Q1 2020 Earnings Call

Media will be on a listen only basis and at this time I would like to turn the conference over to Michael flooring. Please go ahead.

Thank you very much Eduardo Hello, everyone and welcome to news Corp. fiscal first quarter 2020 earnings call. We issued our earnings press release about an hour ago and now posted on our website at news Corp. Dot com on the call to your Robert Thompson, Chief Executive and Susan for New Cho, Chief Financial Officer, we, albeit with some prepared remarks and I'll be happy to take questions from.

The investment community. This call may contain certain forward looking information with respect to news parts business and strategy actual results could differ materially from what is sad news corp's Form 10-K , and Form 10-Q filings identify risks and uncertainties that could cause actual results to differ and contain cautionary statements regarding forward looking information. Additionally, this call will.

Includes certain non-GAAP financial measurements, such as total segment EBITDA adjusted segment EBITDA and adjusted heap, Yes, the definitions and GAAP to non-GAAP reconciliations of such measures can be found in our earnings release with that I'll pass it over to Robert Thompson for some opening comments.

Thanks, Mike.

In the first quarter fiscal 2020 news coal showed strong growth the Dow Jones and higher revenues. It moves operator, I really don't call. The company also faced challenges from pronounced currency headwinds a sluggish as dragon economy in particular struggling strike property market as long as difficult comparisons with prior year.

Onetime revenue argument, a non cash impairment charge in this quarter.

For the quarter.

The company reported total revenues of $2.34 billion, we title segment EBITDA of 221 million.

This represents a decline of 7% in revenues and 38% in profitability versus the prior year.

The revenue declined 3% was directly attributable to currency.

And 2% to a onetime cash payment last year by type core in the UK.

Before getting into the finer details of the quarter by segment I want to address a significant development that bodes well for our future prospects.

There has been a fundamental change into content landscape.

Over a decade Newschool has led the international debate in seeking fan returns for our high quality content from the digital platforms clearly the dominant digital platforms are under intense and continuing regulatory scrutiny on issues such as privacy and in APAC advertising market that has however, we.

On a substantial development with Facebooks decision to pay a significant premium for out premium journalism at the WSJ and beyond.

This does using begins to change the content equation.

And we expect a positive impact on financials at a news and information services segment over the long term beginning this fiscal year.

The Facebook deal complements the agreement we reach with Apple in March when the Wall Street Journal, We Kinda launch partner, Apple News, plus which expanded the reach of the journal and its journalism to new audiences, our brands and outcomes and obviously benefit from the marketing region proud west of a partner which has nearly.

199 million finds in the.

1.4 billion devices globally.

We expect the sectoral shift in the value of digital content. She has significant implications for investors and our bottom line.

And let us be clear these unprecedented changes in the publishing industry would not have been achieved without the determination of rule could unlock the murdoch any unwavering support of the New School Board, which has taken a long term principled stand on the need to change the digital ecosystem.

Other publishers around the world should feel free to send US a commission for services rendered.

I'd now like another development worth highlighting is the ongoing simplification of New school. As you are aware, we have put our news America marketing business under strategic review and in discussions regarding a possible side of that business. We expect to update you inject tools.

Consistent with that theme of simplification, we have our unruly attic business under strategic view and also in discussions about a potential style.

We have learned much from the very talented team at unruly and those lessons will inform our business for many many years to come.

With simplification being an ongoing process. The company will continue to review its structure with the aim of bringing extra focus to our key assets, allowing investors to have a far clearer view of their prospects.

Let me turn to the news and information services segment in which Dow Jones had a strong quarter with increased revenues and greater profitability year over year.

All Street Journal subscriptions grew 8% and we have crossed the 70% threshold for the number of digital only subscribers.

Want to nudge. We currently do not include readers of Apple news plus in that number. So it certainly does not fully capture the number of readers who are now paying for access to the journal.

Advertising revenue at Dow Jones grew troop present in the quarter led notably by strong digital outperformance that WSJ dot com, which grew 13% as compared to a decline of the New York Times.

We also saw a stronger circulation revenue growth and increasing profitability as compared to the New York Times.

Just professional information business continue to thrive with the burgeoning risk and compliance sector in particular growing 25% year over year.

With many companies under intensifying regulatory scrutiny imperative to minimize risk and maximize compliance remains a burgeoning source of business.

Overall, our professional information business represents a pronounced distinguishing advantage I haven't media competitors and provides multiple opportunities for for us to up sell specialist content to companies professional investors and individual investors, who actively manage their portfolio.

Barnes group continue to report strong traffic growth in Q1 with total unique users up 27% year over year, driven by market watching Barron's online.

Subscribers grew 7% to 587000, while market watch Q1 revenue was its strongest quarterly revenue performance.

In the UK.

Digital subscribers at the times and Sunday times grew 19% to 312000.

Advertising in local currency was up a first time since Q3, all financial year 18, as digital growth more than offset modest print declines.

Digital advertising growth at the sudden accelerated from the prior quarter right and benatar benefited from a growing audience and high yield with approximately 129 global monthly unique users in September 20 Nonjets.

Meanwhile.

Wireless.

Total range our results show that the reach of wireless is stations grew 21% year over year with a 26% increase in listening hours.

Propelled by Chris Evans, joining the network Virgin radio experienced a 300% increase in reach and 500% jump in listening hours.

Meanwhile, Talksport had a 20% increase in digital listening. Thanks in part to the New Premier League rights, which drives Saturday listening up 120% year over year.

In Australia, the Hasz economic conditions that affected all of that businesses, including Harpercollins.

In media, we continue to execute on a digital strategy.

The mastheads, reaching more than 542000 digital subscribers, representing 23% year over year grows at the Australian 65% of scribe subscribers with digital showing that subscription sensibility is indeed evolving and more people expect to pay more for digital products.

Circulation revenue was also lifted by teller copper price increases at a metropolitan bastards.

We took the bold step up sharply increasing the copper prices Neal post in June and there has been a 12% year over year increase in circulation revenue.

The ties and also rose at a similar right.

It is worth noting that more than 70% of the post advertising revenues in the quarter where digital.

Turning to subscription video services total subscribers that Foxtel grew 6% year over year, despite the difficult conditions in US right now the latest number of paying subscribers as of November five reached 402000 with total subscribers at 443000 and this is less.

Than a year after its launch.

With the rugby World Cup ending last week Kao is now preparing for the seasonal shift to cricket and other summer sports in Australia.

And kao customers continue to be highly engaged with over 75% of subscribers using the product each and every week.

Okay.

Premiums streaming service and shows that file a large number of Australians are prepared to pay for content that had.