NZME LIMITED — Interim / Quarterly Report 2018

Aug 22, 2018

Half Year 2018 Results Presentation For the six months ended 30 June 2018

23 August 2018

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DISCLAIMER

The information in this presentation is of a general nature and does not constitute financial product advice, investment advice or any recommendation. Nothing in this presentation constitutes legal, financial, tax or other advice. This presentation constitutes summary information only, and you should not rely on it in isolation from the full detail set out in the Consolidated Interim Financial Statements.

This presentation may contain projections or forward-looking statements regarding a variety of items. Such projections or forward-looking statements are based on current expectations, estimates and assumptions and are subject to a number of risks and uncertainties. There is no assurance that results contemplated in any projections or forward looking statements in this presentation will be realised. Actual results may differ materially from those projected in this presentation. No person is under any obligation to update this presentation at any time after its release to you or to provide you with further information about NZME Limited.

A number of unaudited non-GAAP financial measures are used in this presentation, which are outlined in the supplementary information to the presentation. The Group adopted NZ IFRS 15 – Revenue from Contracts with Customers on 1 January 2018 without restating the H1 17 comparatives. Trading Revenue

as stated throughout this presentation refers to revenue prior to adjustments for the adoption of NZ IFRS 15. Please refer to note 2.1.1 of the Consolidated Interim Financial Statements for the period ended 30 June 2018 and pages 30 to 31 for a more detailed reconciliation. You should not consider any of these in isolation from, or as a substitute for, the information provided in the unaudited Consolidated Interim Financial Statements for the six months ended 30 June 2018.

While reasonable care has been taken in compiling this presentation, none of NZME Limited nor its subsidiaries, directors, employees, agents or advisers (to the maximum extent permitted by law) gives any warranty or representation (express or implied) as to the accuracy, completeness or reliability of the information contained in it nor takes any responsibility for it. The information in this presentation has not been and will not be independently verified or audited.

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AGENDA
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05 H1 18 Results Summary

07 Operational Priorities

08 Channel Results

15 Digital Classifieds 19 Monetising Our Content 21 H1 18 Financials 26 Outlook

28 Q&A

Supplementary Information

29

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NZME REACHES 80%[1] OF NEW ZEALANDERS

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PRINT
1.3 Million
weekly readers [1]
MARKETPLACES EXPERIENTIAL RADIO
DATA &
INSIGHTS DIGITAL
CLASSIFIEDS
CREATIVE NEWS 2.0 Million
NATIVE
PRINT RADIO CONTENT weekly listeners [2]
CONTENT
CREATION
ENT. SPORT
AUDIENCE EVENTS
TARGETING
DIGITAL
PRODUCTIONVIDEO & DIGITAL ENGAGEMENTBRAND Unique audience of
DIGITAL
STRATEGY MARKETING
& PLANNING SERVICES
2.4 Million
per month [1]
LIT
NT
BI
E
IE
+
PA
T
S
N C
CA
CORECO HANNELS
CHINESENZHERALD.CO.NZ
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EVERY MINUTE, EVERY HOUR, EVERY DAY...

1Nielsen CMI May Fused Q2 17 - Q1 18 (population 10+ years) 2GfK Radio Audience Measurement, Commercial Stations, NZME and Partners. Cumulative Audience T2 2018.

NZME H1 18 RESULTS SUMMARY

Statutory NPAT $3.7m H1 17 $7.8m 53%

Trading Revenue1 $185.7m

H1 17 $191.0m[3 ] 3%

Trading EBITDA1

$23.2m

H1 17 $28.2m 18%

Interim Dividend Fully Imputed 2.0cps2 Scheduled for payment on 26 October 2018

1Trading measures are non-GAAP measures that are explained and reconciled in the supplementary information on pages 30-31. 2A supplementary dividend of 0.3529 cents per share will be payable to shareholders who are not tax resident in New Zealand and who hold less than 10% of the shares in NZME Limited.[3] H1 17 Trading revenue includes other income.

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NZME INVESTING FOR THE FUTURE

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H1 18 H1 17
$m % Change
Trading [1] Trading [1]
Trading Revenue 185.7 191.0 (3%)
Total Costs excluding Digital Classifieds Costs [2] (159.4) (162.8) (2%)
EBITDA from underlying business 26.3 28.2 (7%)
Costs associated with Digital Classifieds (3.1) -
Trading EBITDA 23.2 28.2 (18%)
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Trading revenue declined just 3% in H1 18 compared to H1 17 reflecting continuation of industry headwinds, to a degree moderated by ongoing market share gains and strong digital growth.

Excluding the investment in the Digital Classified platforms, underlying EBITDA declined $1.9m in H1 18 vs H1 17.

Focus on business efficiency contributed to a $3.4m reduction in underlying costs.

In line with the strategy to develop and grow new revenue streams three new Digital Classified businesses were launched in March 2018 incurring costs of $3.1m. The majority of this investment has been in people, marketing, data and technology licensing.

We are still early days for these platforms, but encouraged by operational progress and audience growth.

1Trading measures are non-GAAP measures that are explained and reconciled in the supplementary information on pages 30-31. 2 Total Costs excluding Digital Classifieds Costs is a non-GAAP measure that shows the Trading Costs for H1 18 of $162.5m (as reconciled on page 30) less the Costs associated with the Digital Classified platforms launched in H1 18. For H1 17, these costs are the same as Trading Costs as reconciled on page 31.

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NZME H1 18 OPERATIONAL PRIORITIES

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Continued audience • Total audience 3.3m
growth and engagement • 10% YoY growth in NZ Herald weekly brand audience [1] and 8.5% increase in engagement
on nzherald.co.nz [2]
• Radio audience stable
• Strong audience growth in the new Digital Classifieds
Return advertising revenue • Advertising revenue in H1 impacted by declining business confidence
to growth • Increasing or maintaining share across all channels in all measurable markets
• Digital revenue growth offset ~70% of the print advertising decline in H1
• Improved trends in radio revenue
Effective cost and capital • $3.4m decrease in costs [3]
management • Cost out initiatives in H1 will benefit H2 performance
Develop our talent and • New prime time shows launched on ZM (“Bree & Clint” Drive show)
people and Coast (“Jase & Bernie” Breakfast show)
• Building the profile of journalists ahead of paid content launch
• Board renewal completed - two new directors appointed
Grow new revenue streams • $3.1m opex invested in launching three new Digital Classifieds
• Initial reception and engagement positive, but still early days
• Paid subscription capability on nzherald.co.nz on track for end of H2
Stuff Merger • Appeal heard in Court of Appeal in June 2018. Judgement expected in H2
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1Nielsen CMI Q2 17 – Q1 18 AP 15+. 2Nielsen Market Intelligence, Domestic Traffic, 2018. 3Trading Costs excluding Digital Classifieds Costs.

CHANNEL RESULTS

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NZME H1 18 MARKET COMPARABLES

MAINTAINING OR GROWING ACROSS ALL CHANNELS

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Digital &
e-Commerce 16%
H1 17 14%
Display & Mobile Revenue Print
NZME +20%
NZME Ad Revenue -8%
YoY to Q1 18
YoY in H1 18
Market YoY to Q1 18 +13% [1] 28% 56% Stuff Ad Revenue -20%3
H1 17 28% H1 17 58% YoY H1 18 comparative
NZME > Market
NZME Circulation -4%
Revenue
Radio & YoY H1 18
Stuff Circulation -8%3
Experiential
Revenue
Agency Revenue YoY H1 18 comparative
NZME > Market
NZME Flat
YoY in H1 18
Market Flat [2] Print
YoY in H1 18
Radio & Experiential
NZME = Market Digital & e-Commerce
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1IAB / PwC New Zealand Q1 2018 Interactive Advertising Spend Report; digital excluding search and directories, and social media (NZ market only). 2SMI New Zealand Agency Advertising Expenditure Report June 2018. 3Faifax Media Limited Full Year 2018 and Half Year 2017 Reports.

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NZME PRINT

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•
NZME Print Revenue ($m) H1 18 H1 17 % Change
Advertising Revenue 55.5 60.2 (8%) •
Circulation Revenue 40.4 41.9 (4%) •
Other Revenue [1 ] 7.7 8.4 (9%)
Total Print Revenue 103.6 110.6 (6%)
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Print advertising revenue continues to decline at historical rates.

Growth continues in readership and audience.

Circulation volume decline has been largely offset by increases in yield. Cover price increase implemented across all titles on 1 July 2018.

• Other revenue includes printing and distribution services provided to Stuff NZ and other third parties.

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1Other Revenue consists of External printing & distribution revenue of $4.3m (H1 17: $4.6m) and Other revenue of $3.4m (H1 17: $3.8m) as disclosed in note 2.1 of the Consolidated Interim Financial Statements for the period ended 30 June 2018.

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NZ HERALD AUDIENCE GROWING, SUBSCRIBER REVENUES STABLE

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The NZ Herald Mon-Sat Average
Issue Readership [1] NZME Subscriber Volume and Yield [2] NZ Herald Daily Brand Audience [3]
490 16.0 1.90 1100
470 14.0 1.80 1050
1000
1.70
12.0
450
950
1.60
10.0
900
430 1.50
8.0 850
410 1.40
800
6.0
1.30
390 750
4.0
1.20
700
370 2.0 1.10 650
350 0.0 1.00 600
Subscriber Volume Yield
Yield ($)
Readership (000s)
Daily Brand Audience (000s)
Subscriber Volume (millions)
Q2 13 - Q1 14 Q4 13 - Q3 14 Q2 14 - Q1 15 Q4 14 - Q3 15 Q2 15 - Q1 16 Q4 15 - Q3 16 Q2 16 - Q1 17 Q4 16 - Q3 17 Q2 17 - Q1 18 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 15 - Q2 16 Q4 15 - Q3 16 Q1 16 - Q4 16 Q2 16 - Q1 17 Q3 16 - Q2 17 Q4 16 - Q3 17 Q1 17 - Q4 17 Q2 17 - Q1 18
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1Nielsen CMI Q2 2017 – Q1 2018, NZ Herald AIR trend, AP15+ 2Subscriber volume drives revenue and represents the count of individual “paid” papers delivered, including the NZ Herald, Herald on Sunday and Regionals (includes paid trials). Subscriber yield includes promotional volumes.[3] Nielsen CMI Q2 17 – Q1 18, AP15+.

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NZME RADIO & EXPERIENTIAL

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H1 18 H1 17
NZME Radio & Experiential Revenue ($m) % Change
Trading [1] Trading [1]
Radio & Experiential Revenue 48.8 50.4 (3%)
Other Revenue (inc. iHeart and Events) 2.2 2.1 1%
Total Radio & Experiential Revenue 51.0 52.6 (3%)
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• •

• Radio and experiential revenue declined just 3% after being down 5% in FY17 and 6% in the first half of last year.

• Focus for H2 on continuing the positive momentum in radio revenue.

• Audience is down slightly in the key 18-54 y/o demographic, from our peak a year ago. Newstalk ZB remains #1 radio station in NZ.

NZME Major Markets 18-54 y/o Station Share[3]

Change in Radio Revenue % of pcp[2]

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42
1% 37
0%
32
-1%
-2%
27
-3%
-4%
22
-5%
-6% 17
-7%
-8% 12
Station Share (%)
Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 T1 2016 T2 2016 T3 2016 T1 2017 T2 2017 T3 2017 T4 2017 T1 2018 T2 2018
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• iHeart Radio registered users up 24% YoY to more than 782,000[4] and average monthly streams up 159% YoY to 18.2 million.[5]

1Trading measures are non-GAAP measures that are explained and reconciled in the supplementary information on pages 30-31. 2Previous corresponding period. 3GfK Radio Audience Measurement, Commercial Stations. NZME & Partners in Major Markets Trended to T2/2018. Station Share %. Mon-Sun 12mn-12mn, 18-54.[4] iHeartMedia, 2017-2018; Adobe Analytics, 2018.[5] AdsWizz and StreamGuys, 2017-2018.

BREE CLINT

4PM-7PM

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NZME DIGITAL & E-COMMERCE

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NZME Digital & e-Commerce Revenue ($m) H1 18 H1 17 % Change
Digital Revenue [4] 23.9 20.5 17%
e-Commerce Revenue 5.0 5.5 (8%)
Total Digital & e-Commerce Revenue 29.0 26.0 12%
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nzherald.co.nz Average Weekly
Unique Browsers [1]
3.9
3.8
3.7
3.6
3.5
3.4
3.3
3.2
3.1
3.0
Average (Millions)
Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18
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• Digital advertising revenue grew across all products, outperforming the market.

• Washington Post ARC platform has enabled improved audience analytics and monetisation.

• Native video delivered 6% YoY growth across all sites to more than 2 million views per week[2] .

• Digital revenue growth in H1 offset ~70% of the decline in print advertising revenue.

• nzherald.co.nz continues to attract more than 3.8 million unique browsers per month with mobile audience comprising almost 75% of total audience, up from 60% last year[3] .

• GrabOne (e-Commerce) revenues stabilising, reflecting change of model, improved traffic and email personalisation.

1Nielsen Market Intelligence Average Weekly UB’s 2017 – 2018. 2Bright cove analytics, 2017-2018. Native = viewed on an NZME platform. 3Nielsen Market Intelligence, Domestic Traffic, 2017-2018.[4] Digital revenue consists of Advertising revenue of $20m (H1 17: $19.4m) and Other revenue of $3.9m (H1 17: $1.1m) as disclosed in note 2.1.1 of the Consolidated Interim Financial Statements for the period ended 30 June 2018.

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DIGITAL CLASSIFIEDS

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• Needs based search

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• Unique tools for buyers and sellers

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WE’RE HERE TO
LAUNCH CAREERS
SO WE GOT A
MICROBIOLOGIST
TO LAUNCH US
GET MORE THAN A JOB AT
.co.nz
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• Targets active and passive candidates

• Integrated data insights

• Championing the candidate

• Lead generation for agents

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LISTINGS

AUDIENCE

• Launched March 20181

• Currently ~50% of the total market 'for sale' listings on site

• 3 out of 5 major agency groups now on site

• Strong audience growth since launch, supported by extensive brand advertising

• Currently reaching ~65% of realestate.co.nz audience

• 4th to go live in Q3

OneRoof Weekly Unique Browsers[2]

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500
• Targeting 75% of the 'for sale' market by December 2018
450
90%
Area of 400
80% Focus
350
70%
4th 300
60% Agency
250
50% 200
40% 150
30% 100
20% 50
10% -
0%
OneRoof.co.nz Homes.co.nz realestate.co.nz trademe.co.nz/property
Weekly Unique Browsers (000s)
OneRoof Listings as a % of Total "For Sale" Listings
Mar 18 Apr 18 May 18 Jun 18
Apr 18 May 18 Jun 18 Jul 18 Sep 18 Dec 18
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REVENUE OPPORTUNITIES

• Premium listings • Bundled cross-channel packages • Branded content • Agent subscriptions • Sponsorship • Agent profiles

1OneRoof is a joint venture between NZME (80% share) and the developer of the platform (20% share). The entity is fully consolidated in the NZME Consolidated Interim Financial Statements.[ 2] Nielsen Market Intelligence, Domestic Traffic (1 Jan 18 - 30 June 18).

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DRIVEN Weekly Unique Browsers[1]

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140,000
120,000
100,000
80,000
60,000
40,000
20,000
-
Jan 18 Feb 18 Mar 18 Apr 18 May 18 Jun 18
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LISTINGS

• Relaunched site in March 2018

• H2 focus on launching unique tools for buyers and sellers

• Currently have ~60% of all dealer listings in New Zealand

AUDIENCE

• DRIVEN audience has increased from 6% to ~20% of Trademe Motors' audience

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YUDU Weekly Unique Browsers [1]
WE’RE HERE TO
60,000
LAUNCH CAREERS
LISTINGS
SO WE GOT A 50,000
MICROBIOLOGIST • Launched March 2018
TO LAUNCH US
40,000
• Currently have 33% of total job
3 0,000 market listings
AUDIENCE
20,000
• YUDU audience has increased
10,000 from 1% to ~30% of Trade Me
- Jobs' audience
GET MORE THAN A JOB AT
.co.nz
REVENUE • Branded content • Targeted advertising • Listings
OPPORTUNITIES
Mar 18 Apr 18 May 18 Jun 18
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1Nielsen Market Intelligence, Domestic Traffic (1 Jan 18 - 30 June 18).

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MONETISING OUR CONTENT

NZME PAID PROPOSITION

Global Learnings

• Audience willingness to pay for digital content has increased significantly.

• Majority of global news publishers charge for digital content.

2017 Washington Post ARC Partnership

• New Content Management System

• A/B testing of content

• Personalisation

• “Freemium” has become the preferred business model.

• Launched Premium & InDepth content on nzherald.co.nz

nzherald.co.nz Average Site Duration[1]

3.30

2018 Audience Registration

• Utilising data insights

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3.10
2.50
2.30
Minutes and seconds
Jan 18 Feb 18 Mar 18 Apr 18 May 18 Jun 18 Jul 18
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• Targeted content

• Enhancing talent profiles

• Expanding premium content offering

• Building engagement

Paid Content Capability

• Freemium model for local premium content and premium international business content

• Frictionless user experience and payment options

1Nielsen Market Intelligence, Domestic Traffic (1 Jan 18 - 30 June 18).

• Bundled print and digital subscriptions

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1 2 3
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Opinion writer of the year

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Political journalist of the year

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FINANCIALS

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NZME TRADING RESULT

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H1 18 H1 17
$m % Change
Trading [1] Trading1
Revenue 183.5 189.1 (3%)
Other Income 2.2 1.9 13%
Total Revenue & Other Income 185.7 191.0 (3%)
Costs (162.5) (162.8) (0%)
EBITDA 23.2 28.2 (18%)
Depreciation and amortisation (13.1) (12.1) 9%
EBIT 10.1 16.2 (37%)
Net Interest (2.1) (2.3) (6%)
NPBT 8.0 13.9 (43%)
Tax (2.4) (4.0) (39%)
Trading NPAT 5.5 9.9 (44%)
Trading earning per share (cps) 2.8 5.0 (44%)
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The statutory results reflect the impact of NZ IFRS 15 Revenue from Contracts with Customers on Revenue. For presentation purposes the H1 18 Trading result is provided on a basis consistent with the FY17 result to enable a like-for-like comparison. Refer to page 30 of this presentation and note 2.1.1 of the Consolidated Interim Financial Statements for further detail.

• Trading revenue down 3% due to decline in Print advertising which has been in part offset by growth in Digital.

• Other income primarily relates to the provision of financial back office services to third parties.

• Cost savings have been largely invested in the new Digital Classifieds which has had a flow on effect to NPAT.

• Amortisation has increased reflecting recent investments in software assets.

1All Trading measures shown here are non-GAAP measures that are explained and reconciled in the Supplementary Information on pages 30-31.

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NZME COSTS

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H1 18 H1 17
$m % Change
Trading [1] Trading1
People costs & contributors 79.3 82.1 (3%)
Print & distribution costs 31.2 34.4 (9%)
Agency commission & marketing 17.6 17.5 1%
Property 10.3 10.8 (4%)
Content 7.1 5.6 27%
IT & communications 6.2 5.9 5%
Other 7.7 6.7 15%
Total Costs excluding Digital Classifieds Costs 159.4 162.8 (2%)
Costs associated with Digital Classifieds 3.1 - -
Total Trading Costs 162.5 162.8 (0%)
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Underlying costs[3] down 2% reflecting the ongoing impact of cost efficiency programs.

• Print and distribution costs are lower due to reduced print volumes and efficiency benefits from the closed loop colour registration upgrade.

The increase in content costs reflects investment in video content production.

$3.1m invested in launching the three Digital Classifieds. The majority of this investment has been in people, marketing, data and technology licensing.

EXCEPTIONAL ITEMS

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$m H1 18 H1 17
Redundancies 2.1 1.4
Costs in relation to one-off projects 0.4 1.2
Total Exceptional Items [2] 2.5 2.6
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1All Trading measures shown here are non-GAAP measures that are explained and reconciled in the Supplementary Information on pages 30-31. 2Refer to Note 2.3.2 of the Consolidated Interim Financial Statements for the period ended 30 June 2018 for a more detailed explanation of exceptional items.[3] Trading Costs excluding Digital Classifieds Costs.

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NZME BALANCE SHEET

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$m Jun 18 Dec 17 Jun 17
Trade, other receivables and inventory 54.2 57.2 58.4
Trade and other payables (50.0) (56.9) (59.8)
Current tax (liability)/receivable 2.6 (7.6) (0.3)
Net working capital (excluding cash) 6.8 (7.3) (1.7)
Fixed, intangible and other assets 395.3 401.3 406.2
Net interest bearing liabilities (106.1) (90.2) (106.8)
Other liabilities (14.8) (14.8) (15.9)
Net Assets 281.3 289.0 281.7
Rolling 12 month Trading EBITDA1 61.2 66.2 67.5
Trading¹ net interest cover 14.5 15.2 12.3
Net debt to trading EBITDA 1.7 1.4 1.6
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• The balance sheet remains strong with net debt of $106m stable year on year.

• Lower payables reflects reduced print costs, timing of incentives, and the migration to software as a service.

• The movement in net working capital has been driven predominantly by the timing of tax payments.

• Bank facilities of $160m expire on 1 January 2020. Undrawn bank facilities as at 30 June 2018 totalled $41.2m.

NZME has engaged an external adviser to review our capital structure, dividend policy and advise on the refinance of our bank facilities.

1All Trading measures shown here are non-GAAP measures that are explained and reconciled in the Supplementary Information on pages 30-31.

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NZME CASH FLOW

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H1 18 H1 17
$m
Trading1 Trading1
Trading EBITDA 23.2 28.2
Share based payment scheme (non-cash) 0.2 0.2
Movement in payables and receivables (4.0) (9.3)
Cash from operations 19.6 19.1
Net interest expense (2.0) (2.2)
Capital expenditure (7.1) (6.8)
Exceptional items (2.5) (2.6)
Dividends paid (11.8) (11.9)
Tax paid (11.9) (6.5)
Movement in net debt (15.9) (10.9)
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• Solid operating cash flow in H1 18 has been applied to tax payments, dividends and capex.

• Key items broadly stable on same period last year, but increased tax due to payment timing.

1All Trading measures shown here are non-GAAP measures.

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OUTLOOK
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• H1 18 advertising revenue declined 4% on the same period last year. Advertising bookings for Q3 are consistent with the H1 result, down 4% year on year. Agency advertising spend remains challenged and softening economic conditions have the potential to weaken or delay advertising revenue in H2.

NZME continues to hold or increase share across all channels.

The benefit of cost initiatives implemented in H1 18 are expected to be reflected in H2 18 but are not expected to be sufficent to offset the softening advertising revenue in the underlying business.

In addition, we continue to invest in Digital Classifieds to create new future revenue streams and shareholder value. FY18 EBITDA will reflect this softened market and investment in Digital Classifieds.

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H2 18 FOCUS ON OPERATIONAL PRIORITIES

• Grow audience and • Expand range of Premium content on nzherald.co.nz engagement • •

• Return advertising • Maintain improved direct channel momentum revenue to growth •

• Implement registration on the site to improve personalisation and engagement

• • Embed new radio shows and continue momentum in audience growth

• Maintain improved direct channel momentum

• • Leverage integrated audience sell across all channels to offset the impact of challenging advertising market

• Effective cost and capital • Cost out initiatives implemented in H1, will benefit H2 performance, management partially offset by continued investment in Digital Classifieds • Have engaged external adviser to review our capital structure

• Develop our talent and people • Continue to develop the profile of our journalism team ahead of the launch of paid content

• • Attract new talent to further enhance premium proposition • Prepare for transition of new talent on key Newstalk ZB shows

• Grow new revenue streams • Continue to invest in listings and audience on OneRoof, DRIVEN and YUDU • Deliver paid content capability in late 2018

• Stuff Merger • Evaluate following release of Court of Appeal judgement (expected in H2)

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A U C K L A N D 8 9 . 4 F M

Page

SUPPLEMENTARY INFORMATION

29

Page 30

NZME H1 18 RECONCILIATION OF TRADING RESULT TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS

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H1 18
$m H1 18 NZ IFRS Exceptional Financial
Trading 15 [1] Items7 Statements
Segment revenue2
- Print 103.6 - - 103.6
- Radio 51.0 3.8 - 54.8
- Digital 29.0 - - 29.0
Other Income [3] 2.2 - - 2.2
Total Revenue and Other Income 185.7 3.8 - 189.5
Costs [4] (162.5) (3.8) (2.5) (168.9)
EBITDA 23.2 - (2.5) 20.7
Depreciation and amortisation (13.1) - - (13.1)
EBIT 10.1 - (2.5) 7.6
Net interest expense [5] (2.1) - - (2.1)
NPBT 8.0 - (2.5) 5.4
Tax [6] (2.4) - 0.7 (1.8)
NPAT 5.5 - (1.8) 3.7
Earnings per share (cps) 2.8 - - 1.9
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1For a detailed explanation of the NZ IFRS 15 adjustment please refer to Note 2.1.1 of the Consolidated Interim Financial Statements

2Segment revenue in the H1 18 Financial Statements column agrees with the segment revenue as disclosed in notes 2.1 and 2.3 of the Consolidated Interim Financial Statements for the period ended 30 June 2018. The H1 18 Segment revenue excludes the NZ IFRS 15 adjustment to ensure a like-for-like comparison with the H1 17 information that are not restated for the effects of NZ IFRS 15.

3Other Income consists of revenue from the shared service centre of $1.7m and other income of $0.5m as disclosed in note 2.1 of the Consolidated Interim Financial Statements.

4Costs in the H1 18 Financial Statements agrees to Expenses from operations before finance costs, depreciation and amortisation as disclosed in the Consolidated Interim Income Statement.

5Net interest expense is made up of Finance Cost of $2.2m (as disclosed in the Consolidated Interim Income Statement) less Finance income of $0.1m as disclosed in note 2.1.

6Trading tax payable has been calculated using NZME's effective tax rate on NPBT excluding exceptional items of 30%.

7Exceptional Items consist of redundancies and costs in relation to one-off projects (as disclosed in the note 2.3.2 of Consolidated Interim Financial Statements).

Page 31

NZME H1 17 RECONCILIATION OF TRADING RESULT TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS

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H1 17 H1 17
Excepional
$m Trading Items Statutory
Result Result
Segment Revenue1
- Print 110.6 - 110.6
- Radio 52.6 - 52.6
- Digital 26.0 - 26.0
Other Income [2] 1.9 - 1.9
Total Revenue and Other Income 191.0 191.0
Costs [3] (162.8) (2.6) (165.5)
EBITDA 28.2 (2.6) 25.6
Depreciation and amortisation (12.1) - (12.1)
EBIT 16.2 (2.6) 13.5
Net interest expense [4] (2.3) - (2.3)
NPBT 13.9 (2.6) 11.2
Tax [5] (4.0) 0.5 (3.5)
NPAT 9.9 (2.1) 7.8
Earnings per share (cps) 5.0 (1.0) 4.0
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• 1Segment revenue agrees with the segment revenue as disclosed in notes 2.1 and 2.3 of the Consolidated Interim Financial Statements for the period ended 30 June 2018.

• 2Other Income consists of revenue from the shared service centre of $1.5m and other income of $0.4m as disclosed in note 2.1 of the Consolidated Interim Financial Statements.

• 3Costs in the H1 17 Financial Statements agrees to Expenses from operations before finance costs, depreciation and amortisation as disclosed in the Consolidated Interim Income Statement.

• 4Net interest expense is made up of Finance Cost of $2.4m (as disclosed in the Consolidated Interim Income Statement) less Finance income of $0.1m as disclosed in note 2.1.

• 5Trading tax payable has been calculated using NZME's effective tax rate on NPBT excluding exceptional items of 29%.

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