are underway. Allen Williams, the Managing Director of our Australian Publishing Media division, will be outlining the domestic launch details of our new digital subscription arrangements, while
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Garry Linnell, Director of News Media, will explain how we’ve restructured our newsrooms to deliver timely content to our audiences across the day. Ed Harrison, our Group Sales Director, will be talking about revenue opportunities available through better use of data. Ed will talk about the investment we are making – in terms of both systems and human resources – to deliver advertisers greater insight into our audience, and more tailored, higher value, advertising opportunities. We can also see new revenue opportunities in Content Marketing – meaning greater use of our content in third party environments, including provision of content for third-party websites. You’ll also hear from our newly-appointed Director of Life Media, Melina Cruickshank, who will talk about how we’re monetising our extensive portfolio of lifestyle-related assets. We are leveraging our mastheads and powerful brands in the growing business of Events. Already we have $23 million of events-related revenue and we see opportunities to expand these activities further. Brett Clegg, Director of Business Media, will touch on the recent brand extensions that he has led in the business media portfolio. Adam Lang, Managing Director of Fairfax Radio Network, will provide an update on the performance turnaround that’s underway in our radio business. When it comes to digital transactions – Stayz and RSVP are both market-leading businesses generating strong margins, and you’ll hear from the Stayz General Manager, Anton Stanish later this morning. We have a proven track record of growing smaller digital businesses. In the future, we will continue to look at these businesses and new opportunities in terms of both value and earnings. Today, Tony Blamey and I will be providing a financial breakdown of our Domain division for the first time. You will see that we are a force to be reckoned with in the real estate advertising sector in this country – with exposure to more than $300 million of Real Estate-related revenue. We believe that we have the brand, the expertise and the commitment to really build this business – and we invite you to make your own judgments about Domain’s value and the opportunity ahead. A common theme in each of the presentations today will be that Fairfax has acted decisively as we have reshaped our operations – with the goal of developing a business model that is appropriate for the structural issues and market conditions that we face. We are committed to continue to make all necessary decisions to achieve this goal. Before I ask Allen Williams to discuss how the Australian Publishing Media division is leading the change, I will provide an update on current trading conditions. In a nutshell, conditions remain pretty tough. Consistent with previous advice – in the current half, up to the third week of May, overall group revenues are 9-10% lower than the previous corresponding period. Taking a look at our segments, which will update after our full-year results, Metro Media is tracking down 11%, Regional down 11% as a result of very difficult conditions in mining-related areas and Queensland, New Zealand is 4% behind, while Broadcasting is ahead more than 10%. Domain’s digital business is up 16%.
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We’re expecting to report a second half FY13 EBITDA in the range of $129-$135 million. I will now ask Allen Williams – who recently returned to Sydney to head up the Australian Publishing Media division after four years leading our New Zealand business – to provide some insights into the structure of his new division, and the revenue and cost initiatives that are currently underway.
– ENDS –
Contacts:
Brad Hatch Manager of Communications
+61 2 9282 2168
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9.30am Introduction & Commentary Greg Hywood
Australian Publishing Media – Advertising Sales – News Media – Life Media – Business Media
Allen Williams Ed Harrison Garry Linnell Melina Cruickshank Brett Clegg
Morning break
11.45am Fairfax Radio Network Adam Lang
The Stayz Group Anton Stanish
Domain Greg Hywood & Tony Blamey
Lunch break
1.20pm Q&A Greg Hywood David Housego Allen Williams
2.00pm Close
Agenda F
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Leading the change
• Fairfax is a leading multi-platform media business
• We have integrated our print and digital resources
• We are taking the necessary action to transition from a legacy print business to a media company that prospers in a competitive market
• We are simplifying our business, making it lean and agile
• Our Fairfax of the Future program has delivered $155 million of annualised savings to date, on track to deliver our target of $251 million by June 2015
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Organisational structure
Australian Publishing
Media
Australian Community
Media
News Media
Business Media Life Media
Business Planning & Analysis
Fairfax Radio
Fairfax New
Zealand
Domain
Digital Ventures
Corporate and
Support Services
Stayz RSVP Other
Product Development
Marketing
Sales
CEO and Managing Director Fairfax Media
+220 publications
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Additional cost savings
• Our organisational restructure has driven $60 million in savings (additional to the Fairfax of the Future target), which we expect to deliver by September 2013
• This now commits us to savings of $311 million by FY15
• A product review is expected to deliver even more savings
• We are variabilising our cost base with the objective to reduce the cost inflator below the inflation rate
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Presenters
Greg Hywood Chief Executive and Managing Director
Allen Williams Managing Director Australian Publishing Media
Ed Harrison Group Sales Director Australian Publishing Media
Garry Linnell Director, News Media Australian Publishing Media
Melina Cruickshank Director, Life Media Australian Publishing Media
Brett Clegg Director, Business Media Australian Publishing Media
Anton Stanish General Manager The Stayz Group
Adam Lang Managing Director Fairfax Radio Network
Tony Blamey General Manager Domain
David Housego Chief Financial Officer
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Current trading
• Consistent with our previous guidance, in the current half overall group revenues continue to run at 9-10% down against last year
• Across our current reporting segments, Metro Media and Regionals are down around 11%, New Zealand is down 4%, and Broadcasting is running at about 10% above last year
• Domain’s digital business is up 16%
• We are expecting to report a second half FY13 EBITDA in the range of $129 million to $135 million
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Our new combined Australian publishing division
Australian Publishing Media consists of:
– News Media, Business Media and Life Media includes metro newspapers, online news sites, classifieds (excluding Domain) that were previously part of the former Metro Media division and the former Financial Review Group
– Australian Community Media includes all regional, agricultural and NSW community mastheads
Australian Publishing Media
Australian Community
Media
News Media
Business Media
Life Media
Sales, Marketing, Product Development, Business Planning & Analysis
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Leading the change
• Structuring for revenue and efficiency gains: - Simpler, integrated structure - Lower costs and greater efficiency - Product review
• Strong metro print presence and digital innovation:
- Focus on growing online audiences - Print yield growth and managed circulation decline - Digital subscriptions for The Sydney Morning Herald
and The Age to be introduced on 2 July 2013
• Leveraging local reach in Australian Community Media: - Extending digital presence - Lower costs and greater efficiency - New revenue streams from local relationships
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Product review to focus on high-impact opportunities
Product review assessment criteria
Core
Size
Profitability
Growth
• Strong alignment to our core mastheads • Leading audience and traffic position versus competitors
• Contributes substantially to group revenues and/or fixed cost absorption
• Contributes substantially to overall group profits • Operates with high profit margins to ensure adequate capital returns
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-
-
Metro circulation strategy
Weekly circulation revenue (% change versus same month in previous year)
Weekly yield per copy (% change versus same month in previous year)
Weekly circulation volume (% change versus same month in previous year)
-25 -20 -15 -10
-5 0
Apr 12
Aug 12
Dec 11
Aug 11
Dec 12
Apr 13
-10 0
10 20 30 40 50
Apr 13
Dec 12
Aug 12
Apr 12
Dec 11
Aug 11
Apr 13
Dec 12
Aug 12
Apr 12
Dec 11
Aug 11
SMH The Age
• Removal of low-value print circulation resulting in reduced print volumes, higher yield and circulation revenue growth
• Fairfax held readership share versus News Ltd
15
10
5
0
-5
-10
-15
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Digital subscriptions for SMH and The Age • Successful international test launch in March 2013
• Domestic metered model active from 2 July 2013 for:
– Website (desktop, tablet browser, smartphone):
• 30 free articles per month
• Deliberately porous
• Meter applies to articles only
• Meter does not apply to other assets including Daily Life , Good Food, Essential Baby,
Essential Kids, Brisbane Times, Canberra Times, WA Today, Domain and Drive – iPad and Android apps:
- Freemium model
- Free sections include Front Page, Editor's Choice, Daily Life, Good Food, Photos, Videos,
Domain and Drive
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Pricing and bundling
$15
$21.99
Bundles
+ $25 +
$25 + + +
+ $44 + +
1 Web-only – desktop and m-site
Standalone app
All digital
Digital + Weekend
Digital + Full Week
2
3
4
5
Products Monthly price
+
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Web user journey F
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Comparison of Fairfax’s meter configuration
Unrestricted access
Registration benefit
Meter limit
Pricing
Website access
All digital
+ Sunday print
Weekend print
+ 7-day Print
Launch
20
DT:60, HS:40
DT:80, HS:60
Weekly
–
$17.30
$19.50
$23.80
$39
16 May 2013
30
Personalisation
SMH & AGE:30
Monthly
$15
$25
N/A
$25
$44
2 July 2013
• Flexibility to adjust meter to drive registration and paid digital subscriptions
• At 30 articles, only heaviest of users reach the meter limit
• Monthly most common digital pricing cycle and easier for subscribers
• Entry-level price more friendly for web-natives
• All-digital price premium reflects value consumers place on SMH/The Age iPad apps
• Not offered initially to reduce complexity of bundles
• Offered at existing print package price
• Offered at existing print package price
The Daily Telegraph & Herald Sun
The Sydney Morning Herald & The Age
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Large digital audience across SMH and The Age
Desktop Tablet Mobile
3.7 million unduplicated
unique audience1
1.2 million tablet downloads2
456 thousand average daily
unique browsers3
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530
Core regional/agricultural markets contribute 83% of revenue
FY12 regional/agricultural revenue ranked by size (A$m)
• Newcastle and Illawarra contribute just 17% of combined regional and agricultural revenue • Our traditional regional and agricultural publishing titles remain more defensive
Newcastle & Illawarra
Total FY12 Revenue
75 Smaller Markets
50 Middle Markets
Top 28 Markets
89 17%
Other
11 2%
309 58%
89 17%
32 6%
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Local businesses underpin regional revenue
Regional advertising revenue by type FY09 - H1 FY13 (% of total)
14% 14% 15% 14% 13%
5% 5% 5% 5% 5%
11%
FY12 FY11 H1 FY13
100%
FY09
14%
FY10
13%
10%
13%
11%
43%
16%
13%
8%
0%
40%
16%
1%
41%
15%
2%
40%
15%
3%
40%
14%
13%
11%
3%
Employment
Motors
Real Estate
General Classifieds
National
Local/Retail
Digital
• Advertising contributes about 76% of total regional revenue with local/retail the biggest category
• Local sales presence in key regional markets
• Weaker employment advertising revenue in all regional markets year-to-date, with the decline 50% higher than the average in markets with mining-related activity
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Regional/agricultural circulation strategy • Managed print circulation reduction in three daily titles (Illawarra, Maitland, Launceston) • Pursuing higher yield strategy across the majority of markets
Circulation revenue FY13 YTD (% change versus comparable period)
Average yield per copy FY13 YTD (% change versus comparable period)
Average circulation volume FY13 YTD (% change versus comparable period)
Reg
iona
l Ag
s.
Dailies (15) 3.3% Tri-Weeklies (16) 6.0% Bi-Weeklies (20) 4.7% Weeklies (50) 1.6% Weeklies (6) 3.0% Monthlies (4) 0.2%
Dailies (15) -7.3% Tri-Weeklies (16) -7.5% Bi-Weeklies (20) -5.5% Weeklies (50) -4.7% Weeklies (6) -4.2% Monthlies (4) -5.2%
Reg
iona
l A
gs.
Dailies (15) -4.2%
Tri-Weeklies (16) -1.9%
Bi-Weeklies (20) -1.1%
Weeklies (50) -3.2%
Weeklies (6) -1.3%
Monthlies (4) -5.1%
Reg
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Digital growth opportunities in Australian Community Media
Increased digital footprint and audience
• More than 2 million UBs and 25 million page impressions in April 2013
• 50% increase in page views per visit since October 2012
Digital-focused editorial
• Approximately 60 FTE digital journalists embedded in local newsrooms
• Implementing multi-platform approach by all editorial staff
Partnering with Domain • Align with Domain national strategy to
grow online audience • Local specialist digital Domain sales staff
work collaboratively with print staff
Upside for SME digital services
• Exploring a range of opportunities for small to medium enterprises e.g. marketing services
• Leveraging our local sales network and relationships
Source Nielsen
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Leading the change
• Strong innovation and performance in challenging market: - Leading sales team - Success in winning revenue market share - Capability in digital ad development
• Responding to advertising trends and advertiser demands: - Solution selling across platforms and products - Integrating advertisers with unique tailored
content - Increasing yields through data and technology - Delivering innovative advertising on mobile
and tablet
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We have the leading media sales team Media Insights: ranking of sales representation1
• No.1 in newspapers • No.2 in digital (behind Microsoft)
AdNews Media Benchmarks by Roy Morgan2
• Winner ‘Media Company of the Year’ • No.1 in professionalism • No.1 in leadership • No.2 in innovation (behind Google)
Source: 1) Media i, Nov 2012, 1,209 media agency professionals; 2) Roy Morgan, May 2013, 1,277 respondents, media agency professionals and marketeers
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Strong revenue market share performance against News Ltd
45%
48% 47%
44%
47% 47% 47%
44%
42%
47% 47%
45% 46%
43%
46% 45%
44% 45% 44%
40% 40%
44%
46%
42%
35%
37%
39%
41%
43%
45%
47%
49%
51%
53%
55%
May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr
May 12-Apr 13
May 11-Apr 12
Rel
ativ
e M
arke
t Sha
re
Source: SMI, April 2013. Includes metro Sydney and Melbourne newspapers, NIMs and digital
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0
100
200
300
400
500
600
700
800
900
0
20
40
60
80
100
120
2009 2010 2011 2012
Re
ven
ue
for
Tota
l Dig
ital
Dis
pla
y M
arke
t ($
m)
Rev
enu
e b
y N
etw
ork
($m
)
Fairfax Media News Limited Mi9 Yahoo!7 MCN Total Digital Display Ad Market
Fairfax achieves digital growth against competitors
Source: SMI, April 2013
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Ad product innovation and investment drives digital success
- Standard Display
- Direct Response ad platform (DRx)
- Behavioural Targeting
- Custom
- Video pre roll - Smartphone - Tablet - eDM
Establish Custom Solutions team
Reject ad networks, builds DR in-house
Enhances DR with third party inventory
Launch video & lead adoption of standards
Tablet launch with strong advertiser support
Fast follower of Yahoo!7 in ‘targeting’
Fairf
ax d
igita
l rev
enue
s ($
m)
FY07 FY08 FY09 FY10 FY11 FY12 FY13E
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Fairfax’s sales team is ready for the future 1. Creating a centralised national sales team
2. Improving sales capability through new partnerships
3. Delivering integrated advertising solutions across all platforms
4. Optimising the use of data
5. Innovating in mobile and tablet
6. Leveraging the new newspaper audience measurement methodology
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New centralised sales team brings efficiency and broadens capability in cross-platform selling
Plus: increased use of outsourcing to drive further efficiency, acquire new capabilities and improve customer service (e.g. TeleTech/Revana) F
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Fairfax is delivering integrated solutions
Technology
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Fairfax is delivering integrated solutions
Content
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Fairfax is delivering integrated solutions
Events & Awards
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Fairfax is securing yield growth from use of data
• Current use of data-driven advertising: – Online subscription and behavioural data – Packages of targeted audiences – Driving yields higher
• The next phase: – Investment in data systems and capabilities – Creation of a single view of customer through:
• Newspaper subscription data • Advertising interaction data • Content consumption data • Option to leverage third-party data
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Partnering with ad customers in mobile and tablet F
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New industry-wide measurement methodology will give newspaper advertisers better data and define engagement
Dynamic Faster delivery of data
More frequent data releases
Rich Detailed sectional readership by brand
Sophisticated engagement metrics
Broad Comprehensive coverage of Fairfax mastheads
Captures audiences across print, web, mobile and tablet platforms Credible Move to online surveys
Industry-standard measures for cross-platform data
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Leading the change
• Producing unique, compelling content and setting the news agenda
• Restructuring newsrooms to digital-facing and audience-led operations
• Greater sharing, variabilising costs, avoiding duplication
• Moving SMH and The Age to compact size
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“Once something has been observed, nearly everyone says approximately the same thing...
I believe the news industry is finding that it will not be able to
sustain producing highly similar articles.”
– Krishna Bharat, creator of Google News
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Quality and quantity
Kate McClymont
In 2012/13, The Sydney Morning Herald and The Age won seven Walkley awards and seven Quill awards, including
the Grant Hattam prize for investigative journalism
Nick McKenzie and Richard Baker
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Leading the news agenda F
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Our newsrooms operate 24x7, following the sun, and aligned to audience needs
5:00am 11:00am 1:00pm 7:00am 3:00pm 9:00pm 3:00am 1:00am 11:00pm 9:00am 5:00pm 7:00pm
New
sdes
k To
pic
plan
ning
Pr
int
plat
form
s
6:30am: Newsdesk briefing
– AM News Directors plan for
morning peak online
11:30am (Tuesdays) All-in weekly
meeting. Week ahead planned out
3pm: Newsdesk
briefing (National)
Health check on progress
3:15pm: Newsdesk
briefing (Local). Health check on
progress
9:30pm: Newsdesk briefing. Plan 2nd Edition if
required. Prepare for next day handover
9:30am: Newsdesk briefing
(National) Daily top stories
discussed
10am: Newsdesk
briefing (local) Local top stories
discussed
6am: AM News Director starts & calls in Topic Editors if
required for breaking news
9am: Topic Editors begin day and prepare for
briefing
2pm (Mondays): Topic Editors hold
weekly topic meetings with teams
5pm: Topic Editor planning the
next day coverage
Dig
ital
plat
form
s
9am: Print Platform Editors arrive & prepare for
briefing
10:45am: Print layout
meeting. Early page planning
4pm: Print layout meeting. Page 1 and page 3
drafted
5pm: Paper production takes precedence
7pm: Produc ion and copy fit continues for print
9pm: First edition off
10:30pm: 2nd Edition off
11pm: WA steps in for
overnight production and breaking news
3am-5am: Overnight newsdesk
until morning shift begins
5:00am 11:00am 1:00pm 7:00am 3:00pm 9:00pm 3:00am 1:00am 11:00pm 9:00am 5:00pm 7:00pm
5am: Homepage Editor & Breaking News
Reporters start & update tablet for 6am
8am: Website updated for morning
peak. Social media and audience analytics monitor trends
12pm: Midday peak has been
planned and website updated. Afternoon ‘reads’ being
developed
3pm: Tablet uploaded for
evening peak
12pm: Web and Tablet
upload (may cease over time)
1pm (Tue) 11:30am (Thurs): Weekend planning
meeting
Audi
ence
Fi
rst
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Magazine editors
Vertical general managers
(food, travel)
National editor WAtoday Brisbane Times
SMH EIC (al l platforms)
AGE EIC (al l platforms)
Canberra Times EIC
(al l platforms)
Sunday Age editor
Tablet editor Age (M-F) editor
News director
Deputy news directors
Online editor
Mobi le edi tor Social media edi tor
Homepage editors
LOCAL TOPIC EDITORS
Reporters (cross ti tles and platform)
Illustrative Local EIC Model (Melbourne)
National photo editor
National video editor
National graphics design
editor
National head of production
Local photo editors
Local video editors
Pooled photographers
Pooled videographers
Deputy production
editors
Pooled producers
Pooled graphics artists
Pooled Presentation Pooled Production
Production
NATIONAL TOPIC EDITORS
Saturday Age editor
Presentation
Newsroom structure Austral ian
Publishing CEO
News media director
Social media edi tor
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How our journalists are building digital audiences around news and events throughout the day
Engaging with digital audiences F
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Delivering significant jump in digital-first publishing About 25 per cent more articles are being published on digital platforms first intra-day compared with the newsroom under the old large-print/smaller-digital operating structure
Average daily articles published by time of day Pre versus post ‘digital first’
This includes all stories published online excluding wires For
per
sona
l use
onl
y
46 46
Social media: audience engagement and growth
Twitter growth Facebook growth
For
per
sona
l use
onl
y
47 47
Online – the competitive market
Source: Nielsen Market Intelligence: Australia (May 2012 - April 2013) Average Daily Unique Browsers.
0
100
200
300
400
500
600
700
May 2012
Jun 2012
Jul 2012
Aug 2012
Sep 2012
Oct 2012
Nov 2012
Dec 2012
Jan 2013
Feb 2013
Mar 2013
Apr 2013
Uni
que
Bro
wse
rs ('
000s
)
Average Daily UBs (28 day rolling average)
smh.com.au
ninemsn 9 NE S
news.com.au
theage.com.au
Yahoo!7 News
theaustralian.com.au
brisbanetimes.com.au
WAtoday.com.au
canberratimes.com.au
News
For
per
sona
l use
onl
y
48 48
Mobile leadership
0
50
100
150
200
250
300
May 2012
Jun 2012
Jul 2012
Aug 2012
Sept 2012
Oct 2012
Nov 2012
Dec 2012
Jan 2013
Feb 2013
Mar 2013
Apr 2013
Aver
age
Uni
que
Mob
ile B
row
sers
('00
0s)
Average Unique Mobile Browsers (May 2012-April 2013)
The Sydney Morning Herald
News.com.au
The Age
Herald Sun
The Telegraph
Source: Nielsen Market Intelligence: Australia - Mobile Content Total Traffic (May 2012 - April 2013) Average Daily Unique Browsers
For
per
sona
l use
onl
y
49 49
SMH/The Age content sharing F
or p
erso
nal u
se o
nly
50 50
Quality compact F
or p
erso
nal u
se o
nly
For
per
sona
l use
onl
y
52 52
Life Media sites reach 5.4 million unique users per month
For
per
sona
l use
onl
y
53 53
And 1.1 million print readers per week F
or p
erso
nal u
se o
nly
54 54
High-quality contributors across 9 brands F
or p
erso
nal u
se o
nly
55 55
Key lifestyle category leadership
#1 parenting publisher
#1 women’s site
#2 fashion website
#2 travel publisher
#4 food website
For
per
sona
l use
onl
y
56 56
Fairfax’s new lifestyle and opinion site
For
per
sona
l use
onl
y
57 57
Daily Life is now Australia’s fastest growing site for women Monthly unique Audience (000’s)
1,000
900
800
700
600
500
400
300
0
100
200
Sep 2012
Aug 2012
Jul 2012
Jun 2012
May 2012
Apr 2012
Mar 2012
Nov 2012
Dec 2012
Jan 2013
Feb 2013
Mar 2013
Apr 2013
Oct 2012
For
per
sona
l use
onl
y
58 58
Category leader in parenting
For
per
sona
l use
onl
y
59 59
Fairfax has continued to grow membership
150,000
200,000
250,000
300,000
0
100,000
50,000
2009 2008 2010 2013 2011 2012
Membership base
For
per
sona
l use
onl
y
60 60
Essential Baby has evolved as a business
FY08 FY09 FY10 FY11 FY12 FY13
$
REVENUE EBITDA
Revenue CAGR: 37% EBITDA CAGR: 48%
Acquired
Acquired
Launched
For
per
sona
l use
onl
y
61 61
Essential Parenting is consistently the market leader across the Parenting Network
Monthly Unique Audience (000’s)
Source: Nielsen Online Ratings – April 2013
900
1,000
800
700
500
400
300
200
100
0
600
Apr 2012
Jun 2012
Oct 2011
Oct 2012
Aug 2012
Dec 2011
Feb 2012
Feb 2013
Apr 2013
Dec 2012
Fairfax Parenting Network Kids Spot
Baby Centre
Baby Hub
For
per
sona
l use
onl
y
62 62
Is a leading fashion and music site
For
per
sona
l use
onl
y
63 63
The Vine is a leading fashion and music site in Australia Monthly Unique Audience (000’s)
Source: Nielsen Online Ratings – April 2013
100
200
0
600
400
500
300
Oct 2012
Aug 2012
Jun 2012
Dec 2012
Oct 2011
Apr 2013
Dec 2011
Feb 2012
Apr 2012
Feb 2013
For
per
sona
l use
onl
y
64 64
With outstanding audience engagement
Monthly Page Audience (000’s)
Source: Nielsen Online Market Intelligence
8,000
12,000
0
6,000
4,000
18,000
16,000
14,000
10,000
2,000
Mar 13
Jan 13
Feb 13
Apr 13
Jan 12
Apr 12
Feb 12
Mar 12
May 12
Jun 12
Jul 12
Aug 12
Sep 12
Oct 12
Nov 12
Dec 12 F
or p
erso
nal u
se o
nly
For
per
sona
l use
onl
y
66 66
Business Media portfolio
Premium Finance Wealth and General Business
Content strengths: business, finance, markets, economy, management, politics,
policy, arts, culture, travel and lifestyle
Content strengths: Investment advice, personal finance, business,
entrepreneurship/leadership and technology
Content and data strengths: category specific, national reach and cross-platform
offering
Decision makers (government and business), c-suite,
institutional investors, high net worth individuals and senior
management
Commercial Real Estate and Employment
Competent to sophisticated investors, self-managed super fund trustees, retirees, aspirationals and
small business operators
Industry specialists, professional advisers, property and career seekers
Business Media consolidates business audiences and platforms of the former Financial Review Group and business-related areas of the former Metro Media and Marketplaces divisions
For
per
sona
l use
onl
y
67 67
Leading the change • Meeting audience demand:
- Digital-first newsroom - Increased number of digital products and platforms
• Centralised sales and product focus:
- Integrated advertising solutions - Highly responsive sales culture and innovation - Brand extension to diversify revenues and capture
new audiences: - Events and conferences - Broadcast
• Print to digital:
- Driving digital subscriptions - Product development and innovation - Variabilising and reducing costs
For
per
sona
l use
onl
y
68 68
Transformation 2012-2013
Source: * Nielsen Online Ratings, April 2013. For afr.com only; ** Google Analytics, April 2013, for afr.com and m-site
For
per
sona
l use
onl
y
69 69
Digital advertising revenue
Former Financial Review Group digital advertising revenue performance YoY (% change)
The momentum in digital is gaining pace
• More ad inventory options to leverage a doubling in the number of ad clients on afr.com
• Prudent yield management to protect premium pricing
• New products, in particular iPad apps for AFR, BRW and Smart Investor
• Expanded online only editorial offering for premium brands and columns including Street Talk, Markets Today, Digital Life and Chanticleer
• Increased video content including First Person series and digital rights to Financial Review Sunday (a joint venture television show with the Nine Network)
-10.3 16.7 19.9
73.0
FY10 FY11 FY12 FY13 (YTD)
Note: Charts represent digital trends only
For
per
sona
l use
onl
y
70 70
Award winning quality journalism
Walkley Awards For Journalistic Excellence • Newspaper Feature Writing • Daily Life/Feature Photography Citi Journalism Awards • Top Award for Excellence and General Business Category • Winner Financial Markets Category • Winner Personal Finance Category
Microsoft IT Journalism Awards • Gold Lizzie for Best Journalist, Best News Journalist
and Best Technology • Industry Journalist • Best Telecommunications Journalist • Best Business Coverage
Universities Australia Higher Education Media Awards • Higher Education Journalist of the Year
Published in AFR Weekend, Dec 8-9, 2012
Published in AFR Weekend February 11-12, 2012
For
per
sona
l use
onl
y
71 71
Advertising market share gains
The Financial Review’s share of SMI revenue vs. key competitor, The Australian, increased 12% points in April 2013 to 57% (its highest monthly SMI revenue share in four years) • Total newspaper revenue for SMI agencies fell 20%
YoY in April 2013 but the Financial Review bucked the trend and showed strong gains of 61% despite tough market conditions
• Monthly unique browsers to afr.com were 853,343 in April 2013, an 80% increase YoY
• Engagement continues to rise as afr.com recorded its ninth consecutive page views increase in April 2013. The site had the highest page views in the competitive set, with 2.9 million in April 2013, an increase of 21% YoY
Financial Review versus The Australian
% share SMI Revenue April 2013 versus April 2012
Source: SMI. April 2012, April 2013; Competitive set includes The Australian and Business Spectator websites; Nielsen April 2013, Google Analytics
For
per
sona
l use
onl
y
72 72
Driving digital subscriptions Changes in reader habits and the fragmentation of media consumption has made digital subscription revenue a key focus. We’re improving our products, pricing and distribution
PRODUCTS
• AFR iPad launched May 2012 • BRW iPad app and redesigned website launched February 2013 • AFR mobile site relaunched April 2013 • Smart Investor iPad app and revamped website to launch 27 June 2013 • AFR Android app to launch in Q1/Q2 FY14
PRICING
• Digital access for desktop, mobile and tablet included in print subscription. • New corporate rate card introduces a unique ‘digital pass’ product that gives
unlimited access to AFR, BRW and Smart Investor for a single price • New retail offer gives 50% discount ($28.30 per month) to new digital subscribers
who agree to a 12 month contract. Terms and conditions similar to telco or Pay TV agreements which offer sharp discount but apply penalties for early exit
DISTRIBUTION
• AFR and BRW digital subscriptions launched in Qantas Frequent Flyer
store in March 2013 • Qantas Loyalty store makes payments to Business Media for subscriptions
redeemed for reward points (approximately 8 million Australians are members of Qantas Frequent Flyer program)
For
per
sona
l use
onl
y
73 73
0
5
10
15
20
25
30
Jan 10
Mar 10
May 10
Jul 10
Sep 10
Nov 10
Jan 11
Mar 11
May 11
Jul 11
Sep 11
Nov 11
Jan 12
Mar 12
May 12
Jul 12
Sep 12
Nov 12
Jan 13
Mar 13
May 13
Thou
sand
s
April 2013: AFR m-site re-launch
Digital subscription revenue As print circulation continues to decline (~7% YoY), expanding the base of digital subscriptions has been critical in maintaining revenues
The strategic decision to lower the digital only price point for subscription by almost half and to include digital access with print subscriptions in FY12 has meant a short term sacrifice in ARPU but has allowed an expansion in paid audience that will provide a more secure platform for the future
Dec 2011: Price reduction Digital subscription price reduced. Print subscribers rewarded with digital access.
May 2012: AFR iPad app launch
Financial Review paid digital subscriptions
26,707 Paid digital subscribers up 52% YoY (May 2013)
Note: Paid subscriptions include all print and digital bundles and digital only subscriptions held directly with Fairfax
For
per
sona
l use
onl
y
74 74
Commercial Real Estate
• Commercial Real Estate is a major advertising category for Fairfax worth ~$35m
• The new Business Media structure brings together the category for the first time and represents a key opportunity to strengthen our position against online market leader Real Commercial (REA Group)
• Fairfax has moved to create a fully integrated online listings, print advertising and data offering to the industry
BENEFITS
• A fully integrated offering across platforms
• National presence and premium audience
• Single point of contact for sales
• Leading value for online listings
For
per
sona
l use
onl
y
75 75
Employment Fairfax Employment Network (FEN) allows advertisers to execute innovative high-impact recruitment campaigns across more than 280 Fairfax-owned and partner websites
Advertising solutions across all platforms
National presence and premium audiences
Single point of contact for sales
For
per
sona
l use
onl
y
76 76
Brand extensions
• Editorially led
• Direct audience connection
• Strong brand affiliation
• Custom advertiser solution
• Multi-platform presence
For
per
sona
l use
onl
y
77 77
Events and broadcast
Benefit Events Broadcast
Drives incremental advertising revenue
• Sold as integrated package which helps underpin print and digital spend
• Captures share of clients’ TV ad budgets
Develops different dimension for brand awareness
• Effective in securing earned media
• Branded programs deliver equivalent value to television marketing campaign
Widens engagement touch point for audiences
• High engagement from face to face event
• Creates valuable content for print, digital and video
• Strengthens relationship with consumer
• Additional platform for ad sales
Develops capability within business beyond traditional editorial and sales competencies
• Revenue stream from ticket sales
• Assists in developing partnership model in advertising
• Catalyst for developing key multimedia and online video capability in editorial
For
per
sona
l use
onl
y
For
per
sona
l use
onl
y
For
per
sona
l use
onl
y
80 80
Leading the change
• Aiming to be the No. 1 information and entertainment radio network in Australia
• Ensuring our stations function at their highest potential
• Leveraging the power of our radio network
• Plugging into Fairfax Media
• Driving engagement with employees, audiences and advertisers
• Strengthening our future
– Digital Radio For
per
sona
l use
onl
y
81 81
Fairfax Radio’s share of Metropolitan Commercial Radio Advertising Revenue
Market share growth reflects new strategy
Note: FRN revenue for 4 cap cities vs CRA Advertising revenue for 5 cap cities Source: Deloitte, Fairfax Radio Network supplied number to Deloitte, excludes regional, commissions, production and syndication
13.0%
13.5%
14.0%
14.5%
15.0%
15.5%
16.0%
Jun 09 Dec 09 Jun 10 Dec 10 Jun 11 Dec 11 Jun 12 Dec 12
New strategy implemented
For
per
sona
l use
onl
y
82 82
Radio holds market share in the face of change • In the past decade advertising has been shifting from traditional media to online, but radio’s
share of total advertising has been relatively stable (from 9% in 2002 to 8% in 2012) • Radio’s share of total advertising spend (8%) is well below its share of consumer time
spent on media (19%)
$7.7 billion $12.4 billion
Total Australian Advertising 2002 Total Australian Advertising 2012
Source: CEASA, IAB, Citi Research. Note – total advertising excludes classified directories
For
per
sona
l use
onl
y
83 83
Powerful network of stations F
or p
erso
nal u
se o
nly
84 84
Environments are key F
or p
erso
nal u
se o
nly
85 85
Plugging into Fairfax • Leveraging Fairfax’s online and print content, journalism and audiences
- ‘A Sydney Morning’ with Paul Murray broadcasts on 2UE 954 from The Sydney Morning Herald’s newsroom from 8:30-11:30am Monday-Friday
• Cross-platform advertising campaigns across radio, online and print
For
per
sona
l use
onl
y
86 86
35-44 45-54 55-64
‘The Influencers’ • Fairfax Radio targets a powerful group – ‘The Influencers’ – aged 35 to 64 with
highly-relevant, quality content and advertising • More than 8 million Australians are aged 35 to 64 • This demographic accounts for 56 cents of every dollar spent in Australia • Our broadcast talent spans our target demographic
Content and Advertising
Source: ABS
For
per
sona
l use
onl
y
87 87
Radio is a long-standing social medium
Online Mobile Facebook Twitter For
per
sona
l use
onl
y
88 88
Talk and music for ‘The Influencers’
• Fairfax Radio outperforms in ‘The Influencers’ demographic of Australians aged 35 to 64 • Fairfax Radio has great talent and content to grow audiences in our target demographic
2
4
6
8
10
12
14
16
18
Rat
ings
sha
re %
Ratings surveys
2UE 10+
2UE 35-64
3AW 10+
3AW 35-64
4BC 10+
4BC 35-64
6PR 10+
6PR 35-64 2
4
6
8
10
12
14
16
18
Rat
ings
sha
re
Ratings surveys
96fm 10+
96fm 35-64
MAGIC 10+
MAGIC 35-64
4BH 10+
4BH 35-64
News/Talk stations Music stations
Source: Nielsen Radio Advisor, Monday to Sunday, 5:30am to midnight (station share 10+ demographic and 35-64 demographic)
For
per
sona
l use
onl
y
89 89
Strengthening our future
• Fairfax Radio is implementing a clearly defined strategy • We are pursuing excellence in our broadcasting • We are gaining advertising market share • We see opportunity to capitalise on the transition to Digital Radio
For
per
sona
l use
onl
y
For
per
sona
l use
onl
y
91 91
Our vision
Market-leading: • Performance • Products • Support
www.stayz.com.au/58877 “Dreamers Eco Apartments” Mt Beauty, VIC
We have created a new way for holiday house owners to make money from what was previously a passive asset
To be at the heart of every holiday rental experience
For
per
sona
l use
onl
y
92 92
2.4 million Website visits per month
Our background
Key facts1
Stayz humble beginnings in the shed of an entrepreneurial
holiday rental owner
Stayz acquired by Fairfax Media, giving Stayz the
strength to leverage the #1 Media Network in Australia
Stayz Group formed, following acquisition of
RentAHome and TakeABreak, solidifying us
as the #1 holiday rental group in Australia
Acquired YesBookIt, offering the leading office management solution for Holiday Rental property
agents
Key milestones
1.4 million Online Newsletter subscribers
2005 2001-2002 2011 2012
4.5 million Holiday enquiries
Source: 1) Fairfax April 2013. 2) Hitwise April 2013. 3) Fairfax 2012
1 2 3
For
per
sona
l use
onl
y
93 93
Our core offering
For Guests For Property Owners
For
per
sona
l use
onl
y
94 94
Our listings
The Stayz Group has circa 48,000 unique listings across three consumer portals
For
per
sona
l use
onl
y
95 95
The Holiday Rentals industry ecosystem
Guests
Aggregators, MetaSearch
Portals
Distributor
Channel Managers
PMS, Hubs
Owners/ Agents of
Homes
Serviced Apartments
Consumers
Google Places
Agents
ATDW
Trip- Advisor
Reservation Manager,
BookNow
Stayz Airbnb Home Away
R T O Wotif
Source: Fairfax – indicative and simplified, key online participants only
Bookitnow
Owners
R T O
Hubs, Trust Accounts
YesBookIt
Channel Managers
TAB RAH
For
per
sona
l use
onl
y
96 96
The Australian accommodation market
AU accommodation market1
$12 billion in 2012
AU online accommodation market $3.1 billion in 2012
Accommodation market size1 2012F, Australia, in AU$ TTV
Accommodation market trend1
2005-2015, Australia, in billion AU$ TTV
2005
2006
2007
2008
2009
2010
2013
F
2014
F
2015
F
9.2
Total
Online
Offline
9.9 10.5
11.0 10.9 11.3 11.6 12.0 12.4
12.9 13.4
08-12
2%
-2%
12-15
20%
4%
1%
11%
CAGR
Source: 1) 2005-2010 Euromonitor International from official sources, 2011-2015 Euromonitor International Estimates. Includes campsites, chalets, guest houses, hostels, hotels, motels, private accommodation, self-catering apartments and other travel accommodation. Excludes corporate-managed accommodation booked online
2011
F
2012
F For
per
sona
l use
onl
y
97 97
Holiday Rentals market size
Houses listed on Stayz Group sites
Other rented houses
Not currently rented
Holiday Houses
220,000 – 500,000
48,000
37,000-45,000
120,000 – 400,000
Holiday houses in Australia (2012)
120,000+ holiday houses not currently rented. Owner reasons why:
• Flexibility for personal use ✓
• No financial need
• More time & effort than worth ✓
• No one would want to rent
• Expense of marketing ✓
100,000 holiday houses currently rented 7,000-10,000
Stayz Group penetration of Holiday Houses:
• 80%+ of houses for rent in online market places
• 48%+ of total houses for rent
• 10%+ of total houses
Houses listed on other online marketplaces
Source: Stayz
For
per
sona
l use
onl
y
98 98
Competitive advantage in listings and audience
Australian listings (April 2013) Thousands of entire homes
Monthly visits (April 2013) In millions
-
5
10
15
20
25
30
35
40
45
50
Stayz Group
Stayz HomeAway Airbnb Wotif
Agent managed
Private owners
-
0.5
1.0
1.5
2.0
2.5
Stayz HomeAway Airbnb
Note: “Stayz Group” represents de-duplicated view of Stayz + RAH + TAB; “Stayz” represents Stayz.com.au site alone Sources: Fairfax; Hitwise; HomeAway, Airbnb, Wotif websites
Stayz Group F
or p
erso
nal u
se o
nly
99 99
Ensuring Demand keeps pace with Supply
Demand versus Supply in Stayz
- 10,000 20,000 30,000 40,000 Supply
(# listings per year)
2008
2009
2010
2011
2012
Dem
and
(ave
rage
enq
uiry
-nig
hts
per y
ear,
per p
rope
rty)
• Network effect
• Everybody wins
• Pattern and relationship is consistent across brands (Stayz, Take A Break, Rent a Home)
• Also consistent with global competitor commentary
Source: HomeAway Owners Conference 2013 (Morgan Stanley analyst update note)
For
per
sona
l use
onl
y
100 100
Competitive Commission Rate position
Price growth enablers
• Wotif is increasing to 12% commission by 2014
• HomeAway addressable take rate is 10%
• OTAs typically target 10%-25% commissions, suggesting potentially room for price growth on selected properties, or source of competitive advantage
Estimated commission rates (2013) Per cent of TTV
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
Stayz RAH TAB Airbnb HomeAway Wotif
Listing fee
Booking fee HomeAway addressable
take rate
WTF currently 11%, 2014 moving to 12%
Note: Stayz represents private owner listing only. Stayz, RAH and TAB excludes priority and enhanced products Source: Fairfax. Airbnb. HomeAway 2012 Investor Presentation. Wotif company announcements
For
per
sona
l use
onl
y
101 101
Market-leading Customer satisfaction
Guest satisfaction Net promoter score, 2013
Owner and Agent satisfaction Net promoter score, 2013
34
17
-67
-31
-11
Stayz Airbnb HomeAway Wotif TripAdvisor
14
-2
-29
2 #N/A
Stayz Airbnb HomeAway Wotif TripAdvisor
Source: 2013 Customer Satisfaction Survey conducted by Insync for Fairfax Marketplaces brands
For
per
sona
l use
onl
y
102 102
Exploring International guest opportunities
Inbound volume distribution Per cent of nights booked, FY12
2.3%
1.3%
1.1%
0.9%
0.6%
0.1%
0.1%
0.0%
0.7%
United Kingdom
New Zealand
Asia / Pacific
Europe
United States
China
Japan
India
RoW
7% nights booked from overseas
For
per
sona
l use
onl
y
103 103
Exploring International guest opportunities
TripAdvisor partnership live since Dec 2012
• 12,000+ Stayz Australian properties are currently live on TripAdvisor worldwide
• 230,000+ International TripAdvisor properties are currently live on Stayz
Wego partnership live since Dec 2012
• Circa 10,000 Stayz properties are currently live on Wego worldwide
Recent partnership developments
Holiday Houses partnership live since Feb 2013
• 10,000+ Stayz properties are currently live on Holiday Houses in NZ
• 7,400+ Holiday Houses NZ properties are currently live on Stayz
For
per
sona
l use
onl
y
104 104
Stayz financials
Stayz financials (FY08-FY12) Millions of dollars
2.0 2.2 2.7 4.3 5.6 1.0 1.0
1.7
2.7
4.5
2.8 5.5
7.8
9.3
13.0
FY08 FY09 FY10 FY11 FY12
CAGR (2010-12)
64%
30%
5.9
8.7
12.1
16.3
23.1
EBITDA
Other costs
Group Revenue
38%
Marketing
44%
Mar-2011: TakeABreak and
RentAHome Acquisition
H1FY13 Trading
• In challenging environment, revenue growth above market trend, in low-mid teens
• Steady EBITDA contribution, entirely due to investing in marketing and staff
• Setting a solid base for future revenue and EBITDA growth
For
per
sona
l use
onl
y
105 105
Our focus – to be at the heart of every holiday rental experience
1. Growing listings • Cross sell listings among Stayz Group,
target rented houses not currently on Stayz, and houses not currently available for rent
• Streamline new listing process
2. Better customer experience • Deliver the best user experience
• Optimize search positioning, information
• Path to a closed system
3. Better trade experience • Ensure reliability and volume delivery
• Improve Owner and Agent Admin portals
www.stayz.com.au/22293 “Ocean Farm” Gerringong, NSW
For
per
sona
l use
onl
y
For
per
sona
l use
onl
y
107 107
Fairfax Media had exposure to $335m of real estate advertising & services in FY12 Fairfax Media’s exposure to real estate advertising & services in FY12 ($m)
• Domain includes: – Domain metro digital and print – Australian Property Monitors (APM) – Commerce Australia (CA)
• Regional is:
– Primarily print revenues – Growing online and operationally now
more aligned with Domain
• Other includes FCN NSW, Ags and Commercial Real Estate
• MMP is a 50% unconsolidated JV
141
48
65
81
0
50
100
150
200
250
300
350
MMP Other Regional Domain
335
Note: Total revenue for MMP, including Fairfax’s former FCN Victoria business. Includes some non-real estate advertising The JV with MMP was not completed until the start of FY13 and is not consolidated for revenue reporting – data shown for presentational purposes only
For
per
sona
l use
onl
y
108 108
Domain is a diverse real estate media & services business
Digital • Domain.com.au (desktop, smartphone and tablet)
Metro Print • Sydney Morning Herald • The Age • The Canberra Times
Community Print Publications
• Joint venture with MMP, including Fairfax’s former FCN Victoria business
Property Data
• APM is the leading provider of automated property valuations to the retail banks
• Property data subscriptions for real estate professionals
Customer Relationship Management
• Commerce Australia is the leading web-based CRM provider to real estate agents
For
per
sona
l use
onl
y
109 109
Domain financial overview – FY12 actuals Domain FY12 actuals ($m)¹
74.3
22.1
66.4
22.5
0
20
40
60
80
100
120
140
160
Revenue EBITDA
Digital Print
• EBITDA margin of 32% – Digital EBITDA margin of 34% – Print EBITDA margin of 30%
• Digital includes:
– Domain (exc. Regional) – APM – CA
• Print includes:
– Sydney Morning Herald – The Age – The Canberra Times
140.7
44.6
Note: 1) Management estimates. Unaudited figures
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Domain – H1 FY13 results Domain H1 FY12 versus H1 FY13 ($m)¹
40.5 28.8
12.3
32.9
37.5
11.2 13.9
0
10
20
30
40
50
60
70
80
90
100
H1 FY12 H1 FY13 H1 FY12 H1 FY13
Digital Print
• Growth in digital earnings offsetting the decline in print
• Digital revenues up 14% YoY
– Domain digital revenue (exc. APM and CA) up 17% YoY
• YoY revenue growth has increased in H2 (Jan-Apr) due to growth of depth products
• Digital EBITDA up 25% YoY
– Domain digital EBITDA (exc. APM and CA) up 27% YoY
• Digital EBITDA margin increased 3ppts to 37% Revenue EBITDA
73.4 66.3
23.5 22.1
Note: 1) Management estimates. Unaudited figures
8.2
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The metro print product has been repositioned and is distributed to more valuable audiences
SMH and Age print insert repositioned as a magazine style liftout
Plus distribution in the AFR
SMH and Age print liftout available online through an iPad app from May 2013
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What’s driving Domain’s digital growth?
• Market-leading position in affluent suburbs of Sydney and Melbourne
• Building national coverage
• Increasing demand for Depth products
• Mobile products that consumers want
• Delivering for real estate agents
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Domain has gained digital listings market leadership in many valuable Sydney suburbs Domain’s relative market share of digital listings in Sydney1
November 2010 to April 2011 November 2012 to April 2013
≥ 1.0 0.9 < 1.0 0.8 < 0.9 0.7 < 0.8 0.5 < 0.7 < 0.5
Key:
Note: 1) Relative market share versus competitors. Sale listings only. Monthly average using APM data; Source: Australian Property Monitors (APM); ABS postcode boundaries
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Within Melbourne, Domain is challenging for digital listings leadership in most central suburbs Domain’s relative market share of digital listings in Melbourne¹
November 2010 to April 2011 November 2012 to April 2013
≥ 1.0 0.9 < 1.0 0.8 < 0.9 0.7 < 0.8 0.5 < 0.7 < 0.5
Key:
Note: 1) Relative market share versus competitors. Sale listings only. Monthly average using APM data; Source: Australian Property Monitors (APM); ABS postcode boundaries
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Domain has over 7,500 agent subscribers – approximately 76% market penetration Domain agent subscribers and market penetration
50%
55%
60%
65%
70%
75%
80%
5,000
5,500
6,000
6,500
7,000
7,500
8,000
Jul-1
1 A
ug-1
1 S
ep-1
1 O
ct-1
1 N
ov-1
1 D
ec-1
1 Ja
n-12
Fe
b-12
M
ar-1
2 A
pr-1
2 M
ay-1
2 Ju
n-12
Ju
l-12
Aug
-12
Sep
-12
Oct
-12
Nov
-12
Dec
-12
Jan-
13
Feb-
13
Mar
-13
Apr
-13
May
-13
Domain.com.au agent subscribers (LHS)
Market penetration (RHS)
Source: Domain.com.au; Australian Property Monitors (APM) data
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Revenue from Domain digital subscriptions and depth products
Jul-1
1 Au
g-11
Se
p-11
O
ct-1
1 N
ov-1
1 D
ec-1
1 Ja
n-12
Fe
b-12
M
ar-1
2 Ap
r-12
M
ay-1
2 Ju
n-12
Ju
l-12
Aug-
12
Sep-
12
Oct
-12
Nov
-12
Dec
-12
Jan-
13
Feb-
13
Mar
-13
Apr-
13
Subscriptions Depth Products
Premium Plus and Elite listings introduced in
July 2012
Elite Priority Placement
Elite Subscription
Premium Plus
Depth products are driving growth in digital yield and revenues
$ F
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117 117
Domain’s digital revenue is currently New South Wales and Victoria centric
Geographic breakdown of Domain’s digital revenue in H1 FY13¹
89%
11%
NSW & VIC
Other States & Territories
• Focus on growing digital revenues in NSW and VIC
− Markets of significant size
− Ability to leverage our print footprint to offer bundles
Note: 1) Revenue from Domain digital subscriptions and depth products only (excludes display advertising, APM and CA)
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Mobile apps are about to reach 2.0m downloads. New downloads increased 75% YoY in Q3 FY13 Domain mobile app total cumulative downloads¹
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
Thou
sand
s
Note: 1) Domain mobile app downloads for Android, iPhone, iPad and WP7
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Mobile comprises 53% of total visits and is now the preferred platform for consumers
Domain visits across mobile and desktop platforms
0%
10%
20%
30%
40%
50%
60%
0
5,000,000
10,000,000
15,000,000
20,000,000
25,000,000
Sep-
11
Oct
-11
Nov
-11
Dec
-11
Jan-
12
Feb-
12
Mar
-12
Apr-
12
May
-12
Jun-
12
Jul-1
2 Au
g-12
Se
p-12
O
ct-1
2 N
ov-1
2 D
ec-1
2 Ja
n-13
Fe
b-13
M
ar-1
3 Ap
r-13
Mobile visits (LHS)¹
Desktop visits (LHS)
Mobile visits as a proportion of total visits (RHS)
Note: 1) Mobile visits for M-site, Android app, iPhone app, iPad app and WP7 app; Source: Google Analytics
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Growth in leads per listing is accelerating in H2
Leads per digital listing¹
July Aug Sept Oct Nov Dec Jan Feb Mar Apr May Jun
FY13 YTD FY12
Up 37% YoY in April 2013
Note: 1) Sale listings only
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Domain’s mobile apps have won several high profile awards
• Apple’s Top 25 Free iPad Apps of all time 2012 and 2013
• iPad and iPhone App Store Best of 2012
Winner AIMIA Best Classifieds
• iPhone app 2011 • iPad app 2012
2011 Apple Rewind Best Lifestyle iPad App
Winner Australian Mobile Awards 2011: Best conversion of audience to mobile F
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Digital product innovation is providing competitive differentiation
Highly rated mobile apps¹ Integration of APM data into Domain
Finger Search for precise search on iPad
4* rating 4.5* rating 3* rating
Note: 1) Current version, May 2013
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Growth opportunities
Domain: • Digital yield growth from depth products
• Regional markets
• New property developments
• Lead generation for financial services and utilities companies
APM: • Property data subscriber growth in NSW and VIC
• Automated valuations for mortgage insurers and second tier banks
Commerce Australia: • Continued growth from franchise agencies
• Independent agencies
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