2015 SWM Annual Report

ABN 91 053 480 845 Delivering the future of content. Anywhere. Any screen. Anytime. Annual Report 2015 Seven West Media cares about the environment. By printing 2000 copies of this Annual Report on ecoStar Silk and ecoStar Offset the environmental impact was reduced by*: 1,185kg 171kg 1,707km of landfill of CO2 and travel in the average greenhouse gases European car 26,982 2,486kWh 1,926kg litres of water of energy of wood Source: European BREF data (virgin fibre paper). Carbon footprint data evaluated by Labelia Conseil in accordance with the Bilan Carbone® methodology. Results are obtained according to technical information and are subject to modification. *compared to a non-recycled paper. Delivering the future of content. Anywhere. Any screen. Anytime. Annual Report 2015 Contents What We Do 4 The Future of Us 44 Our Brands 6 Board of Directors 46 Our Strategy 8 Corporate Governance Statement 49 Our Strategic Framework 10 Directors’ Report 60 Letter from the Chairman 12 Remuneration Report 64 Letter from the Managing Director & CEO 14 Auditor’s Independence Declaration 83 Performance Dashboard 16 Financial Statements 84 Performance of the Business 18 Directors’ Declaration 134 Group Performance 20 Independent Auditor’s Report 135 Television 26 Company Information 137 Newspapers 32 Investor Information 138 Magazines 36 Shareholder Information 139 Other Business and New Ventures 40 Risk, Environment and Social Responsibility 42 2 Seven West Media Annual Report 2015 ABN 91 053 480 845 Contents The right people creating great content across television, digital, mobile and newspaper and magazine publishing. Delivering the future of content 3 What We Do We are achieving growth in the delivery of our content across our portfolio of integrated media platforms. Seven Network 14.9 million national average weekly reach Newspapers 1.7 million consumers across print and online every month Magazines 17.1 million audience touchpoints Yahoo7 12.9 million monthly unique users 4 What We Do My Kitchen Rules is the biggest programme on television and dominates the media landscape. 4.5 million viewers across Australia watch this year’s Final. Hosts of Seven’s My Kitchen Rules, Manu Feildel and Pete Evans Delivering the future of content 5 Our Brands Seven West Media is Australia’s leading multiple platform media company with a market-leading presence in broadcast television, magazine and newspaper publishing and online. We are a content company Our media businesses Seven West Media is creating more content Television: Our objective in television is clear. now than at any time in our history and we Build on our leadership and our trusted brand to are expanding our presence globally. We are deliver market-leading audience, revenue share a driving force in the development, creation and margins. Our expertise in content creation and delivery of premium content that resonates and curation and our dominant sports portfolio with Australians and international audiences. create the leverage to bring Australians together. This is our competitive advantage and will be As new forms of content delivery fragment the the key to long term success in the changing market, television will continue to be at the centre media landscape. of mass audience reach. We believe reaching that mass audience will only become more We deliver a market-leading presence in television, valuable in a fragmenting world. magazines, newspapers and online. We deliver audiences. We operate in a competitive market Recognising this fragmentation of audiences place with changing media consumption habits, and changes in viewing consumption, we have but what differentiates us is our content and extended our content onto new platforms with our ability to distribute that content across any new delivery models. Our content window medium and device. strategy now extends beyond the linear television experience to the premium on demand Many of Australia’s most respected media subscription service. With Foxtel we have businesses are in our portfolio – The Seven brought consumers Presto. The partnership Network, Pacific Magazines, The West Australian, brings together Foxtel’s strengths in subscription Yahoo7 and Presto. And we are the home of television and its niche content offering with many of the biggest content brands including our strength in local content creation, curation My Kitchen Rules, House Rules, The X Factor, and broadcast. Home and Away, Sunrise, the Australian Football League, the Olympic Games, Better Homes and We have also extended our content onto Gardens, New Idea, marie claire, Who, The West ‘Hybrid TV’ which fuses broadcast and online Australian and PLUS7. connectivity for content delivery. Hybrid TV will, over the coming decade, redefine how We own and are extending the media value chain our content and brands engage with audiences beyond the traditional business models. We are and build 1:1 relationships with them. using these new integrated business models and leveraging our strong partnerships to understand Publishing: Our core objective is to lead in the audiences across platforms, create content creation and dissemination of content relevant that resonates and then monetise that content to Australians. This is central to our ongoing through integrated client focused sales solutions. development of our publishing business and We reach audiences everywhere and we brands. Newspapers and magazines are allow our clients to speak to those audiences. absolutely relevant today and into the future. Our titles are out-performing their peers in readership and circulation, we are building share, and we are being reactive to the changing landscape. Our magazine brands are transitioning beyond print into Social Media, Digital Video, eCommerce and live events. The personification of our brands via digital speaks to the 1:1 relationship we are creating with our readers. 6 Seven West Media Limited Annual Report 2015 ABN 91 053 480 845 What We Do | Our Brands – Australia’s #1 FTA Television Network – #1 Newspaper in WA – Yahoo7 has 12.9 million unique users for 9th year in a row – 20 Regional publications across WA – One of Australia’s leading – Leading content production company – 71% of West Australians read The West online platforms in Australia Australian or visit thewest.com.au – #1 TV destination with PLUS7 – 10 of the top 20 regular primary programs – Over 130 million streams in FY15 – Live streaming – 50% of 7Wonder – 50% of 7Beyond Other Businesses – Second largest magazine publisher in – Launched Presto SVOD Service in 3Q15 – Nine radio stations across regional WA Australia with a portfolio of leading titles – 50/50 joint venture with Foxtel – 33.3% of SkyNews – Magazines reach 8.1 million people – Premium domestic and international – 33.3% of OzTam aged 14+per month content offering – 33.3% of TX Australia – Better Homes and Gardens #1 consumer – 49.9% of Community Newspaper Group paid magazine in Australia – 36.4% of Nabo – Over 20 publications – 27.0% of Health Engine – Leading titles in ‘Home & Lifestyle’, ‘Fashion’and ‘Men’s Lifestyle’ The West Australian newsroom is now co-located agile and responsive to the changing media with Seven Perth creating an engine room for landscape. Yahoo7 is this home of PLUS7, our news. Our news team’s digital offering is growing market-leading catch-up television service. Catch- and its unique voice and point of difference is up television provides our audiences with greater being articulated on thewest.com.au. access to our content and digital exclusives and our clients with a highly targeted environment The power and delivery of brands such as The to get their marketing messages across to West Australian, Better Homes and Gardens and consumers. Yahoo7 and our social media New Idea is second to none, especially for our properties also provide the platforms for ongoing clients and consumers who want trusted, brand- 1:1 conversations and a fully flexible personalised safe sources of information and entertainment. experience with our television and print brands. Digital: We are growing, integrating and Content is the lifeblood of all our business and investing in digital. Yahoo7 is one of Australia’s it is content that will “future proof” our business. most popular online destinations and provides That is why we continue to invest in content and another window to monetise content created in why we strive to make Seven West Media the the TV and publishing businesses. Yahoo7 also home of the most creative people and ideas. provides us with the best and brightest digital Our content is king and our delivery platforms and talent, technology and a space to be strategically integrated sales solutions are the king makers. Delivering the future of content 7 Our Strategy Build on our leadership, invest in our future, redefine our operating model and fuel new growth that will underpin our future. Producing more than 700 hours of Australian programmes Partners with Foxtel to deliver Subscription Video on Demand Complete co-location of news at The West 8 Our Strategy We lead in content creation. We are also first and foremost an audience company. We deliver audiences. We are a mass audience company. We are a 1:1 audience company. Cameron Ling, a key specialist commentator for AFL on Seven. Seven is building a major online and digital presence in the delivery of sports content beyond broadcast television. Delivering the future of content 9 Our Strategic Framework Content continues to be at the core of our business, and as the market for premium content continues to grow, Seven West Media is uniquely positioned to take advantage of that trend. Consumers continue to seek content through our Our strategy is based on the three pillars traditional broadcast and publishing channels. we first outlined in 2013: In addition, consumption of online content in the home and on the move is increasing. This trend – Maintaining leadership in our businesses. is being driven relentlessly by improvements to We will accomplish this wherever possible, fixed and mobile networks and by the growth and through content we own or control.

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