2018 FINANCIAL HALF YEAR RESULTS …...2018 FINANCIAL HALF YEAR RESULTS PRESENTATION 16 FEBRUARY 2018 BARCLAY NETTLEFOLD, GROUP CEO PETER CARGIN, GROUP CFO AGENDA • HIGHLIGHTS •

2018 FINANCIAL HALF YEAR RESULTS PRESENTATION16 FEBRUARY 2018

BARCLAY NETTLEFOLD, GROUP CEOPETER CARGIN, GROUP CFO

AGENDA• HIGHLIGHTS

• H1 FY18 OPERATIONAL REVIEW

• H1 FY18 FINANCIAL RESULTS

• FY18 STRATEGIC PRIORITIES

• FY18 OUTLOOK

• APPENDIX

THE LEEDER | WAQMS Media Limited | H1 2018 Financial Year Results | 2

HIGHLIGHTS

THE G | VICQMS Media Limited | H1 2018 Financial Year Results | 3

H1 FY18 FINANCIAL HIGHLIGHTSDELIVERING ON RESULTS

QMS Media Limited | H1 2018 Financial Year Results | 4

REVENUEUP 25%

to $99.0m

UNDERLYING EBITDA

UP 27% to $22.7m

NPATUP 11%

to $8.3m

NPATAUP 20%

to $12.4m

CASH CONVERSION70%

NET DEBT / UNDERLYING EBITDA

1.7xDIVIDEND1.0 cps

FY18 UNDERLYING EBITDA GUIDANCE$44m-$46m

H1 FY18 OPERATIONAL HIGHLIGHTSDELIVERING ON OUR STRATEGY

DELIVERING ON DIGITAL DEVELOPMENTS

• Continued consolidation of landmark digital footprint.• Targeted growth, premium quality, strategic locations.• Successful integration of Canberra Airport and delivery of additional small format

digital across Gold Coast street furniture and Auckland Transport network.


MULTI-PLATFORM ENGAGEMENT

• Expansion of digital platform across multiple formats – Digital, Outdoor & Sport.• QMS Sport – securing FFA, NRL, and significant virtual opportunities.• Canberra Airport.• Digital Commons – extending online and mobile media audiences across

digital outdoor.

GROWING CAPABILITY IN DATA, TECHNOLOGY & ANALYTICS

• Continued investment in the Datalab to drive audience understanding and enhance data capabilities.

• Launch of industry first Digital Transaction Platform in New Zealand.

H1 FY18 MARKET OVERVIEW

Source: OMA/OMANZQMS Media Limited | H1 2018 Financial Year Results | 6

H1 FY18 AUSTRALIAN MEDIA REVENUE

UP15% | UP6%QMS OMAINDUSTRY

H1 FY18 NEW ZEALAND MEDIA REVENUE

UP 11% | UP10%QMS OMANZINDUSTRY

H1 FY18 AUSTRALIAN BILLBOARDS REVENUE

UP39% | UP12%QMS OMAINDUSTRY

QMS GROUP DIGITAL MEDIA REVENUE

66% VS 43%H1 FY18 H1 FY17

H1 FY18 OPERATIONAL REVIEW

THE CAPITALS | ACTQMS Media Limited | H1 2018 Financial Year Results | 7

DIGITAL DEVELOPMENT

Strong momentum in Australia and New Zealand digital pipeline.

• Extending geographic footprint in strategic markets.

• 24 landmark digital sites switched on in H1 FY18, includes 7 represented sites.

• H2 FY18 target of 13+ new landmark digital sites.

• FY18 guidance increased to 112+ landmark digital sites by 30 June 2018.

• Average Australian digital lease tenure of 14 years.

Committed to sustainable growth through strategic digital developments.

• Consolidating footprint in fastest growing outdoor category, roadside billboards.

• Small format development complementing landmark digital presence.

• Addition of Canberra Airport to digital portfolio, provides presence in high-value market.

DIGITAL DEVELOPMENT PIPELINE

GROWTH IN DIGITAL MEDIA REVENUEAUSTRALIA

H1 FY17 H1 FY18

NEW ZEALAND

H1 FY17 H1 FY18


STRATEGIC DIGITAL DEVELOPMENT

THE LAKES THE CAPITALS PARNELL ROAD

THE QUEENTHE PALM

THE VICTORIACOURTENAY PLACE


AUSTRALIA PERFORMING AHEAD OF THE MARKET

Solid performance across Australian media, well ahead of the market.• Successful integration and relaunch of Canberra Airport concession, delivering significant increase in

revenue generation.

• Gold Coast street furniture concession fully sold ahead of Commonwealth Games in April 2018, including additional digital rollout.

Building QMS Sport into the largest sports media rights holder.• Strong platform of sports media rights for all major codes now secured:

• Successful renewal of Football Federation Australia (FFA) signage services agreement;

• Strategic alliance with Techfront Australia, providing exclusive sales media rights for all NRL games including finals and State of Origin Series; which

• Complements existing media rights across Super Netball, Rugby Union, AFL and V8 Supercars.

• 588 individual sporting events now represented – increase of 54% since acquisition.

• Positive signs of growth across outdoor media and sports platforms.

• Continue to look at opportunities to expand our Sports portfolio – virtual signage, international.

Continued investment in the Datalab to drive audience understanding and enhance data capabilities.• Bespoke data and analytics tool in final testing and calibration stage.

• Delivering unique dynamic audience insights, providing greater client targeting opportunities and ROI.

• Additional advanced data projects in development, delivering further segmentation layers and convergence with other forms of digital media.


NEW ZEALANDLEADING THE MARKET IN DATA AND TECHNOLOGY

Continue to deliver strong digital signage growth.

• Targeted landmark digital billboard growth across key areas and precincts, such as Wellington Airport and Britomart Plaza.

• Solid sales and development growth across Auckland Transport.

Successful launch of the Digital Transaction Platform (DTP).

• New Zealand first for roadside digital billboards, providing advertisers with the ability to buy QMS’ premium digital inventory, on an audience impression basis.

• Provides increased buying flexibility and efficiency for advertisers.

• Significant opportunity for digital outdoor to be considered with, and compete for, online media investment.

Expansion into digital verticals to provide additional skills and capabilities.

• Strategic acquisition of a majority stake in Digital Commons, leading third party digital representation agency.

• Specialise in online and mobile media and will be QMS’ primary sales channel partner for our DTP.

• Reinforces our strategic priority of connecting audiences through multi-platform engagement and customised content.


DIGITAL TRANSACTION PLATFORM

H1 FY18 FINANCIAL RESULTS

THE LAKES | NSWQMS Media Limited | H1 2018 Financial Year Results | 12

CONTINUED GROWTH DRIVEN BY DIGITAL ROLLOUT AND ACQUISITIONS

1. Ratio based on last twelve months Underlying EBITDA.Note: NPATA defined as Net Profit After Tax, before Amortisation.Underlying numbers used throughout this presentation exclude non-underlying items as detailed in the Appendix on Slide 25 in order to provide a more meaningful comparison of the performance of the business.

H1 FY18 H1 FY17

Actual Actual Change

($ million) ($ million) %

Revenue - statutory 99.0 79.0 25%

EBITDA 22.5 17.3 30%

EBITDA - underlying 22.7 17.9 27%

EBITDA Margin - underlying 23% 23%

NPAT 8.3 7.5 11%

NPATA 12.4 10.3 20%

EPS (cents) 2.5 2.3 9%

Operating Cash Conversion % 70% 90%

Net Debt / Underlying EBITDA ratio¹ 1.7x 0.5x

Interim dividend 1.0 cps 0.8 cps


• Continued strong revenue growth reflects strategic digital roll-out and QMS Sport acquisition, with particularly strong organic growth in Australia.

• Underlying EBITDA up 27% to $22.7 million.

• Underlying EBITDA margin of 23% consistent with same period last year.

• Solid cash conversion in H1. Improved conversion expected in H2 due to seasonally higher revenues in Q2 converting to cash in Q3, and the additional lunar billing period.

• Net debt increase in line with expectations, and well within banking covenants.

• Interim dividend of 1.0 cent per share declared, consistent with payout ratio range.

EXPANDED PLATFORM DELIVERING REVENUE AND EARNINGS GROWTH

• Revenue up 25% on the pcp driven by organic growth and contribution from the QMS Sport acquisition.

• Gross margins consistent with same period last year.

• Increase in operating expenses reflects planned ongoing investment in systems, data and resources to support our growth.

• D&A increase driven by acquisitions and digital roll-out.

• Excluding the impact of the capitalised borrowing costs written off in H1 FY17, finance costs increased 39% reflecting the increased borrowings to fund growth.

• Tax expense has increased in H1 FY18 reflecting the higher earnings and H1 FY17 included tax benefits from the absorption of prior year tax losses and entry into a tax consolidated group.

1. H1 FY18 non-underlying costs of $0.2m refers to: acquisition, restructuring and integration costs.

H1 FY18 H1 FY17Actual Actual Change

($ million) ($ million) %Revenue 99.0 79.0 25%Cost of sales (50.9) (40.3) 26%Gross profit 48.1 38.7 24%Gross profit margin 49% 49%Operating expenses (25.6) (21.4) 20%EBITDA 22.5 17.3 30%Non-underlying costs¹ 0.2 0.6Underlying EBITDA 22.7 17.9 27%Underlying EBITDA margin 23% 23%D&A (8.3) (5.5) 51%EBIT 14.2 11.8 20%Net finance costs (1.6) (1.7) -6%Tax (4.3) (2.6) 65%NPAT 8.3 7.5 11%Amortisation 4.1 2.8 46%NPATA 12.4 10.3 20%


CONTINUED GROWTH ACROSS KEY MARKETS

Australia (66% of Group Revenue):• 41% revenue uplift, driven by digital development and

contribution from QMS Sport. • Excluding acquisitions, organic growth of 22%.

New Zealand (31% of Group Revenue):• 6% revenue growth.• In NZ dollar terms, overall revenue growth 11%.

Other (3% of Group Revenue):• Small revenue decline due to lower occupancy levels across

Bali airport and a decrease in inventory within Jakarta airport.


REVENUEBREAKDOWN

DIGITAL GROWTH DELIVERING ON OUR STRATEGY

Digital:• Growth reflects roll-out of development pipeline and

contribution from acquisitions.• Excluding acquisitions, organic growth of 52%.

Static:• Excluding conversions, static revenue was flat.

Print:• Flat performance driven by pricing pressure and volume mix.

H1 FY18 H1 FY17 % Change

Landmark digital billboards 99 61 62%

Small format digital screens 3,805 3,531 8%

Static billboards 797 791 1%

Small format static 653 662 -1%


REVENUE BY FORMAT

STRONG BALANCE SHEET

• Growth in net assets predominantly relates to individual site acquisitions and continued digital development.

• Increase in net debt reflects the planned investment in digital rollout, site acquisitions and deferred consideration payments.

• Net Debt / Underlying EBITDA ratio 1.7x (up from 1.2x at 30 June 2017).

1. Non-underlying costs: H1 FY18 relates to acquisition, restructuring and integration costs of $0.2m. Ratio based on last twelve months Underlying EBITDA.

Dec-17 Jun-17Actual Actual

($ million) ($ million)Cash and cash equivalents 25.2 11.4Trade and other receivables 31.7 30.6Property, plant and equipment 86.0 79.8Goodwill and Intangible assets 201.2 187.8Investments 1.0 1.7Other assets 31.7 18.8Total assets 376.8 330.1Trade and other payables 17.6 15.3Loans and borrowings 100.0 57.2Deferred and contingent consideration 11.4 15.4Provisions 10.8 9.7Other liabilities 32.8 30.7Total liabilities 172.6 128.3Net assets 204.2 201.8

Net Debt 74.8 45.8Net Debt / Underlying EBITDA ratio¹ 1.7x 1.2xNet Debt / (Net Debt + Equity) 27% 18%


MOVEMENT IN NET DEBT POSITION

• Movement in net debt predominantly attributable to $34.3m of investments in digital developments and acquisitions.

• Total bank facilities of $93.4m –with $83.4m net of cash available to the Group.

• Net debt includes the $70.0m raised under the issue of 5 year senior unsecured notes.


SOLID CASH CONVERSION WITH CONTINUED INVESTMENT FOR GROWTH

• Solid cash conversion in H1.

• Improved conversion expected in H2, (CY17 cash conversion 87%).

• Net proceeds from borrowings includes the $70.0m raised under the issue of 5 year senior unsecured notes, offset by banking facility repayment.

• Capex reflects continued roll-out of digital development pipeline.

• Acquisition payments include $7.7m deferred consideration and individual site acquisition payments.

• FY17 final dividend payment funded by underwritten dividend reinvestment plan.


H1 FY18 H1 FY17Actual Actual

($ million) ($ million)EBITDA 22.5 17.3Non-cash items in EBITDA 2.1 0.7Change in working capital (8.9) (2.5)Operating cash flow 15.7 15.5Operating cash flow conversion % 70% 90%Capital Expenditure (11.0) (12.8)Acquisitions (23.3) (24.9)Investing cash flow (34.3) (37.7)Share issue costs (0.5) 19.2Dividend paid - (4.5)Net proceeds from borrowings 35.9 18.5Income tax and interest paid (2.5) (1.9)Financing cash flow 32.9 31.3Net cash flow 14.3 9.1

FY18 STRATEGIC PRIORITIES

QMS SPORT | NRLQMS Media Limited | H1 2018 Financial Year Results | 20

FY18 STRATEGIC PRIORITIESFASTEST GROWING DIGTAL, OUTDOOR & SPORTS MEDIA BUSINESS


MULTI-PLATFORM ENGAGEMENTOUTDOOR – extending geographic footprint in strategic markets.• Targeted landmark digital and small format digital platform that adds value to portfolio.• Complementary formats that deliver multiple touchpoints for advertisers.QMS SPORT – largest on-field sports media network.• Consolidated media rights across key sports.• Virtual capabilities.• Fan engagement.• International growth opportunities.• Fully integrated sports media channel.DIGITAL VERTICALS – expanding the platform across multiple formats.• Social media engagement.• Digital transaction platform, complementary to online and mobile media.

CONTENT CREATION & APPLICATIONSDIGILAB – delivering dynamic campaign capabilities for advertisers.• Continued investment in technology and

innovation.DIGITAL COMMONS – connecting audiences through multi-platform engagement and customised content.• Capabilities to expand online and mobile

media audience buying into outdoor media.

SOCIAL MEDIA PLATFORM – connecting advertisers with social media influencers.• Creating further touchpoints for brands

and advertisers to connect with audiences from the one multi-engagement platform.

DATA, TECHNOLOGY & ANALYTICSDATALAB – future value potential from leveraging data, analytics and content.• Development of bespoke data and

analytics tool.• Investment in advanced data projects.DIGITAL TRANSACTION PLATFORM (DTP) –providing increased buying flexibility and efficiency for advertisers.• Creating opportunities for digital outdoor

to become part of the online media stack.

FY18 OUTLOOK

THE RUNDLE | SAQMS Media Limited | H1 2018 Financial Year Results | 22

FY18 OUTLOOK

• Delivery of our multi-platform engagement strategy.

• Ongoing investment and development in our team and our data and analytics capabilities.

• Continue to look to extend our presence in Sport and for strategic opportunities where we can add value for shareholders.

• Good forward visibility on H2 FY18.

• Well placed to deliver continued revenue and earnings growth.

FY18 EBITDA guidance $44m-$46m.

QMS Media Limited | H1 2018 Financial Year Results | 23QMS SPORT | NRL

APPENDIX

STREET FURNITURE | GCQMS Media Limited | H1 2018 Financial Year Results | 24

RECONCILIATION OF STATUTORY TO UNDERLYING RESULTS

• H1 FY18 non-underlying costs of $0.2m relates to:• Restructuring and integration costs ($0.1m).• Acquisition transaction costs ($0.1m).

H1 FY18 H1 FY18 H1 FY18Actual Statutory Non-underlying costs Actual Underlying

($ million) ($ million) ($ million)Revenue 99.0 - 99.0 Total costs (76.5) 0.2 (76.3)EBITDA 22.5 0.2 22.7


IMPORTANT NOTICE

QMS Media Limited’s Financial statements for the period ended 31 December 2017 are presented in accordance with Australian Accounting Standards.

The company has chosen to include certain “non-financial IFRS” financial information. The Directors believe this non-IFRS financial information provides useful information to users in measuring the underlying financial performance.

Non-IFRS measures have not been subject to audit.

GLOSSARY:EBIT: earnings before interest and taxEBITDA: earnings before interest, tax, depreciation and amortisationNPAT: net profit after taxNPATA: net profit after tax, before amortisation


IMPORTANT NOTICE AND DISCLAIMER

This document is issued by QMS Media Limited ACN 603 037 341 (“QMS”) to provide summary information about QMS and its associated entities and their activities as known by QMS at the date of this document. The information contained in this document is of general background and does not purport to be complete.

The information set out in this document does not constitute or purport to be a recommendation by QMS or any other person to buy or sell securities and has been prepared without taking into account the objectives, financial situation or needs of any recipient or other person. The information in this document does not constitute financial product advice (nor investment, taxation or legal advice). This document presents financial information on both a statutory basis (prepared in accordance with Australian Accounting Standards that comply with International Financial Reporting Standards) as well as information provided on a non-IFRS basis. The distribution of this document including in jurisdictions outside of Australia may be restricted by law. Any person who receives this document should seek advice on and observe any such restrictions. This document is not, and does not constitute, an offer to sell or the solicitation, invitation or recommendation to purchase any securities in any jurisdiction and neither this document nor anything contained herein shall form the basis of any contract or commitment. This document may not be distributed or released, directly or indirectly, in the United States.

QMS does not represent or warrant that this document is complete or that it contains all material information about QMS or that a prospective investor may require in evaluating a possible investment in QMS. Nothing contained in this document nor any information made available to you is, or shall be relied upon as, a promise, representation, warranty or guarantee, whether as to the past, present or the future.

To the maximum extent permitted by law, QMS, its respective officers, employees, related bodies corporate, affiliates, agents or advisers expressly disclaims any and all liability (including without limitation for negligence) for any statements, representations or warranties or in relation to the accuracy or completeness of the information, statements, opinions or matters, express or implied, contained in, arising out of or derived from, or for omissions from, this document including, without limitation, any financial information, any estimates or projections and any other financial information derived therefrom. In particular, this document does not constitute, and shall not be relied upon as, a promise, representation, warranty or guarantee as to the past, present or the future performance or activities of QMS.

This document contains certain forward looking statements and opinions (including forecast financial information), which are provided as a general guide only and should not be relied on as an indication or guarantee of future performance and which involves known and unknown risks, uncertainties and other factors, many of which are outside the control of QMS and which may cause actual results, performance or achievements to materially differ from any results, performance or achievements expressed or implied by forward looking statements and opinions. Neither QMS or any other person makes any representation or gives any guarantee or assurance that the occurrence of any event expressed or implied by any forward looking statement will actually occur. Past performance is not necessarily a guide to future performance and no statement, representation or warranty is made by QMS or any person as to the likelihood of achievement or reasonableness of any forward looking statements, forecast financial information or other forecast.

All figures in this document are in Australian dollars (AUD) unless stated otherwise. The information in this document remains subject to change without notice.

This presentation should be read in conjunction with QMS periodic and continuous disclosure announcements lodged with ASX, which are available at www.asx.com.au


THANK YOU

Documents

2018 FINANCIAL HALF YEAR RESULTS …...2018 FINANCIAL HALF YEAR RESULTS PRESENTATION 16 FEBRUARY 2018 BARCLAY NETTLEFOLD, GROUP CEO PETER CARGIN, GROUP CFO AGENDA • HIGHLIGHTS •