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View Annual Report FAIRFAX MEDIA ANNUAL REPORT 2015 MEDIA ANNUAL FAIRFAX FAIRFAX MEDIA ANNUAL REPORT 2015 GROW TRANSFORM INVEST GROW. TRANSFORM. INVEST. GROW. GROW BUILDING AND INVESTING IN DOMAIN GROUP, GROWING VERTICALS AND LEVERAGING AREAS WHERE WE HAVE COMPETITIVE STRENGTH AND SKILLS, SUCH AS LIFE MEDIA & EVENTS. REALISING THE FULL POTENTIAL OF OUR RESTRUCTURED RADIO BUSINESS. IV FAIRFAX MEDIA IS AT THE FOREFRONT OF REVOLUTIONISING MEDIA AND LEADING THE CHANGE WITH OUR STRATEGY TO GROW, TRANSFORM AND INVEST. We are at the heart of Everyone in our business conversations that matter and is passionate and puts customers creating connections that count. and audiences at the centre of We are the trusted voice, everything we do. informing, engaging and We are focused on growing entertaining audiences and shareholder value by engaging communities in Australia audiences, communities and and New Zealand via our businesses through compelling newspapers, websites, radio content and services, monetising stations, events and dynamic across a range of business models. digital venues for commerce We are growing and transforming and information. Fairfax Media, investing in it, Every day we empower millions making it a stronger, diversified of people with our independent portfolio of businesses – journalism, quality content and spanning media, marketing great experiences – and we have services, property services, data, been doing it for 184 years. entertainment, and beyond – Our journalists perform their sustaining the important work we jobs with independence, do in the communities we serve. insight and integrity. Independent. Always. AUSTRALIAN DOMAIN LIFE MEDIA METRO MEDIA GROUP & EVENTS LEADING REAL ESTATE MEDIA LIFESTYLE MEDIA METROPOLITAN AND SERVICES ASSETS AND EVENTS NEWSPAPERS & Domain Group Life Media’s strong DIGITAL MEDIA continued to fast-track portfolio includes lifestyle- Publishing arm for The its national expansion oriented products Sydney Morning Herald, with a 20% increase spanning travel, health, The Age and The Australian in agent subscribers; 16% food, parenting and Financial Review saw increase in listings; and motoring combined earnings growth of 52%, 30% increase in average with our Events business resulting from cost reduction monthly visits across focused on running, and benefiting from the main and mobile sites swimming, food and wine, closure of Tullamarine and apps. Acquisitions parenting and the arts. and Chullora print sites in totalling $150 million and The combination builds 2014. Re-scaling printing operational investment on the strong natural operations for efficiency, in sales and product audience and commercial digital subscriptions and development have links of the two businesses other new revenue streams been undertaken to and brings sharper helped sustain publishing aggressively expand commercial focus, profitability in the face Domain’s footprint and speed to market and an of continued print establish it as a strong improved product mix to advertising declines. growth vehicle. our millions of customers. +7% +36% +41% Digital Digital Events revenue revenue revenue growth growth growth - 5% +45% +53% Total Total Number of revenue revenue consumer growth events +52% +46% 2M Adjusted EBITDA Event EBITDA growth participant growth numbers SNAPSH2 OT DIGITAL AUSTRALIAN NEW ZEALAND MACQUARIE VENTURES COMMUNITY MEDIA RADIO PORTFOLIO OF MEDIA LEADING NZ NETWORK DIGITALLY-FOCUSED LEADING RURAL NEWSPAPERS & LEADING NATIONAL ASSETS AND REGIONAL DIGITAL MEDIA NEWS, TALK, SPORT HuffPost Australia, a local NEWSPAPERS & Building a digital future & MUSIC RADIO and improving audience partnership with leading DIGITAL MEDIA NETWORK global source of news monetisation through and information The ACM restructured from product innovation, Fairfax has a 54.5% share- Huffington Post, adds 65 separately run businesses marketing investment, holding in the ASX-listed to the strong portfolio of into six geographic as well as significant editorial Macquarie Radio Network. digital-only publishing operating groups to create and sales transformation. The expanded MRN is the assets. Joint venture a modern, stronger rural The number of stories result of the merger of Fairfax Subscription Video-On- and regional media network. published across digital Radio Network’s 3AW, 2UE, Demand service Stan The transformation program platforms has increased 4BC and 6PR stations with launched on Australia Day is focused on maintaining from 400 to 1,500 a day. MRN’s 2GB. The radio merger and is fast gaining traction a strong footprint for local Stuff.co.nz is setting an unlocked significant value with consumers. Pleasing news, content and impressive pace as our and synergies, and creates progress was made with sales capability, while New Zealand digital brand, new advertiser opportunity transactional businesses adopting new technology, moving from seventh to by bringing together the and early stage investments, upgrading newsrooms, and fourth largest digital site in leading news, talk and with some strategic bolt-on working more efficiently the country with monthly sport stations in Sydney acquisitions made. with new systems. audience of 1.8 million. and Melbourne. $20M $60M +38% #1 FY15 Targeted Digital Stations investment annualised revenue in Sydney and (excl. Stan) savings by growth Melbourne end of FY16 OF - - UP 3 5 8% 5% TO $15M Partnerships with Total Total Annualised 3 of the top 5 revenue revenue merger synergy digital-only US benefits media groups 300K - 34% - 12% $78M Stan gross Adjusted Adjusted Proceeds sign-ups EBITDA EBITDA from sale of 96FM SNAPSH OT FAIRFAX MEDIA ANNUAL REPORT 2015 | 3 STATS TRANSFORM CONTINUING THE TRANSFORMATION TO CREATE A SUSTAINABLE PUBLISHING BUSINESS ON THE PRINT TO DIGITAL JOURNEY. MAINTAINING COST DISCIPLINE AND DELIVERING EFFICIENCIES. 4 WE ARE BUILDING A STRONGER, MORE DIVERSIFIED BUSINESS 11M 7.5M Australian audience across print, Australian national and web and mobile metro masthead reach 5.1M 159K Audience for The Sydney Paid digital subscribers to Morning Herald – Australia’s The Sydney Morning Herald No. 1 masthead and The Age 45% 34% Growth in Domain unique Increase in Domain mobile app monthly audience to 2.5m downloads to 3.8m 20% 2.3M Growth in Domain.com.au Listeners across MRN’s agent subscribers national radio network 2.8M 1.8M New Zealanders connect New Zealanders visit with Fairfax every day Stuff.co.nz each month FAIRFAX MEDIA ANNUAL REPORT 2015 | 5 FAIRFAX MEDIA Fairfax’s robust financial position depreciation and amortisation and operating earnings stability (EBITDA) of $287.4 million for HAS ACHIEVED in the last two financial years continuing businesses, which A PROFOUND demonstrates the success of the was about 3% lower than the Company’s strategy to optimise $297.7 million in the prior year. TRANSFORMATION IN its core strengths and reshape This result has been achieved THE LAST FOUR YEARS the business for future growth despite significant investment FROM A TRADITIONAL while continually adapting to of around $42 million, the the innovation happening in the majority in Domain, Events and MEDIA BUSINESS media industry globally. Stan which is yet to be fully reflected in the performance Total Group revenue grew INTO A STRONGER, of these businesses. Earnings 0.3% year-on-year to MORE DIVERSIFIED before interest and tax (EBIT) $1,840.8 million for continuing MEDIA COMPANY of $222.6 million is 8% higher. businesses in the 2015 financial For continuing businesses, INCREASINGLY year. This is the first time in earnings per share went from FOCUSED ON eight years that the Group has 6.3 cents to 6.0 cents and paid delivered revenue growth. total dividends for the year of HIGH-GROWTH This achievement reflects the 4 cents per share. After taking OPPORTUNITIES. many actions we have taken into account significant items, the over recent years, including company reported a net profit acquisitions, restructuring and after tax of $83.2 million. ROGER CORBETT, AO growth initiatives. The reported net profit result Fairfax anticipated and took includes significant items expense strategic action to prepare for after tax of $60.5 million. the ongoing structural shift away The Company started the from print advertising which is financial year with a strong taking place in both local and balance sheet following international markets. In the significant net debt reduction financial year, the pressures in recent years. The Company faced by print were offset by finished the year in a net cash revenue growth in our real estate position, putting us in a strong and media services business position to both invest for Domain Group, digital revenue growth and undertake capital growth and new revenue management strategies focused streams, and contribution from on maximising shareholder acquisitions. The Company’s returns. In February, the revenue streams have evolved company announced an on- to include digital subscriptions, market buyback of up to 5% of marketing services, property ordinary shares over 12 months. services, events, entertainment REVOLUTIONISING MEDIA and more. Gone are the days Fairfax has been at the forefront where revenue consists of just of revolutionising media by advertising and cover price thinking through the immense revenue. A concerted effort to challenges of reshaping, diversify our revenue base has restructuring and revitalising resulted in improved profitability. the traditional media model. For the 2015 financial year, Fairfax is an undisputed leader Fairfax delivered operating in transforming to embrace
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