O U R O D Y S S
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ANNUAL REPORT 2017 OUR ODYSSEY MediaPrima AT A GLANCE CONTENTS WHO WE ARE HOW WE ARE GOVERNED 4 Corporate Profile 91 Corporate Governance Overview Statement 6 Our Milestones 109 Additional Compliance Information 9 Corporate Structure 110 Statement on Risk Management and Internal Control 10 Organisation Structure 121 Audit Committee Report 12 Snapshots of 2017 127 Risk Management Committee Report 16 Awards and Recognition 2017 OUR NUMBERS OUR PERFORMANCE REVIEW 130 Financial Statements 20 Group Chairman’s Statement 24 Group Managing Director’s Statement-MD&A ADDITIONAL INFORMATION 30 Review of Operations 213 Analysis of Shareholdings 54 Segmental Analysis 216 Top 10 Properties Held by the Group 55 Statement of Value Added & Distribution of Value Added 217 Corporate Information 56 Viewership, Listenership & Readership Data 57 Share Price Chart 58 Group Financial Review AGM INFORMATION 219 Notice of Annual General Meeting 221 Statement Accompanying Notice of Annual General OUR COMMITMENT TO SUSTAINABILITY Meeting 60 Sustainability Report 222 Financial Calendar 75 Investor Relations • Proxy Form OUR LEADERSHIP • Group Directory 76 Our Board of Directors 78 Directors' Profile 86 Senior Management Team OUR ODYSSEY As digital disruption takes full form, we at Media Prima aim to embrace the many opportunities that come with it. In 2017, Media Prima embarked on our Odyssey Transformation Plan – a strategic initiative to reinvent the Group to become the leading digital-first content and commerce entity. In doing this, we will continue to enrich lives by informing, entertaining and engaging across all media, just as how we have been doing for decades. The only difference is that we are doing them all with a strong focus on digital platform. This annual report tells the story of our digital journey. MEDIA PRIMA’S POSITION AND CHALLENGES Media 6 Global CHALLENGES - market reshaping driven by digital & e-commerce Prima DECLINE IN PRINT AS GROWING VIDEO SHIFT IN ADEX TO MOBILE FIRST CONSUMER ENGAGE E-COMMERCE AS A PREFERRED MEDIA CONSUMPTION DIGITAL CONSUMPTION VIA MULTIPLE WAY OF LIFE PATTERN PLATFORMS -10% p.a. +20% p.a. Digital Adex Mobile Multi-platform to e-commerce to grow growth of 2X > 50% strengthen further > 2X online video by 2020 of digital ads by 2020 by 2020 by 2020 BEYOND TRADITIONAL, BEYOND MEDIA, BEYOND MALAYSIA Initiatives guided by: Malaysia’s #1 infotainment champion Strengthen Build position Grow commerce Expand Maximise Build right broadcast and monetise as powered by footprint “current value” operations and Revamp leadership & leading digital integrated regionally organisations operations & 5 STRATEGIES organisation build sustainable publisher media to support TO BECOME AN OUT-OF video/OTT transformation Malaysia’s #1 publisher THE-BOX MEDIA PLAYER model for future Unlock dormant assets NET REVENUE FYE 2017 & TARGETS Move to Create Diversified commerce player, powered localised digital by integrated media and relevant Focus content on B2C FYE 2017 segments COMMERCE AND NON-ADVERTISING REVENUE AT A Leading Malaysian content producer, TARGET 2017 with global sales and distribution 20% INTERNATIONAL REVENUE DIGITAL REVENUE TARGET 2020 % GLANCE 19% 1 Regional Out-of-Home player in 3% ASEAN % 40% 1 3% 10% Integrated, customer-centric and agile 20% CONTENTS WHO WE ARE HOW WE ARE GOVERNED 4 Corporate Profile 91 Corporate Governance Overview Statement 6 Our Milestones 109 Additional Compliance Information 9 Corporate Structure 110 Statement on Risk Management and Internal Control 10 Organisation Structure 121 Audit Committee Report 12 Snapshots of 2017 127 Risk Management Committee Report 16 Awards and Recognition 2017 OUR NUMBERS OUR PERFORMANCE REVIEW 130 Financial Statements 20 Group Chairman’s Statement 24 Group Managing Director’s Statement-MD&A ADDITIONAL INFORMATION 30 Review of Operations 213 Analysis of Shareholdings 54 Segmental Analysis 216 Top 10 Properties Held by the Group 55 Statement of Value Added & Distribution of Value Added 217 Corporate Information 56 Viewership, Listenership & Readership Data 57 Share Price Chart 58 Group Financial Review AGM INFORMATION 219 Notice of Annual General Meeting 221 Statement Accompanying Notice of Annual General OUR COMMITMENT TO SUSTAINABILITY Meeting 60 Sustainability Report 222 Financial Calendar 75 Investor Relations • Proxy Form OUR LEADERSHIP • Group Directory 76 Our Board of Directors 78 Directors' Profile 86 Senior Management Team OUR ODYSSEY As digital disruption takes full form, we at Media Prima aim to embrace the many opportunities that come with it. In 2017, Media Prima embarked on our Odyssey Transformation Plan – a strategic initiative to reinvent the Group to become the leading digital-first content and commerce entity. In doing this, we will continue to enrich lives by informing, entertaining and engaging across all media, just as how we have been doing for decades. The only difference is that we are doing them all with a strong focus on digital platform. This annual report tells the story of our digital journey. 5-YEAR SIMPLIFIED GROUP FINANCIAL Year ended Year ended Year ended Year ended Year ended STATEMENT OF 31 Dec 2017 31 Dec 2016 31 Dec 2015 31 Dec 2014 31 Dec 2013 HIGHLIGHTS RM’000 RM’000 RM’000 RM’000 RM’000 FINANCIAL POSITON OPERATING RESULTS Revenue 1,195,672 1,289,008 1,427,693 1,506,981 1,722,943 TOTAL LIABILITIES & EQUITY (Loss)/Profit Before Taxation (605,528) (65,909) 200,068 101,441 289,981 Net (Loss)/Profit After Taxation (669,665) (69,783) 138,708 76,622 216,416 2016 Net (Loss)/Profit Attributable to Owners of the Company (650,611) (59,198) 138,717 75,528 214,165 Net (Loss)/Profit Attributable to Non-Controlling Interests (19,054) (10,585) (9) 1,094 2,251 KEY DATA OF FINANCIAL POSITION Total Assets 1,582,262 2,151,777 2,330,054 2,478,521 2,606,662 Total Borrowings 314,157 300,108 300,108 453,092 499,366 Share Capital* 1,524,735 1,109,199 1,109,199 1,109,107 1,100,529 Shareholders’ Equity** 766,650 1,461,629 1,620,655 1,592,577 1,656,429 (Loss)/Earnings Per Share (sen) (Basic)*** (58.66) (5.34) 12.51 6.83 19.62 FINANCIAL RATIOS Return on Shareholders’ Equity (%) -85% -4% 9% 5% 13% Return on Total Assets (%) -42% -3% 6% 3% 8% 51.5% Net Assets Backing Per Share (RM) 0.69 1.34 1.46 1.44 1.51 Gearing Ratio 0.41 0.20 0.18 0.28 0.30 Interest Cover Ratio (40.3) (3.9) 21.3 10.1 15.6 Dividend Per Share (sen)**** - 8.0 10.0 11.0 14.0 Number of Employees 3,919 4,149 4,236 4,171 4,654 * The Companies Act 2016, which came into effect from 31 January 2017, has repealed the Companies Act 1965. Companies Act 2016 has abolished the concept of authorised share capital and par value of share capital. Consequently, the amounts standing to the credit of the share premium account become part of MPB's share capital pursuant to transitional provisions set out in Section 618(2) of the Companies Act 2016. ** Shareholders' Equity: Share Capital + Share Premium + Other Reserves + (Accumulated Losses)/Retained Earnings *** (Loss)/Earnings Per Share (Basic): Net (loss)/profit attributable to the owners of the Company of RM650,611,000 (2016: RM59,198,000) and the weighted average number of ordinary shares in issue of 1,109,199,000 (2016: 1,109,199,000) **** Dividend per share is the total dividend declared for the respective financial year 5-YEAR GROWTH SUMMARY 19.3% 4,654 1,723 1,507 1,428 4,236 4,171 (2.8%) 4,149 1,289 4,039 1,656 1,196 1,593 1,621 1,462 13.8% Group (LBT)/PBT (RM Million) Group Net (Loss)/ 767 Profit After Tax (RM Million) 290 13.9% 2013 2014 200 2015 101 2016 2017 Group Revenue 216 2013 3.2% 2014 77 (RM Million) 2015 139 1.1% 2013 2014 2015 2016 2017 Share capital 2013 2014 66 2015 Share premium 2016 2016 2017 2017 Reserves Group Shareholders’ 2013 2014 2015 70 Trade and other payables Equity 2016 2017 (RM Million) Group Employees (No. of Employees) 606 670 CONTENTS SIMPLIFIED GROUP STATEMENT OF FINANCIAL POSITON TOTAL LIABILITIES WHO& EQUITY WE ARE TOTAL ASSETS HOW WE ARE GOVERNED 4 Corporate Profile 91 Corporate Governance Overview Statement 2016 2017 2016 2017 6 Our Milestones 109 Additional Compliance Information 9 Corporate Structure 110 Statement on Risk Management and Internal Control 10 Organisation Structure 121 Audit Committee Report 12 Snapshots of 2017 127 Risk Management Committee Report 16 Awards and Recognition 2017 29.0% 31.5% OUR NUMBERS OUR PERFORMANCE REVIEW 130 Financial Statements 20 Group Chairman’s Statement 96.4% 24 Group Managing Director’s Statement-MD&A ADDITIONAL INFORMATION 30 Review of Operations 213 Analysis of Shareholdings 54 Segmental Analysis 6.8% 216 Top 10 Properties Held by the Group 55 Statement of Value Added & Distribution of Value Added 217 Corporate Information 56 Viewership, Listenership & Readership Data 57 Share Price Chart 58 Group Financial Review AGM INFORMATION 20.3% 28.2% 219 Notice of Annual General Meeting 221 Statement Accompanying Notice of Annual General OUR COMMITMENT TO SUSTAINABILITY Meeting 60 Sustainability Report 222 Financial Calendar 75 Investor Relations 5.1% 0.9% (47.9%) • Proxy Form 2.6% 2.9% OUR LEADERSHIP • Group Directory 76 Our Board of Directors 78 Directors' Profile 14.8% 18.8% 86 Senior Management Team 28.6% 17.4% 13.0% 19.9% 2.8% 4.0% 4.7% 0.2% Share capital Borrowings PPE Inventories Share premium DeferredOUR tax liabilities Associates ODYSSEYTrade and other receivables Reserves Non-controlling interests Intangible assets Cash and bank balances Trade and other payables AsOther digital disruption takes fullDeferred form, taxwe assets at Media Prima aimOther to assets embrace the many opportunities that come with it.