NZME Limited (NZM) Earnings Call Transcript & Summary

[Audio Gap] question by clicking on the, Ask a Question Box, on the online portal. I encourage shareholders joining online who do have questions relating to the business of the meeting to send their questions through as soon as possible. Please note that only shareholders, proxyholders or shareholder company representatives may vote or ask questions. So welcome, and thank you again for attending today. Shareholder value creation remains a steadfast focus of the Board. When we last addressed you at our Annual Shareholders Meeting in June 2020, the NZME share price was $0.31. As we gather today, I would note the share price at market close yesterday was $0.80. While this is pleasing progress, there's plenty more work to be done. And there are several areas that I would like to discuss with you that we, as a Board, have determined will create the ongoing delivery of continued shareholder value creation. In summary, these are: the implementation of a set of guiding principles applied to all NZME's strategic initiatives; the evolution of our business strategies set against targets to be delivered by 2023; strong capital management and a prudent dividend policy; a continual focus on Board and management expertise; growing shareholder engagement; and an effective sustainability commitment that supports our people and protects our business. I'll now talk to each of these specifically. Late in 2020, the Board shared with you a set of guiding principles to be applied to all NZME initiatives. These ensure business activity stays steadfastly focused on shareholder value creation by providing the business with a robust framework to work within. While we shared these with you in November, they are, in fact, principles that we have employed as a Board for some time. Some of you may be familiar with these already. Customer first. This recognizes that our success or failure depends on a relentless focus on always putting our customers first. Simply put, what we do for our customers must add true value to them and make NZME an indispensable part of their day. This principle is highlighted with the ongoing design and development of our OneRoof property platform. We are always enhancing the platform to ensure that we provide a service that is indispensable to real estate agents, vendors and the property market generally. The appointment of a focused executive leadership for OneRoof is only enhancing this. Win with quality. This upholds the expectation that a premium quality lens be applied to all of our strategic priorities and those initiatives engaged to support them. The ongoing success of the New Zealand Herald Premium offering shows what returns can be realized by setting a high bar in terms of NZME's content offering. Digital acceleration. This realizes that customers' expectations for more, better, faster are not diminishing. Meeting those expectations requires initiatives that add momentum to delivering a world-class digital business. We see in each of our strategic pillars that digital initiatives are drivers of future growth for NZME, with the acceleration of digital content through New Zealand Herald Premium, digital audio through iHeartRadio and digital real estate offerings through OneRoof. Audience expansion. Continued and sustained audience growth and engagement is NZME's great opportunity. Compelling quality content delivered where and how audiences dictate will deliver this growth. The Board's been enthusiastic about the implementation of the radio strategy that's focused on growing audiences across NZME's brands. On-air teams have been realigned to better suit audience demographics and brands have been developed to target unserved audiences such as Gold FM. We're also looking forward to seeing growth in the New Zealand Herald audience through a focused effort on building its brand in the South Island. We've supported more reporting resource being allocated to the South Island and the building of the news leadership team down there. Top performance. This is a guiding principle that recognizes we expect to be continually measured against global competitors as well as against the performance of the publicly listed company environment. We will continue to set new standards and benchmarks for top performance across the business. You will see shortly from Michael, the application of this principle in the growth metrics that have been applied to each of these strategic priorities. As a Board, we have ensured these targets represent and will deliver improved sustained business performance. Turning now to our 2023 strategic priorities. With our guiding principles front of mind, we have evolved our strategic priorities, setting clearly defined in measurable targets to be delivered by 2023. Michael will share further detail with you on the pillars that sit within each of these strategic priorities. In summary, by 2023, NZME is planning to be New Zealand's leading audio company. This priority recognizes the strength of NZME across this platform with a portfolio that includes New Zealand's leading radio brands and New Zealand's predominant audio digital platform in iHeartRadio. The implementation of several strategic initiatives across 2021 will target growth in audience and radio revenue market share. Our priority is for the New Zealand Herald to be New Zealand's Herald, by becoming the #1 news brand for all New Zealanders. The New Zealand Herald's position as a leading news brand has been primarily supported by its strength across the North Island. A great opportunity exists to grow audience engagement by expanding this brand's reach across the South Island through expanding news coverage and content via nzherald.co.nz and through new New Zealand NZME's premium digital paid content platform. Property is NZME's largest advertising revenue category and provides significant growth opportunities. With its growing print and digital platform content offerings, expanded listings and growing relationships with the real estate agent community, along with New Zealander's continued focus on real estate as an investment platform, by 2023, we are aiming for OneRoof to be your complete property destination. As I mentioned, Michael will share more on the pillars that support these strategies as well as the targets and metrics aligned with each of these priorities shortly. I'd now like to discuss NZME's capital management policy. As you can see from the chart provided and ongoing focus on effective capital management over recent years has resulted in a significant reduction in debt. During 2020, this maintained focus resulted in a further reduction in net debt to $33.8 million at 31 December 2020. You will also note that NZME's net debt to operating EBITDA ratio at the end of 2020 continued to be at the lower end of the target range of 0.5 to 1x rolling 12-month EBITDA pre-IFRS 16. It's the intention of the capital management policy to have debt within the business at a level of earnings that earnings and bankers support. Our 3-year priority strategy does not require significant future investment to achieve the targets that have been laid out, and we are not actively looking for large acquisitions to spend tens of millions of dollars to achieve that strategy. Having said that, if an appropriate acquisition was identified that would accelerate growth and add shareholder value, of course, the Board would assess it and bring it to shareholders, if appropriate. There may also be smaller investments or acquisitions that would allow NZME to improve and accelerate its performance in each of the 3 pillars as we proceed with those as appropriate. Turning to our dividend policy. As you will have noted from the 2020 annual report, NZME intends to pay dividends of 30% to 50% of free cash flow, subject to being within its target leverage ratio and having regard to NZME's capital requirements, ongoing operating performance and financial position. Given that the targeted financial performance that we have outlined, the leverage ratio is likely to be lower than the target range. With that in mind, and in the absence of any compelling investment opportunities, we will consider and discuss with our bankers, the opportunity to adjust potential constraints and allow excess cash to be returned to shareholders. I'd now like to talk briefly about the NZME Board. When we spoke at the 2020 ASM in June last year, we recognized the opportunity to expand our depth of experience and insight in digital innovation and data and analytics. This year, we have been pleased to welcome New Zealand tech entrepreneur, Guy Horrocks, to the Board of NZME, with Guy having returned from New York over the past year. Guy brings a background in successfully growing digital businesses, strong capability in the commercialization of data and adds to the entrepreneurial mindset of your Board. Guy is a great addition to the Board and has quickly familiarized himself with the business and is already engaged supporting each of our digital properties as they further develop their road maps and growth acceleration plans. As a team, we bring to the table extensive business strategy and leadership experience, listed company governance experience and deep media industry knowledge. We also bring extensive corporate finance capability, financial and audit experience and customer insight, marketing and brand experience. We've been very pleased over the past year to have taken the opportunity to grow our investor engagement and communication, both in terms of the detail that we share with you and the frequency that we communicate. It's been our goal that our investor community has a deeper understanding of the inner workings of NZME and that through greater shareholder engagement, we can gain a better understanding of your perspectives on shareholder value creation. In 2020, we introduced an Investor Day to give our shareholders the opportunity to obtain a deeper insight into the initiatives delivered across the business, which support delivery against the strategic priorities. This included an opportunity to discuss progress directly with the NZME executives responsible for delivering on each priority. Focusing on delivering investors a deeper understanding of business performance, we have developed and delivered a divisional framework to allocate the various cost pools in operating business performance across each division. As I mentioned previously, Michael will share with you the detail on the specific targets and metrics which will ensure that NZME is operating with the ambition, accuracy and pace that we, as a Board, are committed to, through the guiding principles that I have shared with you. I'd now like to turn to NZME's sustainability commitment. As we outlined in our 2020 full year annual report, NZME is at the early stages of its sustainability plan. And we're looking forward to the ongoing development of an extensive range of initiatives that will ensure we have meaningful, sustainable practices supporting the well-being of our people, the wider community and the environment. I'd like for a moment to focus on our commitment to our people. If the COVID-19 pandemic has proven one thing, it's the value of providing a workplace that fosters innovation, engagement and inclusion. This approach meant NZME's people and leadership teams were able to transition swiftly to new modes of operating under the COVID-19 environment, ensuring productivity was maintained, opportunities explored and initiatives executed. As we have acknowledged, along with the support of NZME's suppliers, business partners and advertisers, our 2020 financial result was made possible, thanks to the dedication of our people. Promoting a healthy, diverse and safe workplace is an ongoing commitment and one the executive and leadership teams remain focused on. Attracting the best talent by maintaining NZME's position as an employer of choice in the media industry is key to delivering on our strategic priorities. It's therefore pleasing to note that NZME was recently recognized as the most popular media and communications company with New Zealand university graduates. In the interests of being open with you, we wish to inform you that we have 2 matters before the New Zealand market's disciplinary tribunal. These matters relate to disclosures made to the market in May 2020 regarding the Stuff negotiations, and in June 2020, regarding Peter Cullinane's resignation. This Board takes its obligations and responsibilities around continuous disclosure extremely seriously. At all times, we strive to ensure the market is appropriately informed and in a timely fashion. The disclosures do not relate to ongoing matters. We followed specialist external legal advice at the time the disclosures were made. We are focused on managing and resolving these matters in the best interests of the company. Details of the matters and the outcomes will be released as soon as the regulatory process is concluded. The outcome is not expected to materially impact the business financially. Before I hand over to Michael, I'd like to make some brief observations regarding NZME's response to COVID-19 and share some perspectives on the months and indeed the years ahead. NZME's swift and people -- purposeful first response to the impacts of COVID-19 meant our audiences remained well served, and commercial partners and advertisers continued to reach their audiences. Business continuity plans were deployed and NZME was able to operate effectively and confidently delivered on its responsibilities as an essential service keeping audiences informed and safe. All of this contributed to NZME maintaining the momentum required to respond swiftly to and support the COVID-19 recovery that New Zealand and many of our commercial partners and advertisers are now experiencing. The pace and strength of the domestic recovery to COVID-19 has been pleasing. And we expect this to continue as the vaccine rollout gains momentum, and as New Zealand's commercial and small business sectors gain the confidence that further disruption in economic activity due to COVID-19 lockdowns will be limited and localized. However, the economy is still in the rebuild phase. And as such, resilience to the impact of other influencers, such as government policy changes and supply chain disruptions remains challenged for now. Again, we remain positive that the vaccination rollout and the gradual opening of borders to international travel will add impetus to the economic recovery and ongoing growth in advertiser confidence. I'll now hand you over to our CEO, Michael Boggs.

Thank you, Barbara. And I, too, would like to welcome you all to NZME's 2020 Annual Shareholders Meeting. And to those of you in the room, welcome, and those globally right around the world. Before I start, I'd like to thank all NZME shareholders for your ongoing support and your commitment during what's been an incredibly tumultuous and an uncertain time over the last year. I'd like to begin with an overview of New Zealand Media and Entertainment as it was at 31 December 2020. Across our 32 print publications, our 9 radio networks, our 17 websites, our 19 real estate publications, NZME reaches 3.3 million New Zealanders. NZME is a prominent player in the New Zealand media market with leading and growing brands across each of the sectors that we present in. The New Zealand Herald is the powerhouse of our news portfolio. It's read by 1.2 million kiwis each week. Its digital arm, nzherald.co.nz, is New Zealand's #1 New Zealand news provider. New Zealand Herald premium boasts 102,000 digital new subscribers. In radio, the ZM music brand has the #1 breakfast show with 25 to 54 year olds, while NewstalkZB leads the talk market with New Zealand's #1 breakfast show. OneRoof is delivering excellent growth, boasting 89% of residential-for-sale listings nationwide. And we have 2.6 million users engaging with our digital platforms every month. As you'll see, all of this makes NZME New Zealand's preeminent audience and customer-centric multichannel media business. I'd now like to share with you a summary of our 2020 annual results. Despite the challenges and the disruptions brought out by COVID-19, NZME returned a net profit after tax of $14.2 million and an operating EBITDA of $67.3 million. Adjusted for the impairment in 2019, 2020 statutory impact is up 45%. As I mentioned in our annual results presentation, this was achieved through a determined focus on our strategic priorities, alongside a swift and purposeful response to the challenges posed by COVID-19 across much of 2020. Operating revenue gives the best illustration of the impact of COVID-19, and you'll see that's down 11% year-on-year. During the month of April 2020, total advertising revenues were down 47% year-on-year, and they are only recovered in the last 2 months of 2020. The impacts of the pandemic were also offset by a 14% reduction in our operating cost base. We expect that this will deliver an ongoing annual cost reduction of $20 million. I'd also like to draw your attention to the significant reduction in net debt of $40.9 million. This brings net debt to $33.8 million at 31 December 2020. As Barbara mentioned, we have retuned our strategy with a clear focus on digital transformation and an emphasis on delivering to a set of well-defined targets together with specific metrics, the attaining of which will determine success for NZME through to 2023. Let me take you through each of these now. Our strategic priority to be New Zealand's leading audio company will be supported by 3 pillars. These focus on: creating New Zealand's best local audio content; growing broadcast and digital audience reach; and growing our market revenue share and digital revenue. We will target both growth and audience and radio revenue share, alongside growth of digital audio revenue as a percentage of our total audio revenue. You'll see we're targeting a lift in audio's EBITDA margin from 14% in 2020 to our target of between 15% and 17% by 2023. We completed a significant repositioning of our radio brands and our talent in mid-2020. This included the launch of new radio brands, Gold and Gold AM. We still have a range of initiatives here to grow the 10+ audience market share with a focus on the key 25 to 54 demographic and also realizing regional opportunities to increase our overall revenue share. In terms of digital audio, revenue initiatives include leading the industry and digital audio monetization. This is supported by the appointment of a Head of Digital Audio, a role that started with us in February of this year. While we won't have an updated audience metric until later this month, we are pleased with our ongoing revenue market share growth, which is currently delivering on our annual target of at least 1 share point growth per annum. Our publishing strategy to create New Zealand Herald is supported also by 3 pillars. These include: the New Zealand Herald being the #1 news brand for all New Zealanders; a subscriber-first focus; and for the New Zealand Herald to be a safe, scalable destination for advertisers. Now the targets here are focused on subscription but growth, both in terms of volume and the volume mix, with the aim of an overall subscription volume target increasing to 210,000 subscribers by the end of 2023. At this point, this would give NZME more than 12% of New Zealand households subscribing to NZME across our digital and our print platforms. An important feature of our publishing strategy is the growth and the share of our digital revenue and the advertising revenue mix, up from 42% achieved in 2020 and we're targeting more than 45% digital revenue by 2023. We're targeting publishing to hold its EBITDA margin through to 2023. Now our 2021 initiatives here include: growing local and national audience engagement through more community connections and reader personalization; building business, political and investigative journalism; and increasing the use of our authenticated audience and customer data across the whole NZME network. I'm pleased that right now, we continue to see strong growth in the New Zealand Herald premium proposition. We now have over 110,000 subscribers accessing the service, including over 60,000 paying digital subscribers. That's up from the 53,000 that we had at the end of December 2020. This is well on track to achieving the 2021 subscriber goals set as part of our 2023 strategy. Our third pillar as we evolved our OneRoof strategy with a determined focus on being your complete property destination. The 3 targets is a focus on: strengthening the core residential listings business; being indispensable to agents; and by expanding the OneRoof portfolio. OneRoof's 2020 achievement delivered residential-for-sale listings at 89% share of the market. We're targeting 100% share by 2023. 9% of those listings had an upgrade in 2020. We're targeting to lift that to 50% by 2023. We're also targeting digital revenue to surpass print revenue from OneRoof by 2023. Along with audience growth, we expect achieving these targets will deliver operating OneRoof EBITDA margin of between 15% and 25%. Among the initiatives supporting this growth across 2021, including the appointment of Paul Maher as OneRoof's dedicated executive leader, will continue to grow solid agency relationships that will build listings coverage and provide a suite of products that provide sale -- scale and relevancy to deliver result for vendors and for our advertisers. We have very strong growth aspirations for OneRoof, as is evidenced by these metrics. I'm pleased to report that the OneRoof digital platform has achieved year-on-year growth of over 95% for the first quarter of 2021. These specific targets and metrics associated with each provides a dedicated focus for your executive team. That's this great team you see sitting in the front row here in this room. We've continued to ensure the NZME senior leaders retain the most appropriate mix of skills and experience, and that we remain responsive to effectively deliver on our strategic priorities. With this in mind and just noted, in February this year, we were pleased to welcome Paul Maher to the executive as Chief of OneRoof. Paul, why don't you stand up and give a little wave for everyone in the room and around the world. Ensuring OneRoof has dedicated elective -- executive leadership and ownership is vital to the ongoing development of the strategic priority to ensure it delivers on the targets that we have set. I'd now like to take the opportunity to update you on progress regarding moves to ensure that large multinational digital media platforms fairly compensate New Zealand-based news media for the content that they currently access for free and then monetize. Now our observations of overseas jurisdictions where this issue is being dealt with, is that meaningful engagement is usually only experienced when governments signal an intent to impose change through regulation or even as an Australia's case, legislation. Many of you may have noted, as we have with interest, that Minister Faafoi as recently as last month, has publicly encouraged global digital platforms to begin meaningful discussions with companies such as NZME. We're really looking forward to working on this issue with all parties in New Zealand, including Google, Facebook, the New Zealand government, and our fellow news media industry players. Let me now update you on our current trading conditions. It's pleasing to note that we saw a solid improvement in advertiser spend at the end of last year where we saw a tangible lift in business confidence. The global economic reality remains one of some uncertainty with the ongoing effects of COVID-19 impacting market dynamics. And the business confidence monitors have been variable in recent months. After a strong finish in 2020, trading in the first quarter of 2021 made a slower start with real estate requiring less marketing and a number of international travel providers only recently recommencing their advertising. Despite these challenges, pleasingly, March 2021 delivered advertising revenues on par with those that we saw in March 2019. Our focus remains on being able to deliver this performance on a consistent basis during this year. Based on the continued recovery of revenue and the permanent cost reductions that we made during 2020, we continue to expect profit growth for 2021. The process to divest GrabOne is well advanced with ongoing interest from potential purchases. As Barbara has outlined, given that net debt is expected to continue to reduce, and based on this outlook and NZME's capital requirements, the Board continues to expect to pay an interim dividend for 2021 in the second half of this year. This concludes my address. I look forward to discussing any questions you have before the conclusion of today's meeting. Before I hand back to Barbara, though, I'd like to thank the entire NZME team of 1,200 people for their commitment to delivering for our audience, our customers and for you, our shareholders, over this last year. I'd like to share with you a short video that captures much of what we mean when we describe NZME as an audience and customer-centric multichannel business and the talented team that creates, sells and supports this content every single day. NZME's 2020 election night coverage was a convergence of the best of our radio, our print and our digital journalism with breaking and developing election coverage delivered across all of our platforms. Journalists in our regional newsrooms teamed up with our metropolitan-based news teams and our roving political journalists to ensure that all New Zealanders, regardless of where they were in New Zealand or around the world, could stay up-to-date with our coverage. This content was also channeled into a video show live streamed on our nzherald.co.nz platform. We had some phenomenal results. This all built up to an impressive 7.9 million page views on nzherald.co.nz on the day after the election. That was following the day of the election's 7.2 million page views. These are some of the biggest single event audience numbers on the site's history. This is NZME on election night 2020. Thank you. [Presentation]

Thank you, Michael. We now come to the formal part of the meeting, matters requiring resolution, which are set out in the Notice of Meeting. I will call a poll in respect of all these resolutions. As I explained at the beginning of our meeting, shareholders on Link's virtual meeting platform will be able to cast their vote using the electronic voting card received when online registration is validated. To vote, you will need to click, Get Voting Card, within the online meeting platform. You will then be asked to enter your shareholder or proxy number to validate. Please then mark your voting card in the way you wish to vote by clicking for, against or abstain on the voting card. Once you have made your selection, please click, Submit Vote, on the bottom of the card to lodge your vote. Please refer to the virtual meeting online portal guide or use the helpline specified if you require assistance. Voting will remain open until 5 minutes after the conclusion of the meeting. Shareholders may ask questions after each formal item has been put forward to the meeting. Questions raised by those in attendance will be answered first. Please come to the microphone at the appropriate time and ask your question. Please clearly state your name and confirm you are a shareholder before asking your question. We will then move to any questions pertaining to that matter that have been submitted online. [Operator Instructions] Each resolution set out in the Notice of Meeting is to be considered as an ordinary resolution, and as such, may be approved by a simple majority of votes cast by shareholders entitled to vote and voting on the resolution. Resolution #1 concerns the reelection of Carol Campbell. It is hereby resolved, as an ordinary resolution, that Carol Campbell, who retires by rotation and is eligible for reelection, be reelected as a Director of NZME. The Board recommends Carol to you as an NZME Director and unanimously supports her reelection. I'll now invite Carol to come to the podium and say a few words in support of her reelection.

Thanks, Barbara, and good afternoon, everyone. It's nice to have people with us this time as well as having online shareholders. It was quite a bit different last year when I was just talking to a television camera. I won't go through my bio because it's already in the Notice of Meeting, but I think a lot of you know me. I have been on the Board since 2016, and I was here at the time of the demerger and the listing on the NZ Exchange, which was really exciting. I bring to the Board both my financial skills and my governance experience, and I chair the Audit and Risk Committee at NZME. As you've heard today, we certainly had some challenges through 2020. And as a Board and company, we really worked hard, and I'm really proud with what we have achieved as a result of that hard work that has paid off. And I assure you, I will continue to work tirelessly through 2021 to implement the course that we have set. You've heard, we've got some great opportunities, and there will be challenges on the way, but we're a great company, and I'm confident with the strong Board and management that we have, we are well positioned to take on 2021. I hope that you will support my reelection as a Director of NZME. Thank you.

Thank you, Carol. I now move as an ordinary resolution that Carol Campbell, who stands for reelection before the end of her term and is eligible for reelection, be reelected as a Director of NZME. Before we move to the vote, are there any questions from the floor for the Board concerning this resolution? If you do have a question, please come to the microphone at the front of the room. Please clearly state your name and confirm that you are an NZME shareholder. Are there any questions, [ Alan ]?

[indiscernible]

Step closer.

My name is [ Alan Best ] and I am representing 13 shareholders. Is it going? [Technical Difficulty]

And I guess my answer is that, firstly, I was a chartered accountant in a very large accounting practice for a long time, and I take my public company Director role as a full-time director role. I have no Chair appointments, and I don't intend to take any Chair appointments. I have removed a lot of my private company commitments. And also, as you all know, charities, I was Chair of a charity for a long time, and all charities do take a lot of time. So I feel I've never missed a Board meeting. I have never turned up at a Board meeting not prepared. I always read all my Board papers, and I'm comfortable that I do not have an extensive workload beyond what I can cope with, and I do not intend to take on any more directorships.

Are there any questions from online, Cliff?

There are no questions on this matter from shareholders online, Barbara.

Thank you very much. There appears to be no further discussion on this matter. So please now select either for, against or abstain for resolution 1 on the voting card. [Voting]

Resolution #2 concerns the reelection of David Gibson. It's hereby resolved, as an ordinary resolution, that David Gibson, who retires by rotation and is eligible for reelection, be reelected as a Director of NZME. The Board recommends David to you as an NZME Director and unanimously supports his reelection. I will now invite David to come to the podium to say a few words in support of his election.

Thank you, Barbara, and good afternoon, shareholders. I was appointed a Director of NZME in December 2017. So it's just been over 3 years that I've been on the Board. And as a company, we have navigated some very choppy water over the last 3 years. And I think this -- I think that we've come through this period as a much stronger company. I'd like to acknowledge the work and support of Michael and the management team, my fellow Board members and also, the incredibly strong support that we've enjoyed from you as shareholders along this journey. We also realize, as Barbara mentioned, that there is much more for us to do to realize the full digital potential of the company. Also the COVID gale, although abated, is not yet over. With your support, I'm keen to continue, and I feel that I have the skills that can add value to the course ahead. I'm particularly focused on strategy, including delivery of the strategic pillars that we communicated to you today in improving our financial performance and returns to shareholders. If we do this well, and ultimately, that will be captured in the barometer of our share price. It is also important as your representatives, we listen carefully to your views, and so we invite you to continue to communicate with us on the things that you think we can improve on. And so with these comments, I put myself forward for reelection.

Thank you, David. I now move as an ordinary resolution that David Gibson, who stands for reelection before the end of his term and is eligible for reelection, be reelected as a Director of NZME. Before we move to the vote, are there any questions from the floor for the Board concerning this resolution? Thank you. Are there any questions online concerning this resolution?

There are no questions on this matter from shareholders joining online, Barbara.

Thank you. As there appears to be no further discussion, would you please now select either for, against or abstain for resolution #2 on the voting card? [Voting]

Resolution #3 concerns the election of Guy Horrocks. It's hereby resolved, as an ordinary resolution, that Guy Horrocks, who was appointed as a Director by the Board after the last annual shareholders meeting with effect from 8 February 2021, be elected as a Director of NZME. The Board recommends Guy to you as an NZME Director and unanimously supports his election. I will now invite Guy to come to the podium to say a few words in support of his election.

Thanks, Barbara. Thanks, everyone, and very grateful to be here today as the newest Board member of NZME. My name is Guy Horrocks. I'm a technology entrepreneur, who's been living in New York for most of the last 10 years. I've worked leading 5 different start-ups from a diverse range of blood spatter analysis, not hugely applicable to NZME, mobile data, personalization, marketing automation and most recently, in data warehousing and analysis. This journey has been very fun for me. Have launched over 100 mobile applications and worked with a lot of great companies like CNN and Washington Post, Expedia. And my most recent experience with Sailthru, we had 2 billion users on our platform doing personalization and marketing automation. I've been very fortunate to meet a lot of the exec team, and they've been generous with their time over the last couple of weeks, and having seen the sort of inner workings of a lot of Fortune 500s and start-ups in the states, I've been very impressed with the core digital team. And I think NZME is actually ahead of a lot of large U.S. companies with higher profiles, which is very encouraging, I think, for our future. And I'm also very excited to join at a time where there's still a lot of digital transformation. My role, I see as championing data technology and hopefully, a more start-up approach to business. And I hope that you will support my reelection to the Board. Thank you.

Thank you, Guy. Before we move to the vote, are there any questions from the floor for the Board concerning this resolution? Is there any discussion on this resolution from online?

There are no questions on this matter from shareholders joining online, Barbara.

Thank you very much. So as there are no questions, would you please now select either for, against or abstain for resolution 3 on the voting card? Thank you. [Voting]

I'll now turn to matters relating to the company's auditors. The motion concerns the fixing of the auditor's remuneration. It is hereby resolved, as an ordinary resolution, that the directors of NZME are authorized to fix the auditor's remuneration. Before we move to the vote, are there any questions from the floor for the Board concerning this resolution. Is there any question or discussion on this resolution from online?

There are no questions online, Barbara.

Thank you. As there appears to be no questions on this matter, please now select either for, against or abstain for resolution 4 on the voting card. [Voting]

Thank you very much. I would now like to give shareholders the opportunity to ask questions. Any questions must be related to today's presentations, financial statements or the management of the company. You can continue to provide questions online and we'll also address questions already submitted online. We will allow 20 minutes for questions. If we run short of time and are unable to answer your question on -- or online question today, we will endeavor to respond to you after the meeting. We will now move to any questions from the floor. If you do have a question, please come to the microphone at the front of the room, clearly state your name, confirm you are an NZME shareholder and then ask your question. Are there any questions?

My name is Dita De Boni, I am a proxy shareholder for Tim Hunter. I'd just like to ask about Stuff and NZ Herald online. Both companies say they have the top online offering, so how do we discern which one is actually the most viewed and the most used? And the other one I'd like to ask is why were journalists not allowed to come today to this meeting, please?

Thank you very much, Dita. Maybe, Michael, could you pick up on that, please?

Thanks, Dita, for the question. As you all know, we use Nielsen for tracking our overall stats and have done for many, many years, and that is consistently said over the last 6 or 7 months that New Zealand Herald is larger than Stuff. At about that time, Stuff did move to other providers and using other metrics. We continue to use Nielsen. And with regards to journalists, I guess we've said journalists are absolutely available online to be able to access the meeting. But obviously, this is a meeting for shareholders.

Thanks, Michael. Any other questions from the floor? [ Alan ]?

[ Alan Best ] again. I was really worried about the huge write run last year, and I have to apologize that I was unable to attend the meeting. I'm actually a shareholder as well as representing other members of the association. And though it was in last year's books, the relevances sort of carries on. The auditors have said that there were no matters to report and -- but they did outline as a key audit matter in this year's report. So it's important that we know how it's tracking. You wrote that massive amount down last year. You've still got those key brands. They're wonderful brands, I have to say. I fully support them and myself. And I just wonder whether the valuation is revealing that you may have gone a little bit far. And if so, what action can be taken?

Thanks very much, [ Alan ]. As this is quite a technical question, I might, if you don't mind, pass to our CFO, David Mackrell, to help us answer. Thank you.

Thanks. So in 2019, each year, we are required by the standards to review and consider the value of our intangible assets. We have a number of intangible assets. And in 2019, we had around $275 million, which was a combination of goodwill and various brand assets. So a normal part of the process is to reflect on how -- on the value of those assets. And it's a process we go through looking at the future potential. As a result of that process in 2019, we wrote down the assets by $175 million. That included writing off all of the goodwill and some of the brand assets. What we're left with was just over $100 million of brand assets as intangibles And again, in 2020, as we're required to, we continue to and repeated that assessment of the value of those assets. And that review as part of the 2020 accounts resulted in no change to the value that was recorded in the accounts. That's a normal process, and we've continued to improve the results of the business. But those assets still stand at that value. There is a technical matter that the goodwill can't be written up once it's written down. So -- whereas the brand assets, should that assessment change, there is the potential to write it up.

Thank you, David. Are there any other questions from the floor? Hello. Thank you.

Karen [indiscernible] shareholder. I love my Herald every morning. I love premium online. It has changed a lot over the years since I first started getting it. God bless Harvey Norman for the revenue that he brings to our table, and it's very easy to peel it off to get to the Herald underneath. Not so easy to get rid of photographs of Mike Hosking. Through the Herald, I think he's overexposed and overpromoted, and it's gone to his head. I like watching Duncan Garner in the morning. And his interviewing technique, he will tease out the information so much more kindly and nicely and still get what he wants without being abrasive. Just going back to the content, I miss Bernard Orsman. Bernard Orsman used to go to council, and you'd get the facts of what they were -- especially the dumb things they were doing, and it would all be laid out. Whereas, Simon Wilson, and I know people write in and say that they love his articles, but it's very much biased opinion towards sort of greeny bike riding and walking in this loony-like rail that's come back into play. I would like more factual reporting rather than just biased opinion.

Thank you very much.

Apart from that, I still love my Herald.

Well, we love it that you love the Herald. And the editor of NZME is sitting here, so he will have appreciated that. I'm not entirely sure I picked up the question on what you're saying, but we'll make sure your feedback goes through to my Mike Hosking, he's probably listening anyway. So thank you very much for that. Michael, did you want to add anything? No? Okay. Well, no. And actually, this gives us evidence that there's a diversity of thought around readership as well as the diversity of thought around the content and what we as a Board think. So it's great actually that you enjoy some parts and other parts might rankle a bit. That's probably part of actually putting out quite a balanced news and entertainment offering that we have. So thank you very much for your comments, which we do take on board. Are there any other questions from the audience? Are there any questions online, cliff?

Yes, Barbara. We have one question in general business from a shareholder joining us online. It's from [ Kaushik Patel ]. The question is, can we have the debt position on 31/03/2021 and update from 31/12/2020, please?

Michael?

Thank you for the question. The updated debt position isn't something we were planning on releasing. But I can -- what I can say is, as you would expect, as the business continues to produce positive operating results, just like where as you will have seen in our outlook, we continue to expect based on the conditions continuing and improving to see an improved profitability for this year over last. We are seeing debt reduction in the business overall. One thing I probably just would make sure that everyone considers, though, is as we see our revenues increase, which, as you would have heard me talk about, our March revenue this year is on par with March of 2019, so significantly higher than March of 2020, that does mean that some of the cash does get consumed in working capital. So we just need to continue to monitor our overall cash position from that, but expect continued reductions in debt as we are seeing.

Thank you. Are there any other online questions?

There are no further online questions, Barbara.

Thank you very much. Well, I think we've come to nearly the conclusion of the meeting. In closing, I'd like to, on behalf of the Board and the NZME executive team, I'd like to thank you for attending our annual shareholders' meeting today. As always, your participation and your feedback is greatly valued. While we continue to strive to ensure that NZME is a great and safe place for our employees to work and the best place for our audiences to be informed and entertained, we remained focused on the pursuit of improved and sustainable returns for shareholders. Thank you again to my fellow Board members, executives, and all our employees for your dedication and hard work and to our shareholders for your continued support. I now declare the meeting closed. Thank you.