SKY NETWORK TELEVISION LIMITED. — M&A Activity 2025

Jul 31, 2025

Sky New Zealand PO Box 9059 Newmarket Auckland 1149 New Zealand

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10 Panorama Road Mt Wellington Auckland 1060 New Zealand T. +64 9 579 9999

sky.co.nz

1 August 2025

Sky completes acquisition of Discovery NZ Limited

Sky is pleased to confirm the completion of its acquisition of 100% of the shares in Discovery NZ Limited (Discovery NZ) for $1 on a cash-free, debt-free basis.

Sky Chief Executive, Sophie Moloney commented: “The acquisition of Discovery NZ positions us to scale faster, accelerates our growth, and further diversifies our revenue streams, particularly in advertising and digital. We have acquired a business with complementary operations that is a strong strategic fit for Sky, in a manner which is value accretive for our shareholders.”

2024 in which Discovery NZ reported an after-tax loss of $77.6 million. These 2024 accounts reflect a period in which Discovery NZ completed a significant restructure of its business, including the closure of Newshub, that has substantially reduced the ongoing cost base.

When assessing Discovery NZ’s 2024 accounts, it is important to consider the underlying performance of the continuing operations. For this reason, Sky has provided a presentation which reconciles Sky’s due diligence analysis of Discovery NZ’s reported result for 2024 with the expected financial performance of the continuing operations immediately following the acquisition by Sky. . In This reconciliation narrows the reported EBITDA loss to a proforma $9.0 million EBITDA loss[1] addition, the presentation shows a pathway to delivering at least $10 million of incremental EBITDA by FY28 as a result of assumed synergies across both Sky and Discovery NZ of at least $19 million p.a.

Importantly, content rights acquired at completion clear of payables reduces net working capital requirements in the first 12-18 months, giving Sky a cash flow benefit and runway to deliver on these synergies over the next 2-3 years.

Sophie Moloney added: “Sky is uniquely placed to capitalise on this opportunity and to give New Zealanders even more content they love. The transaction structure enables a pathway to deliver positive underlying free cash flow from year one. While there may be short term (FY26) bottom line noise resulting from non-cash accounting impacts, longer term, significant cost synergies are available across the highly complementary operations of both businesses - particularly in programming and broadcast infrastructure. As a result, we expect to deliver sustainable incremental EBITDA of at least $10 million by FY28.”

ENDS

1 Subject to fair value accounting of the acquisition (e.g. items such as content and the platform), to be completed within 12 months).

Authorised by: Kirstin Jones, Company Secretary

Investor queries to: Media queries to: Amanda West Maree Wilson Head of Investor Relations & Corporate Sustainability Corporate Communications Amanda.West@sky.co.nz Maree.Wilson@sky.co.nz

Reconciliation of accounts Following the acquisition of Discovery NZ Limited by Sky

1 August 2025 © SKY 2021

Disclaimer

This presentation has been prepared by Sky Network Television Limited and its group of companies (“the Company”) for informational purposes. This disclaimer applies to this document and the verbal or written comments of any person presenting it.

Information in this presentation has been prepared by the Company with due care and attention. However, neither the Company nor any of its directors, employees, shareholders nor any other person give any warranties or representation (express or implied) as the accuracy or completeness of this information. To the maximum extent permitted by law, none of the Company, its directors, employees, shareholders or any other person shall have any liability whatsoever to any person for any loss (including, without limitation, arising from any fault or negligence) arising from this presentation or any information supplied in connection with it.

This presentation contains 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, including material adverse events, significant one-off expenses and other unforeseeable circumstances. There is no assurance that results contemplated in any of these projections and forward-looking statements will be realised, nor is there any assurance that the expectations, estimates and assumptions underpinning those projections or forward-looking statements are reasonable. 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 or to provide you with further information about the Company.

The information in this presentation is of a general nature and does not constitute financial product advice, investment advice or any recommendation. The presentation does not constitute an offer to sell, or a solicitation of an offer to buy, any security and may not be relied upon in connection with the purchase or sale of any security. Nothing in this presentation constitutes legal, financial, tax or other advice.

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Sky has provided the following information to assist investors in understanding the underlying financial performance of Discovery NZ (DNZ)

Reconciliations[1] :

Page:

• DNZ 2024 reported financial result at a reported EBITDA level

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• DNZ 2024 reported EBITDA level result to proforma EBITDA for continuing operations

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• DNZ proforma EBITDA for continuing operations to Sky’s assessment of incremental Sky Group EBITDA by FY28

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• FY26 proforma underlying free cash flow impact from the acquisition of DNZ

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1. Sky has prepared the reconciliations based on its review of DNZ’s FY24 financial statements and FY25 budget, and modelled potential synergies, as part of its due diligence prior to completing the transaction.

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© SKY 2021

Discovery NZ’s 2024 result at a reported EBITDA level $36.6m of reported costs in 2024 were either one-off or non-cash in nature

2024 STATUTORY LOSS TO 2024 EBITDA[1] ($m)

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(40.9)
(77.5)
4.6
5.7
1.1
9.1
1.3
14.9
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• One-off termination benefits regarding the closure of Newshub

• Share-based compensation is a noncash accounting entry related to the WBD Group (and will not continue)

• Debt-free transaction and exit of property leases removes finance costs

• Depreciation, amortisation, and impairment charges are non-cash in nature and reported below EBITDA

• Loss on disposal of assets relates to the write-off of certain Newshub assets and the surrender of leases

Dec-24 Termination Share-based Finance Depreciation, Loss on Loss and Dec-24 Net loss benefits compensation cost amortisation disposal Impairment of EBITDA-level before tax and impairment of assets Equity operations loss of assets accounted investments

• Equity investment impairment reflects the dissolution of a joint venture for Bravo TV with NBC Universal in December 2024

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© SKY 2021
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1. Source: Discovery NZ Ltd financial statements for the year ended 31 December 2024 and Sky analysis following due diligence.

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Continuing operations EBITDA in 2025

Further improvement observed in 2025 reflecting ongoing operations post Newshub closure, exit of property leases, and impact of revised content agreements as part of the transaction with Sky

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FY24 EBITDA TO EBITDA OF CONTINUING OPERATIONS
IMMEDIATELY POST COMPLETION [1] ($m)
(9.0)
5.5
3.1
(40.9) 5.4
17.9
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• 2024 employee costs are normalised to reflect the current run-rate post Newshub closure

• 2025 Budget normalisation reflects the downsizing of DNZ’s operations post Newshub closure

• Exit of property leases reduces costs vs 2024, primarily due to surrendering the Flower Street lease in June 2025

• Agreed content and revenue share arrangements reduce ongoing operating costs

Dec-24 Employee cost Budget Exit of Transaction Proforma EBITDA-level normalisation normalisation properties structuring EBITDA-level operations loss normalisation normalisation continuing operations loss

1. Source: Discovery NZ Ltd financial statements for the year ended 31 December 2024 and Sky analysis following due diligence. Note, purchase price allocation and fair valuation of identifiable net assets (e.g. content and platform) is yet to be completed.

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© SKY 2021

At least $10m of potential incremental EBITDA by FY28 Synergies across content, broadcast infrastructure and a number of overheads – to come from the combined Sky + DNZ cost base

ASSUMED ONGOING INCREMENTAL GROUP EBITDA POST SYNERGIES[1] ($m)

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10.0
(at least)
19.0
(as modelled)
(9.0)
Proforma Group Incremental
EBITDA-level Synergies Group
continuing EBITDA
operations loss
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• Incremental Group EBITDA reflects synergies across the combined cost base

• Cost synergies will be extracted across combined content, broadcast infrastructure, and overhead costs, with most to be delivered in year 2 and 3

• Revenue synergies from wider audience reach are unquantified

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© SKY 2021
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1. Source: Discovery NZ Ltd financial statements for the year ended 31 December 2024 and Sky analysis following due diligence. Note, purchase price allocation and fair valuation of Page 6 identifiable net assets (e.g. content and platform) is yet to be completed.

30 cent dividend target for FY26 not impacted

Debt-free balance sheet and content rights clear of payables at completion provides free-cash flow benefit over the first 12-18 months

FY26 PROFORMA UNDERLYING FREE CASH FLOW IMPACT[1] ($m)

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~(3) - (4)(2.8)
~1 - 4
5.3
~10 - 1212.2
(9.0)
~3 - 5
4.9
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Proforma FY26 Net working Capex Proforma
EBITDA-level Group capital FY26
continuing Synergies requirements Free cashflow
operations loss Impact
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NET WORKING CAPITAL CASH FLOW BENEFIT IN
FIRST 12-18 MONTHS [1]
Content rights clear of
payables means a Synergies are
portion of amortisation unlocked over
expense has no cash time
outlay over first 12-18
months
Completion FY26 FY27 FY28
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• Planned synergies in FY26 are highly targeted as we prioritise integration and technology separation

• Content rights on acquisition clear of payables reduces working capital requirements in the first 12-18 months

• Ongoing capex requirements, largely to maintain the ThreeNow platform, are below Sky’s target level of 7% to 9% of revenue

• No drag on underlying free cash flow from the acquisition, meaning 30 cps dividend target for FY26 not impacted

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© SKY 2021
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1. Source: Discovery NZ Ltd financial statements for the year ended 31 December 2024 and Sky analysis following due diligence. Note, purchase price allocation and fair valuation of identifiable net assets (e.g. content and platform) is yet to be completed.

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