ANNUAL REPORT 2020 HT&E LIMITED HT&E ANNUAL REPORT 2020 HT&E owns one of Australia’s leading audio companies, ARN, providing the most complete audio experience for our listeners and the Kyle & Jackie O most comprehensive audio KIIS 1065 Sydney solutions for our partners. The Group also maintains a number of other investments, including a 25% interest in the secure messaging business, Soprano and outdoor assets in Hong Kong. 5.3m Radio audience #1 reach (weekly) * national commercial radio network ^ 2.6m 124% Digital websites podcast downloads ^^ audience reach (monthly)** * Source: GfK Radio Ratings, S8 2020, SMBAP, ARN AM/FM/DAB, Mon-Sun 5:30-12mn (cume), Commercial Radio Groups AM/FM/ 1.9m DAB+, Mon-Sun 5:30-12mn, Mon-Fri 5:30-9am (share %), P10+, iHeartRadio registered unless otherwise stated. ** Source: Google Analytics: Website Page Impressions, All Devices, users (lifetime) *** Australia, station websites include KIIS Network, PG Network, Edge (not de-duped): Dec 2020). *** Source: Adobe Analytics, iHeartRadio Australia Registration Data, Lifetime Users Dec 20. 81.3m **** Source: AdsWizz Audiometrix, Total Radio Streaming, Total Listening Hours 2020 v 2019. Streaming listening hours ^ Source: GfK Radio Ratings, S8 2020, SMBAP, M-S 5:30am-12mn, (+53% YoY) **** cume, ARN AM/FM/DAB+, P10+. ^^ Source: Megaphone Hosting Platform, 900k+ Australian Device Sample, December 2020 cf. January 2020. ^^^ Source: Australian Podcast Ranker. REDEFINING AUDIO CONTENTS 01 We are everywhere our listeners are, providing the greatest breadth and depth of audio content in Australia. ARN’s stations broadcast across six metropolitan markets to over five million people each week. People engage via three core brands: The KIIS Network, The Pure Gold Network and The Edge. The Network also owns a 50% share of Perth’s Nova 93.7FM and Brisbane’s 97.3FM in a joint venture with Nova Entertainment and 50% of Canberra FM #1 Radio (104.7FM and Mix106.3) in a joint Australian podcast venture with Southern Cross Austereo. publisher since launch ^^^ #1 and #2 podcasts, and more titles in the top 10 than any other publisher iHeartRadio enables Australians Creating ideas that change the to get more of what they love way people feel about brands. about radio whenever and wherever they want. With an An independent creative company in expanded podcast offering, which HT&E holds a 51% interest, Emotive makes ideas that live within advertising, integrated promotion across ARN’s entertainment and design. Part ad core radio assets and audience agency, part production company, part growth, it provides vast commercial content distributor, Emotive is deliberately partnership opportunities. (un)structured so it can respond to In this report iHeartRadio is ARN’s free radio, music client business issues or opportunities streaming and podcasting platform in effectively, rather than default to Delivering Our Strategy 02 ‘traditional comms’ as the answer. the Australian market. It is the only digital Chairman’s Report 04 music platform that combines podcasts, Chief Executive Officer's Report 06 custom music and live radio, covering 1500 live radio stations across all ARN, Response to COVID-19 08 NZME and iHeartMedia’s US stations. Operating and Financial Review 10 The platform also broadcasts live events, Intelligent and secure business Review of Operations 14 getting fans up close and personal with mobile messaging software Corporate Social Responsibility 16 the artists they love and it has one of the solutions for enterprises and largest podcast libraries in Australia. governments worldwide. Board of Directors 20 Senior Management Team 22 Soprano Design is an independent software vendor in which HT&E holds a 25% stake. Corporate Governance Statement 24 Through the diversification of the customer Directors’ Report 24 Pioneer of the highest quality base along with a growing need for CPaaS Remuneration Report 30 innovation and premium connected (Communications Platform as a Service) Auditor’s Independence Declaration 45 on-the-go advertising solutions. solutions, we recognise a significant market growth opportunity. Soprano has Consolidated Financial Statements 47 Cody Out-of-Home in Hong Kong, has a nearly 4000 customers globally across Directors’ Declaration 102 network of over 440 outdoor advertising APAC, EMEA, LATAM and the US ranging panels including the major Hong Kong from large corporations to independent Independent Auditor’s Report 103 tunnels and iconic tram shelters on companies across Government, Healthcare, Shareholder Information 108 Hong Kong Island. Finance, Education, Retail, Manufacturing Corporate Directory 111 and Logistics. HT&E LIMITED AND CONTROLLED ENTITIES ABN 95 008 637 643 02 ANNUAL REPORT 2020 Our vision is to enrich We aim to be Australia’s leading audio company by providing every Australian’s life the most complete audio experience for our listeners and through the medium the most comprehensive audio solutions for our partners, of audio. using data-led insights to provide the platforms, content and interactions that deliver the entertainment and business results that our customers want. Our single customer view brings together a full 360 degree audio experience which we call ARN’s Audiosphere. Across the Audiosphere we are investing in capability and product to ensure we achieve our ambition. ARN radio stations reaching Strong growth driven #1 & #2 podcasts^^^ 5.3 million people each week* by at home listening #1 catch up radio podcast^^^ through smartphones Digital websites and smart speakers reaching 2.6 million Australians monthly** 124% * #1 FM for Breakfast 1.9m podcast downloads since ^^^^ * the start of the year #1 Total Females registered users (lifetime) #1 Grocery Buyers* 19% YoY^ $2.5m Commercial market share outperforming market every revenue across *** 14% 148 campaigns quarter since Q2 2019 digital listening of (2019: $50k) ARN radio stations^^ 225% YoY revenue across 532 campaigns ^^^ STRATEGY Radio Streaming Podcasts Growth #1 FM for for #1 FM Breakfast Strong #1 Podcast Publisher in Australia DELIVERING OUR OUR STRATEGY 03 Deliver on strategy during COVID-19 * Source: GfK Radio Ratings, S8 2020, SMBAP, M-S 5:30am-12mn, cume, ARN’s Audiosphere ARN AM/FM/DAB+, P10+. * * Source: Google Analytics: Website Page Impressions, All Devices, Australia, station websites include KIIS Network, PG Network, Edge (not de-duped): Dec 2020). *** Source: Commercial Radio Metro Ad Revenue 2020 Deloitte.ARN Dynamic Audio launched #1 National Network in Surveys 1 and 2, 2020 ^ Source: Adobe Analytics, iHeartRadio Australia Registration Data, Lifetime Users Dec 20 (vs Dec 19). ^^ Source: Adswizz, Audiometrix, ARN Stations only, Total Listening Hours, Dec 2020 v Jan 2020. ^^^ Source: CRA and Triton, Australian Podcast Ranker: December 2020 of the participating publishers. ^^^^ Source: Megaphone Hosting Platform, 900k+ Australian Device Sample, December 2020 cf. January 2020. March 2020 – highest ever month on record: • 1.2m Monthly Active Users (+24%) Shake-Me Interactive Audio launched • Over 3m hours listening to ARN stations • Avg. 1,200 daily registrations (+34%) • 7.6m music stream starts (+10%) • 4.5m website users in April 2020 • 115% growth v 2019 Launched Feb 2020 • 7m+ social followers each month in 2020 • #1 Podcast Network in Australia • 114% growth in Facebook • 40M+ monthly impressions • 12% growth in Instagram • 10x increase compared to 2019 Source: IHeartMedia, March 2020 Source: Adobe & Google Analytics, March 2020 Source App stores Source: Triton Digital’s Australian Podcast Ranker, Reporting Period 17 Feb 2020 – 15 Mar 2020 Source: ARN Stream Log, March 2020 Source: Megaphone Jan-Apr 2020, Whooshkaa Jan-Dec 2019 Source: Google Analytics, Total Month Unique Users AU, Jan-Apr 2020 vs Jan-Dec 2019 Source: Facebook, Twitter, Instagram, Jan-Apr 2020 ARN Dynamic Audio is ARN RoamSource: is Adobe a mobileAnalytics, March 2020 ARN Neuro Lab is an a world first dynamic ad geo-based advertising solution in-house neuroscience product for broadcast across digital audio and lab for evaluating and radio delivering the display inventory. It targets optimising advertising personalisation of digital people based on their specific attention, engagement audio at the scale of location, either past or present and impact. broadcast radio, with and has delivered impactful significant demand from results for our clients. commercial partners. AdWave and PodWave offer Podsights is the Jonesy & Amanda 11 campaigns for increased scale and targeting industry leader in 101.7 WSFM Sydney brands like Coles, across digital audio by podcast advertising Toyota and McDonald’s. accessing the Adswizz Global attribution, allowing Marketplace of Premium advertisers to measure International Publishers. campaign performance. This improves efficacy for commercial partners. Investment in Investment Measurement Dynamic Audio Digital Innovation World Products that results deliver First HT&E LIMITED AND CONTROLLED ENTITIES ABN 95 008 637 643 04 ANNUAL REPORT 2020 CHAIRMAN’S REPORT No one could have anticipated the I am pleased to present this annual global pandemic. It has had a dramatic impact on our way of life, changed report of HT&E’s performance consumer behaviour, disrupted business models overnight, created significant in 2020 during what has been a advertiser uncertainty and resulted in widespread falls in global and local challenging year, like no other in advertising revenues. Against this backdrop, HT&E navigated the Company’s history. the period well and has maintained