Network18 Media & Investment Ltd. Q4FY21 Concall Highlights

Financial Highlights for Q4FY21:

• Consolidated revenue from operations fell by 3% YoY to Rs.1415Cr. The revenue breakup includes:
• Rs.314 cr from News Tv18- Standalone (up % YoY),
• Rs.1034 Cr from Entertainment (down 8% YoY),
• Rs.1348 cr from TV18 consolidated (down 5%)
• Rs.67 cr from Digital, print & others (up 69% YoY)
• Consolidated operating EBITDA up 24% YoY to Rs.279 Cr, Q4 Operating Margin expanded to highest ever 20%.
• Profit before tax increased by 138% YoY to Rs. 228Cr
• Net profit for the quarter increased by 242% YoY to Rs.206 Cr

Financial Highlights for FY21:

• Consolidated Operating EBITDA up 29% YoY to Rs.796 Cr despite pandemic impact dragging revenue from operations down 12% YoY to Rs.4705Cr. The revenue breakup includes:
• Rs. 1104 cr from News Tv18- Standalone (down 4%),
•  Rs.3393 Cr from Entertainment (down 16%),
• Rs.4498 Cr from Tv18 consolidated (down 13%)
• Rs.207 Cr from Digital, print & others (up 14%)
• Consolidated Annual EBITDA margins rose to 17%, the best ever inspite of COVID
• Profit before tax increased by 165% to Rs. 512Cr in FY21 over FY20.
• Net profit for the year increased by 874% to Rs.547Cr over FY20, on improved operating profitability and 33% lower interest costs.
• Group debt sharply reduced to Rs 2,414 Cr in Mar-21, from Rs 3,265 Cr in Mar-20.

Tight leash on costs, while continuing to invest into Regional and Digital

• Broad-based cost controls helped offset COVID impact and sharpened operating leverage.
• Q4 Opex was down 8% YoY despite full resumption of programming and calibrated investments into marketing/distribution in tandem with monetization opportunities.  

Operational Performance:

 Media consumption tailwinds continue; COVID increased both TV and Digital viewership

• TV viewership has settled higher above pre-pandemic levels. TV households have increased to 210 mn vs 197 mn in 2018 as per BARC, and penetration is still at 66%. TV in India, therefore, is a growing medium with further headroom.
• Digital engagement continued to grow linked to volume of high quality content and key events. Industry sources indicate a 10% YoY increase in OTT video consumption. Increased propensity to pay has been witnessed, amidst domestic OTTs increasing prices selectively; while global players create India-specific cheaper offerings.
• In India both mediums will continue to grow in parallel, across both free and pay ecosystems.  

Digital platforms taking centre stage across both News and Entertainment

• Non-fiction content continued to be the driver for stickiness on Voot, with Bigg Boss Kannada following the successful Bigg Boss Hindi. Legends Cup cricket and Carabao Cup football generated consumer traction as well as advertiser interest. The app enjoys a very loyal audience-base, with an average watchtime of >45mins/user/day.
• Pay-product Voot Select was the fastest to reach 1 mn B2C subscribers in its first year, indicating that subject-driven approach to content strategy resonates with consumers.
• Bundling of Voot with telcos, digital extensions of traditional distributors, and high-end nonmedia digital platforms continues to further enhance reach and subscribers.
• MoneyControl is the leading app for Financial News and information on markets. MoneyControl Pro continues to enhance its value proposition and subscriber base.
• News18.com has grown to India’s #2 general news destination with coverage in 13 languages, and ended a strong year by breaking-even. 

Business summary 

1. News bouquet (20 channels) is India’s largest and most diversified in scope and reach. 

• The News channel bouquet has posted strong ad-growth. Virtual events and campaigns like ‘Mission Paani’ and ‘Swabhiman Bharat’ successfully bridge the divide of commercial and social impact, and set the template for future growth. Hindi continues to be the driver of growth, while Regional losses have sharply reduced led by lagged revival of regional economies. 
• News network is fully pay unlike many of their peers. Despite competition from FTA networks, margins continued to ascend throughout FY21 in tandem with ad-revenue revival. 

2. Entertainment bouquet (Viacom18’s 34 channels + AETN18’s 2 infotainment channels) share of TV entertainment rose further to 10.9%, up sharply from a low of 9.1% in Q1.

• Hindi GECs continued to grow led by ad-revival, high-impact content and improved ratings. Deferral of key award shows was partly offset by Legends Cup cricket aired on Colors Cineplex and Voot.
• Regional channels are witnessing a steady recovery in both rankings and monetization. Kids channel grew strongly, while Youth and English continued to face genre pressures. Movie channels across Hindi and Regional are scaling up.

3. Network18 digital is #2 in digital news / information category has 175 mn unique visitors.

• Accelerated revenue growth has driven the Digital News business to a full-year break-even.
• Subscription product MoneyControl Pro and News18.com vernacular section were standout performers.
• Voot and pay products Voot Select and Kids have demonstrated strong traction, with Voot Select being the fastest to reach 1 mn B2C subscribers in its first year. 

Mr. Adil Zainulbhai, Chairman of Network18, said:

“The group has successfully dealt with the challenges posed by the COVID pandemic, and posted much improved profitability in a difficult year. The connect of our diverse brands with consumers has only grown during this period. This bears testament to our business process resilience and innovation in adversity; factors which have proved critical and will continue to remain of prime importance as we navigate any future challenges. Our plans to invest in digital growth and our resolve to excel in television remain constants amidst a dynamic business environment. ”